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How to evaluate an ICO


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Currently there is a lot of hype going on around blockchain ICOs. This Slide deck will help you ask the right questions.

Published in: Economy & Finance
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How to evaluate an ICO

  1. 1. How to evaluate an ICO? BlockchainHub ■ Dr. Shermin Voshmgir ■ April 05, 2017 1
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  4. 4. Hype? 4
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  6. 6. Stupid Money? 6
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  8. 8. Just a flashy landing page? 8
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  11. 11. New Kids on the Blockchain 11
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  13. 13. Type of Token? Depending on how you answer this question, a very different set of questions will be relevant. Blockchain Token: Private or Public Blockchain? Scalability? Consensus mechanism? Privacy? Governance? What problems does it solve that previous blockchains before have not solved? Purpose of the token? Rights attached? Simple dApp Token: Purpose of the token? Sustainable revenue models of different stakeholders? Rights attached? DAO Token: Does it manage a lot of funds? Splitting mechanism? Governance of Edge Cases? Security? Rights attached? 13
  14. 14. Purpose of Token? Token with an inherent value or just a share? What will the token be used for? ETH for gas, BTC for payments… Is it an incentive mechanism for the stakeholders? Does it contribute to a sustainable economy in the blockchain or within the dApp/DAO? If it is pre-mined, how is the token distribution? How will be the token distributed after the ICO? How much goes to the founders. 14
  15. 15. Stage of Project? ● Landing Page only ● White paper ● Proof of Concept 15
  16. 16. If landing page only… Forget it! 16
  17. 17. If Whitepaper... ● Is it well structured? ● Does it explain the technology in depth? ● Do they have a roadmap? ● Does it survive swarm review & expert opinion? ● Is it written for marketing reasons? ● Does it need a blockchain, or is there an off-chain solution to solving the same problem? 17
  18. 18. If POC... ● Does the project have an alpha version before the fund raising? ● Were there a lot of commits on github? ● Testnet available? ● If it doesn’t have an alpha version, a well written ● Whitepaper and a good team could compensate for the lack of progress. 18
  19. 19. Security & Auditing ● Any external audits of the code? ● Has it been running on testnet for sometime with no major issues? 19
  20. 20. Legal & Compliance ● Does national or international regulation apply? ● If yes, how could that affect the business model in the short & long run? 20
  21. 21. Founders & Team ● Track record Previous projects ● Technical know how ● Formal education 21
  22. 22. Founders & Team ● Track record Previous projects ● Technical know how ● Formal education 22
  23. 23. Community ● Do they run a blog/reddit/slack? ● How interactive are those social media activities? ● Are they reporting progress? ● Size of a community depending on stage of project 23
  24. 24. Market Potential ● Value proposition: What problem does it solve? ● How much demand is there for the project, short & long term? ● Competitors? Partners? ● Does the project get discussed in the relevant communities even before launch? This could be an indicator for big interest. 24
  25. 25. Funding Structure ● Why does the project need funding at the moment of the ICO? ● How were they funded up to that point? ● Do they have a cap on the crowd sale? ● Is the amount of tokens issued limited to the initial crowdsale? ● Are they putting too much money into marketing? 25
  26. 26. Follow us blockchainhub @blockchainhub Shermin Voshmgir @sherminvo @sherminvoshmgir 26