Trusted ICO Ratings Build Robust Investment Portfolios
The token economy is gaining traction. Right now, the ICO market is huge because it lets start-ups—as well as the big players—attract venture capital. The market has investible projects and even unverifiable, fraudulent ones. So how does an investor pinpoint the most promising projects? How does an investor stay clear of all the Ponzi ICO schemes? Well, the answer lies in finding a website that gives ICO projects reliable ratings.
The ICO landscape is exploding and dedicated rating platforms, listing apps, and research agencies are also evolving quite fast. As a result, finding a hub that gives quality ICO ratings has become quite challenging. Through ICO rating, investors will get an overview and will be able to know about the best ICOs to invest.
This is why we are detailing all the steps that a reliable platform usually follows to properly rate an ICO.
What does it take to rate an ICO fairly?
It’s all about the team
The credibility of ICO ratings reaches a whole new level if they’re conducted by trade analysts. The crypto-verse is dynamic, and so are the ICO projects, so the team involved in the analyses has to respond to this dynamism. Also, the evaluators need to work with different assessment software applications to accurately analyze ICOs. In addition, the team will have to carry out KYC procedures to analyze ICOs and their respective crews. That’s exactly what a team of ICO reviewers are required to do.
Exceptional rating methods matter
A website that reviews ICOs and rates them should run its due diligence to make sure that investors are getting the best deal. Proper due diligence should always include a series of analyses performed on the ICO. For this reason, we’re listing some of the top analyses that only a trusted website will perform.
As the name suggests, this score tells the investors about how risky it is to invest in a specific ICO. A higher risk-score means that there’s less information about the ICO campaign. Additionally, there may be less information on project documentation, its team, and other product development. In a way, a higher risk-score questions the possibility of an ICO project’s success.
In this phase of due diligence, a project is analyzed against the following parameters:
- White paper
- Smart contract (for ICOs)
A risk-score will give the investors an initial impression about the project; it’ll attempt to find all the possible fraudulent intentions of a project’s founders. This score is easily influenced by the presence, or the absence, of a product. The risk-score is divided into five levels: very high, high, medium, low, and very low. If the risk-score is higher, then the project’s quality and development will be questionable. Additionally, this score will demonstrate a start-up’s chances of hosting a successful ICO sale and the project’s subsequent growth prospects. For reference, you can also prefer ICO planning guide from our website which helps you to implement the perfect and systematic strategy for investing in ICOs.
This score will show the level of interest that the investors have in a project. If the hype-score is higher, then more and more investors are likely to invest in this project.
Here are the parameters against which the hype-score is calculated by the reviewers.
- The total number of users following the project on different social media channels.
- The number of times an ICO project is mentioned in the press.
- Mentions of the project in leading financial publications and mainstream technology
- The total traffic on the ICO project’s main website.
- The ranking of the project’s website on different search engines.
In this phase, the analyzers will have to closely evaluate the project’s social media channels including Medium, Twitter, Telegram, Bitcointalk, and YouTube. The team will also have to analyze the project’s presence in mainstream tech publications generally found online; these publications include TechCrunch, VentureBeat, WSJ, Reuters, and Forbes. Any mention of the project outside the crypto landscape improves the ICO’s exposure and visibility. All of this will eventually help the project to attract potential investors. Furthermore, if the project earns some favorable mentions in the financial and IT media, its risk of fraud will be reduced.
Here, the metrics of the hype-score are divided into five levels: very high, high, medium, low, and very low. If the hype-score is high, then the community will be extremely engaged in the project. If a project receives a great deal of attention from its prospective investors, then that serves as a positive indicator. In short, the interest in an ICO project can successfully fuel the demand for its tokens.
After these two phases comes the project’s basic review; this review is generally done by an expert. (Any website that’s in the business of rating ICOs should source the review from a non-panelist.) An independent expert review may give the investors a generic understanding of the project’s weaknesses and strengths. A basic review for any ICO can be thought of as a purely informational product.
An independent expert who’s reviewing the ICO should analyze the project on the basis of the following parameters.
- Checking the business model’s feasibility and validity.
- Elaborately analyzing the project’s financial plan.
- Assessing the project’s competitive environment.
- Evaluating different market dynamics.
- Analyzing the project team’s past track record.
- Closely examining the project’s internal economy.
With a well-executed and detailed project overview, the investors can simply analyze the development vector and other features of the ICO. Most importantly, a comprehensive ICO review will cover the team’s competence and will eventually let the investors know whether it’s worth investing in a project or not.
It is necessary to be aware about marketing trends of ICOs before investing. ICO marketing guide is very helpful to get clear idea for it, also ICO events organized by their respective companies provides a very good overview of marketing aspects.
According to the experts working on one of the leading ICO rating websites, a crypto project’s review should answer a few essential questions that are typically asked by potential investors. Factoring in key industry drivers, the reviewer should thoroughly analyze the project. In the ICO review, the analyzer should keep in mind all the evolutions that are taking place in the crypto landscape. These industry drivers generally include the rate at which the crypto-verse is expanding and the innovation of different ICO projects.
An analysis for investment rating answers the following questions:
- Is the given information on the project’s current state, its team, its market, and the development of its technological components completely accurate?
- What are the chances that the project, along with its products and/or services, will be implemented as planned and stated in the white paper? In order to answer this question, the reviewer will have to analyze the project’s development, milestones, business model, competitive ecosystem, and team competencies.
