How to Review an ICO
When it comes to ICO investing there are many factors to consider. Each factor plays a role in the potential success of a new ICO project. On the flipside, failure to conduct due diligence and catch any red flags before allocating capital to a new project can lead to loss of investment.
Many investors believe the team matters more than the actual product. That’s because a good founding team will find a way to take their idea from vision to reality all while overcoming any roadblocks along the way.
No matter the ICO, technology must be a strong backbone of the project. A thorough review of the ICOs whitepaper along with other documentation should display technological advancement in the industry which the ICO is attempting to disrupt. Additionally, a roadmap to scale the project will display how the ICO will be able to achieve mass adoption without running into unforeseen errors.
Token economics are the way in which tokens are distributed to different aspects of the project. Tokens should be allocated in a fair and open manner. While the founding team is important, they shouldn’t be receiving the majority of tokens from the ICO. The same is true for marketing. Too much money invested in marketing can be a sign of a lack of technology, or worse, a fraudulent project.
In summation, the most important aspects to consider when reviewing an ICO are:
- ICO Whitepaper
- token economics
- legal framework
The legal framework of a token is just as important as any other aspect of a project. As a growing trend, the market is shifting toward tokenized securities in an attempt to obtain additional protection for investors. Previously, the entire ICO market was filled with utility tokens for blockchain-based platforms that were are launched by foundations to be used for the sole purpose of purchasing services or using the blockchain network. The new trend is instead to launch tokens via legal entities based on strong business fundamentals and with legal obligations. As a result, this has weeded out many scams which are afraid of legal consequences as well as projects with solid technology, but no need for an ICO or new cryptocurrency token within their business model. In this story, legal frameworks have significant implications on ICO success.
The Benefits of Bear Market Investing
2017 brought with it an onslaught of ICOs for investment. This, coupled with skyrocketing cryptocurrency prices made it easy for any project to raise millions of dollars with nothing more than an idea and a whitepaper. As the market has settled into a bear market, it has become harder for ICOs to raise funds. However, this might be something which actually benefits investors who are looking to review ICOs in search of the best projects to invest.
Weeding Out Poor Investments
In this way, it is possible to exploit falling cryptocurrency prices to take advantage of a market in which it has become more difficult to raise capital. Gone are the days of $100 million ICOs at the drop of a hat, as industry investors have made it harder for blockchain startups to raise funds. This is because many investors lost significant amounts of money in the craze of 2017, where rampant fraud became a huge problem for the industry.
As crypto-analyst Chris Burniske put it:
A prolonged bear market is the best thing crypto could’ve asked for to expose projects that never planned to deliver in the first place.
Over the past year even as prices have fallen, the industry has made extremely important breakthroughs in technology. Second-layer solutions such as the Lightning Network are making the Bitcoin blockchain more usable, while alternative consensus mechanisms for Ethereum are shedding light on its scaling problem. Decentralized applications (dApps) haven’t taken off yet as many would have hoped, but still show potential into what is to come in the industry.
This is all to say, a bear market might actually provide the best time to invest in ICOs, as pricing for new cryptocurrencies are kept in check with the current market conditions. Founders who are fearful of not reaching their target fundraising goals may scale back their token sale, or sell tokens at a discounted rate instead. Still, in a bear market it is best to review an ICO from top to bottom, including the founding team, technology, value proposition, and proposed token distribution.
Upcoming and Current Top ICOs
Although less projects are opting to conduct an ICO during this bear market, there are still many projects worth examining. The following projects could warrant further investigation, or even investment if they meet the aforementioned investing criteria. Always ensure to review an ICO in full before making any investment decision.
TheFund.io utilizes artificial intelligence to determine which projects are best to invest based on a variety of inputs. The company’s AI is able to verify ICO team members, check for uniqueness in a white paper, analyze competitors, and more. Investors are provided passive income via decentralized dividend distributions, as well as security through legal project verification.
TheFund is built not only for private investors, but for funds and investor pools as well. The Russian-based team already has partnerships with big names such as KPMG, Oracle, Deloitte, and more. In terms of due diligence, the company not only has a white paper available, but separate technical and economic papers as well. This makes TheFund one of the most transparent, well-planned ICOs in recent memory. However, 20% of tokens will be going to the team at TheFund, which is higher than other ICO projects.
OPP Open WiFi
Wireless internet connection is a luxury which not everyone in the world has access to, and public WiFi networks are often spotty and have poor connectivity. For this reason, OPP Open WiFi is looking to create the largest WiFi community in the world.
With a market of over 2.5 billion smartphone users, OPP Open has a large market size which it can attack. It’s goal is to utilize 25 million WiFi Hotspot Hosts in the next 4 years to service the network in exchange for OPP tokens. Thus far, there are 90,000 Hotspot Hosts signed up for the program, and the team expects to have 250,000 Hosts onboard by Q1 2019. OPP has options for residential, business, and mobile hotspot hosts.
The OPP team has been together for more than a decade, even before it was a blockchain-based project. It has previously won contracts building WiFi systems for Samsung, The British Army, and more. The company is hoping to utilize its ICO to raise $40 million to grow its operations. OPP does have a significant amount of tokens allocated toward marketing (50%), although for a project which is attempting to circumvent the wireless internet industry this may be justified.
Loligo is creating a secure ICO fundraising platform to connect investors and entrepreneurs. Loligo smart contracts allow for fund distribution based on predetermined milestones and voting. This creates efficient ICOs which are under the control of not just the founding team, but fundraising participants as well.
By creating its own public blockchain, Loligo can ensure security in its smart contracts, unlike Ethereum whose smart contracts have been hacked many times. A contract on Loligo is then relayed to the Ethereum blockchain where transactions can be performed between the chains.
