Thought I'd post some tips for avoiding bad ICOs. Hope it helps but just remember that you're your own person, these tips are just my personal guidelines, not suppose to be your bible.
○If the ICO says its an "investment," steer clear. Smells likely of being a security and most likely won't pass regulatory checks on bigger exchanges like Poloniex or Bittrex thus not being listed. Also just a sleazy way to seem attractive to the average person trying to make their money work for them.
○If the ICO is based around building a PoW/Mining based coin like http://tensorbit.com or https://electroneum.com/ were promising, don't put your money into it. If the coin can be mined, why are you buying it when the supply is going to be heavily inflated thus lowering the price. Coins worth mining don't need ICOs, that's obvious just by looking at coinmarketcap.
P.S. Ethereum wasn't built around being a mining coin, that is not what I mean by being based on mining.
○http://tensorbit.com's ICO was a complete scam, how do we know this? The "CEO," was completely unaware it existed when messaged on linkedin, which means someone stole his identity and used it to make $7m in ICO funds. Always message the team to at least verify they're real and research who they are.
○ICOs listing partnerships with exchanges like Bitfinex, Bittrex, Poloniex, etc are likely scams. https://bonpay.com/ listed Poloniex and Bitfinex but they have NDAs in place for coins to not announced they're being listed. Regarding Bittrex, I am not sure but they don't usually pre-announce listings very often. You can also just tweet the exchanges to check or any partnerships listed for that matter to verify if its real or not.
○If there is a "FEATURED IN," section on the website or ANN and its mostly cryptocurrency news sites like cointelegraph, that's a sign to be cautious as anyone can just buy ads on these sites. They can say they're mentioned in it because they bought the ad, also indicated they're just using a lazy marketing tactic to fill the site up.
○The coin's sole use is to be used as a monetary payment for the coin's platform? It's shit and nobody wants to exchange USD to BTC/ETH to "Token," to use their product. But it offers dividends? Makes no difference, if anything worse because it can't be listed on bigger exchanges like trex or polo now.
P.S. Platform fees and Platform payments are different, ETH is for platform fees while MTH is for platform payments.
○If the platform the ICO is raising funds for something that regular money can do much easier, talking about e-commerce ICOs, its a terrible way to spend your money. Nobody wants to use your token to purchase stuff, if they did, they confused you with Bitcoin, Dash, or Litecoin.
P.S. Monetha was a terrible "investment," by the way and I hope you learned why its stupid.
○Uncapped ICOs with ridiculous bonuses for "early adopters," are purely gambles unless you see serious long term potential for them. If everyone wants the token, they'll buy during the ICO, they're not gonna buy on exchanges. Its why ICOs who raise obscene amounts of money tend to dump to shit when being listed on exchanges.
○Capped ICOs with the hardcap being at $20m+ and offering bonuses are also risky depending on what they're trying to accomplish. The same reasoning posted in the tip right above can possibly be applied.
Personal rankings of Maximum Funding Amounts
5m -1k - Godly
5-10m - Great
10-20m - Okay
20-30m - Risky
30m+ - Probably not worth it
Uncapped - You better pray its worth it
Uncapped + Bonuses - Your money can be spent better somewhere else
The higher the funding given to the ICO, the lower growth potential it has. Easier to move a $1m marketcap than $100m marketcap. One of the best examples for a low cap is Lisk who only raised $6m at the time (14k btc) and now pushing onto a $1b marketcap. A great example for an ICO which raised too much money was Status, its a messenger app, it doesn't $100m to create and the chance of it being super profitable is very low.
○You cannot only base your judgement on funds raised alone but it helps a lot to determine your r/r for contributing. An example of an ICO with a low capped ICO but was horrible in overall design is http://backto.earth who had several twitter traders backing it and one leading it but its such a useless token in almost every way. The token's only use is for payment to participate in their ARG. If cash/credit cards are easier to use over using their token, its a terrible ICO to want to be apart of.
