There are hundreds of new ICOs being introduced on a weekly basis offering lucrative benefits and massive profits. They offer attractive features, discount offers and rewards to temp traders to invest in their system. After seeing the interest of the people and potential of the market, huge number of scammers has entered with malicious intent. Hundreds of such scams got public where the new ICOs just ran away after pocketing the investment of the people. Traders get confused and double-minded after seeing so many options to choose from. Hence, Investing in Any ICO is not an easy task. So for this reason, we are going to share 6 Crucial Things to Consider Before Investing in Any ICO and some very useful tips to verify the authenticity of any startup before putting your hard-earned money into it.
1. Token Should Comply with ERC-20 Standard
ERC-20 stands for Etherium Request for comments. The reason behind this check is that ERC-20 standard gives your token a value and authenticity. A token complying this technical standard essentially becomes a smart contract on the Etherium blockchain. So always check for this feature before investing into any new coin.
2. Always Look for the Number of Phases Described in the ICO
There must be a set term for the sale of these tokens. The number of tokens should be predefined and mentioned clearly on the ICO. Also look for the phases such as presale, ICO and public sale. There should be mentioned a detail about the hard and soft cap of the token as well.
3. Evaluate their Strategic Vision
ICO must contain a clear road map for the progress of the coin. By seeing down-the-line prospects and plans of the management will give you a clear idea of what they plan to do. Unauthentic tokens never mention a road map or just do so to complicate the comprehension of the traders.
6 Crucial Things to Consider Before Investing in Any ICO
4. See the Business Model Behind the ICOs
Probably this is the most important factor to look for in an ICO. A currency that has a support of a workable business model will surely do well in the long run and sustain in the market. Business model is always the first thing mentioned on the ICO paper. Every technology is transforming to blockchain and they offer a plan of using blockchain to improve a certain function.
When you will see a token backed up with a business plan that uses the blockchain to benefit maximum number of people, you should go for it.
5. Read about the Team
Seeing the profiles of the people who are initiating the ICO is another very crucial aspect. By visiting their social media accounts and seeing their past experience for relevance and repute will keep you secure. There are people forming a team just to manipulate public fund and run away after collecting the investment.
Each member of the team should be clearly mentioned on the ICO and a link to their profile should also be active there.
6. Transparency of your Funds and How those Funds will be Used
The first reason people are turning to blockchain is its transparency. A token asking people to invest in the development should conveniently show how they could track their funds. The ICO must also give a clear plan about how your funds will be used. Reputable systems tell you a segregated percentage wise chart to give you a clear idea about the spending of your funds.
In order to escape any kind of fraud always follow the above mentioned 6 Crucial Things to Consider Before Investing in Any ICO.