Among those familiar with the crypto universe, the term “ICO” is part of a well-known terminology. For all newbies, this is a new fundraising technique based on the issuance of cryptographic tokens. To put it simply, investing in an ICO is like buying cryptocurrency before it even hits the market while still funding the development of the project. If you wish to invest, a good starting point would be checking the ICO calendar containing all relevant details about the team involved and many more.
The goal of investing in ICO
From a purely speculative standpoint, the goal of investing in an ICO is usually to buy tokens at low cost and then resell them after a few months or even years when their value has increased. Therefore, the investment ise, only profitable if the demand for the token is strong and its price is higher than the buying price during the fundraising.
Some ICOs are more successful than others without necessarily representing the best projects. Keep in mind the example of Tezos ’ICO, which raised a record $ 232 million in just a few days but has since been at the heart of a legal battle that has completely crippled the operation. Sometimes some ICOs are clearly criminal. Due to lack of regulation, this could be a risky investment.
In short, before giving you these few points to study to choose the right ICO, keep this essential advice in mind:
The keys to evaluating an ICO
The team behind the ICO
It is essential to know who is behind the ICO before investing in it. The team usually consists of an advisory committee and a few development people. If you have time, feel free to check out the ICO team member by member, taking each name to search on Google. Study their Linkedln profile to see if one or more of them have already participated in another project. And if the project in question was successful thanks to their involvement.
Note that crypto codes are more and more of the “open-source” type nowadays. Having the code for a given project open allows developers in the community to freely suggest improvements.
Here, having some programming knowledge will be an asset because you can easily judge the quality of the code associated with the project, which, we remind you, must be shared on Github. But even if you are not an expert, there are a few things that you can check that can prove the quality of the code.
A good code, for example, is usually full of comments to ensure a good understanding. A code must be easily readable, each function generally does not have to exceed more than 50 lines of code to ensure good ventilation. Finally, the developer community must be active. How many people have been working there, for how long? Is it a hard fork? If so, what has changed from the original code?
As long as cryptocurrencies continue to gain popularity, the world of ICOs will attract more and more investors. ICOs are therefore likely to multiply in the years to come, and your choices will only be more complicated. Either way, the most crucial thing is to study the project well before embarking on it. And especially beware of fake ICOs circulating on the web