○Roadmaps being mostly about having a mobile wallet or being listed on an exchange instead of working on the platform seem to have a high probability of being not worth your time or your money.
○Public presales aren't "presales," they're just the first round of the ICO. If those "presale," funds are being used to advertise the ICO and not much else, its a scam and not going to be profitable. Advertising ICOs doesn't make YOU money, it makes THEM money. Its not like advertising they're on an exchange where you can sell your tokens at a profit, just means you spent money to make someone else rich. https://paragoncoin.com being the best example of this, its a completely useless token.
○If the ICO is suppose to be the "decentralized," version of an already super popular service like Uber or Ebay, its not going to succeed. http://theflik.io was suppose to be decentralized netflix but it failed horribly. They had "T.I." on the team but still fucked up royally in raising funds. To try and make some money out of it, they did a huge supply burn to pump the price. Why that's a shady thing to do is because those burned tokens that weren't in circulation, the flik team had them but the uneducated bought into anyways while not really understanding how supply and demand works.
○ICOs raising funds to become the next decentralized money is the dumbest thing I have ever seen. We have enough of these coins and only 3 are being used as money (BTC, LTC, and DASH).
○Bitcointalk ANN threads having "The World's First..." in the title is just indication to skip over it. It's not the first and its lazy marketing.
○This may be backwards thinking but ICOs with working products are riskier than promises, in terms of ROI, for ICOs. The altcoin market mostly move because of hype and people blowing news way out of proportion thus causing ridiculous pumps (unless its alt season but still has an effect regardless). You lose out on some hype pumps from development releases/updates.
P.S. This is just my view on this, not a suggestion for everyone.
○Don't follow "smart money," or in crypto's case "Twitter Traders". This is maybe the worst thing you can do in crypto overall including just regular trading. Just because a famous crypto guy is on the team doesn't make it okay to join in on it. http://backto.earth having Spaceman as the "CEO" being the prime example or Vinny Lingham (He's famous, not smart, he's actually a real fucking idiot) being on http://metronome.io. Both god awful projects but they have big names on them.
○If you can't track progress on their github or see if their devs' githubs have ever done anything ever then its a bad sign. Especially ICOs promising "decentralized," products/tech. Decentralization usually implies open source code.
○Facebook, Instagram, Website, and Twitters ads displaying an ICO? Don't touch it. I don't care how good it looks. Plenty of very successful ICOs have happened without the need of buying ads. Its a sign showing they're not confident in seeing getting funding on merit alone.
○90% of ICOs nowadays are complete garbage and don't need $10m+ to make their products that will never be used by anyone. Take a minute and think why they would need all that money to make pretty simple products. Most coins out today aren't even used for what they should used for, let alone ICOs, they're just traded.
○If its an original concept or implementation that uses blockchains/tokens/coins in a manner which is actually useful to their platform besides payments, that's a great sign to buy into but make sure its original and not just new to you.
I'll post more as time goes on. Need to jog my memory a bit as I've been out of the ICO game for a while. Probably get into better detail as I work on my writing skills for Steem. Hope this helps
Thanks for sharing. That is a great list. I appreciate you putting this together, you look at some of the factors very differently than I have; which is great to get another perspective on them.
Happy to provide some info.
I should've proofread better but hopefully I was clear enough :)
What's your thoughts on spectre.ai, moirai and the diviproject?
A big fat no to all three of them.
Spectre is applying for "regulatory licensing," in 2018 and if that doesn't work out, your money is gone.
Moirai having "expansion into Asian markets," in their roadmap indicate they don't know how blockchains even work. Also being one of the first legally compliant ICOs isn't that big of an achievement.
Diviproject, a new coin doing what they want to do comes out every other day.
if you want a better alternative to Spectre.ai go look up Leverj. Ran by a solid team who can probably accomplish what they want to accomplish.
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STOPHave you any updates to your thinking on this? It's a great article but I'm just wondering have you seen any major changes in the market. For example your market caps seen very low compared with the ICO's coming out and doing well.
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