The team reviewing an ICO project should have a comprehensive understanding of the blockchain’s ecosystem along with other blockchain-based (similar to BunnyToken, Seal, Streamity, Upline, DenCity) projects. This ecosystem and its products drastically differ from all traditional market segments. A good team’s assessment approach will definitely take into account every key aspect of the traditional practice while identifying all the unique features of the blockchain. By comparing the traditional market with a blockchain’s ecosystem, the team will be in a better position to judge the ICO of a start-up. The ICO countdown has already begun for many tokens.
Right now, all the leading ICO reviewers categorize the projects on the basis of the following pieces of ledger technology.
- Interoperability (Polkadot, ICON, etc.).
- Decentralized application platforms (NEO, Ethereum, EOS, etc.).
- Decentralized exchange protocols (SWAP, 0x, etc.).
- Oracles (Oracles Network, etc.).
- User controlled internet (Status, Blockstack, etc.).
- DApps (value exchange, financial services, business services, etc.).
- Smart contracts (BlockCAT, Etherparty™, Agrello, etc.).
Assessing the project’s different technological components and the probable role of the token across the system
While evaluating a project that’s developing cutting-edge tools such as a platform, a smart contract or a DApp, the reviewer will have to take extra care and put in extra effort. The same applies for the analysis of a start-up that’s offering interoperability; examples of such start-ups include Cosmos.
By analyzing the project in this manner, the ICO rating services reviewer will be able to know how an individual project’s token will scale with time and demand. The review will also include the token’s potential prevalence; this factor will definitely affect the growth of the token’s value in the near future.
Each project will require a different approach to the analysis. Unlike DApps, projects that are based purely on the blockchain (like other ICO token such as StealthGrid, Vinchain, Cashbet, NeumCoin, Thrive, will have a range of technological components. In order to give an ICO a fair rating, the reviewer will have to check whether the project has the potential to deliver and whether it has the potential to be ready for the market. Plus, the reviewer will have to pay attention to the way the project’s different tech components will be implemented.
However, the analysis of a DApp is a different matter. First, the reviewers who’ll be analyzing these decentralized apps will evaluate every single restriction that the platform (the blockchain over which they’re built) can impose on them. Any DApp’s performance will be influenced by its blockchain’s scalability.
So no matter whether it’s a DApp or a complete ecosystem, it makes complete sense to define a project’s ecosystem both qualitatively and quantitatively. The reviewing team will also have to run a complete market analysis for the future of the project’s stakeholders.
Below, we’ll flesh out the different qualitative and quantitative features found in an ICO project involving a complete product or a suite of services. A reviewer will have to analyze these characteristics in order to give an ICO project—generally involving a platform or a DApp—a fair rating. Finding these sets of characteristics in a crypto project is easier said than done; that’s why the investor should complete their research on a website offering dependable ICO rating services and helps in knowing how to invest in ICOs.
Technological operational ecosystem: In this phase, the reviewer will have to evaluate a project’s impact on the blockchain’s infrastructure and even its development. While analyzing the operational components, the reviewer will have to ascertain whether the project is solving the blockchain’s current shortcomings, or not. Also, the reviewer will have to see whether there’s a possibility of integrating the project with other products/services to build a brand-new product/service.
Market position: This phase will involve the reviewer analyzing the project’s existing market segment, its rate of growth, its competitive analysis, etc.
Legal preparation: Here, the reviewer will analyze the project to see whether it’s complying with all the necessary regulatory frameworks established by a government or a legal entity. This analysis will also mean determining whether or not the project’s team follows any KYC or AML procedures.
Project management: While analyzing the project’s management, the reviewer will have to carry out an in-depth analysis of the project’s team. The reviewer, in this phase, will have to decide whether the project’s team is competent enough to execute the ICO.
Project’s technical development: The reviewer will thoroughly examine a prototype of the product if it’s available. If a prototype exists, the team will have to document its technical characteristics, its applications or protocols, and other key components.
Token analysis: This is the most crucial part—the reviewer will have to analyze the token and its functionality from scratch. This analysis should basically focus on the token’s value in the long run. Furthermore, it will need to determine whether the token fulfills all the principles integral to token economics.
A project’s quantitative characteristics, which a reviewer has to analyze, include the following:
- Forecasting the supply and demand for the project’s digital asset that the company will sell during the ICO.
- Analyzing the ways in which the funds will be distributed.
- Understating whether the project’s financing suits well its top objectives.
Apart from the due diligence, a dedicated website will always provide its own independent opinion on the project and its upcoming ICO. The best rating websites will always emphasize the fact that its rating or review will be an analytical product overview and not an investment recommendation.
You can also get relevant and more information by attending ICO events which are organized specially for those who plan to launch their own ICO project or want to invest in a сrypto-currency tokens. Simlarly marketing influencers plays a vital role in promoting ICOs. Marketing influencers are individuals who hold a grip on specifically targeted audiences and have huge followers and fans on their Facebook, Twitter and YouTube channels, as well as other social media accounts.
While rating or reviewing a project, a dedicated reviewer will factor in all the project-specific facts and figures that are provided by the ICO’s team. Based on this information that is freely available, the project’s review will be completed and the ICO rating will be given.
Want to lay your hands on the best ICOs? If so, it makes sense to go through the ICO Stats delivering accurate insights into the evolving crypto world.
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