The Loligo team is built of entrepreneurs and cryptocurrency enthusiasts, although the team does not have a significant amount of experience overall. The Loligo team is allocating 50% of its resources to research and development with the founders only receiving 9%. This should be a welcome sign to investors who can be assured the team will work toward its stated goal.
Security among exchanges is such a huge problem for the cryptocurrency industry. This is why DINNGO implements cold storage wallet service with two-factor verification for cryptocurrency trading. DINNGO has found a solution for cross-chain trading (also known as “atomic swaps”) which could be a game-changer in the industry.
DINNGO calls itself a hybrid exchange (HEX) on which users can exchange cryptocurrency directly from their exclusive cold wallet service. This provides a significant improvement to decentralized exchanges which are time-intensive and often require technical knowledge to operate.
The DGO token is a utility token used to power the exchange and entire ecosystem. DGO token holders will receive 50% off transaction fees. The company is not allocating significant capital to operations, and plans to have 45% of its token allocation set aside for payroll.
It is expected that millions, if not billions of dollars in Institutional money is likely to flood the cryptocurrency industry in the coming years. Omega One plans on being the institutional-grade liquidity and custody provider for institutional investors.
Omega tokens are designed as utility tokens who obtain value from the services provided by the Omega One platform. Users of the platform can execute large orders via a private liquidity pool as well as utilize proprietary trading algorithms developed by some of the best engineers in the industry.
The company has a very strong founding team with experience across the financial world, from Goldman Sachs to the NYSE. Advisers to the project include Ethereum and Consensys founder Joe Lubin and former CFTC Commissioner Bart Chilton among others. The Omega One team is in the midst of creating an new whitepaper which should shed light on updates to the protocol such as token allocation and other missing pieces of its previous whitepaper.
Green energy continues to be a huge business as global warming and climate change take center stage. WPP Energy is a Swiss-based company which has been leaders in renewable energy for almost 10 years. Unlike most ICO projects, WPP is already an established company. It has made inroads in its industry and has infrastructure in place to continue building its business. The WPP ICO is being used as a mechanism for the company to raise funds and grow its existing business through the use of a cryptocurrency.
WPP token holders can buy and sell green energy on its marketplace, or, purchase WPP equipment to turn existing polluting power plants to green energy plants. Other products include green home products and innovative solutions in waste management.
The token economics of WPP should be viewed differently than other projects, since it has an already established business. Thus, 20% of tokens to the management team, which has decades of experience in the industry, seems to make sense.
Labeled as “Blockchain 3.0”, HetaChain is a blockchain built to be a fully scalable, flexible blockchain solution. It’s high-throughput chain runs on a duel delegated proof-of-stake (DPoS) and byzantine fault tolerance (BFT) consensus model.
The company’s promotional video is as generic as they come, and doesn’t mention any of the project’s proposed solutions. However, the HetaChain whitepaper provides an in-depth look at a new blockchain solution and how it differs from its predecessors. The HETA coin is used to pay a usage fee on the HetaChain network which prevents users from flooding the network with fake transactions. Alternatively, users can gain HETA by taking part in the consensus or validation process.
The HetaChain team, which is comprised mostly in Dubai, is set to receive 15% of the tokens in its ICO, a large, but not unreasonable number. The project still has a ways to go, as the HetaChain mainnet is expected to launch in Q3 2019.
Sylo is putting the power back in the hands of the consumer. The Sylo app provides secure connection, confidential communication, and decentralized information storage secured on a blockchain network. It even allows consumers and businesses to communicate in a secure, safe manner.
Users of the app can make payments quickly and easily with cryptocurrency directly in the Sylo interface. Sylo is set to collect referral fees from connected applications which pay to interact with Sylo users.
About 32% of the SYLO token will be distributed in a token generating event in order to develop and grow the Sylo community and ecosystem. The project is led by a team of entrepreneurs who have experience in the tech industry and growing companies which have sold in the public markets.
Built on top of the Ethereum blockchain, Rebglo has plans to develop energy saving technology solutions. The company’s first such solution, HETTARER, is a sticker which minimizes power consumption and reduces charging time on mobile devices. The sticker is made from conductive paper which collects charged particles from electric currents, and in doing so, increases battery performance by 20-40%. HETTARER has also been effectively tested on cryptocurrency mining hardware to increase mining efficiency.
The company has plans to develop more energy saving technology in addition to its first product. Additionally, the company generates revenue via its own cryptocurrency mining and mining equipment upgrades.
The Rebglo token sale is relying heavily on market liquidity, allocating 35% to its liquidity pool. Additionally, it isn’t putting much capital into marketing, with only a 10% allocation to market expansion. Overall, Rebglo’s allocation of funds seems to be conservative and well thought out.
A partnership between large real estate companies, Munte Immobilien and Max Property Group, have developed Dominium to be the world’s first blockchain-based, global property platform. This partnership brings with it a team with significant real estate industry experience.
The Dominium platform is being utilized to improve the business of firms who already have millions of euros under management, yet the platform has plans to grow in the future for the entire industry. Dominium is designed to include property financing, listing, and management all in one, multilingual platform. Dominium is built on the Ardor blockchain, a recent innovation stemming from the Nxt blockchain.
The DOM token is used to complete transactions on the platform ranging from listing a property to registering a rental or purchase agreement. The economics of the DOM token will ensure value appreciation, as the company will buy-back and burn much of the tokens which are collected via fees.
ICOs Still On The Rise
Even during a bear market for cryptocurrency prices, ICOs are continuing to flood in from around the world. This could be a great time to purchase top ICOs at discounted rates, as many ICO projects are having trouble raising the capital they had hoped.
There exists great buying opportunities in many new projects. It still takes significant research to review an ICO and determine if it is worth an investment. Many of these projects could provide long term viability in the market and achieve mass adoption with enough financial support.