— These are the “original” ICOs — new projects that wouldn’t have been possible without their use of blockchain and crypto technology. The easiest way to identify this type of ICO is to ask, “is this project completely impossible using a traditional web tech stack?”
— A crypto project’s “Artificial” ICO is often a traditional equity round in disguise, with a white paper in place of a financing deck. It’s only natural for companies — particularly those struggling to find capital through established channels — to seek novel ways to finance their businesses. But these are weeds growing in the crypto garden, and they will eventually be eliminated from the market as buyers become more professionalized and savvier.
— A “Synthetic” ICO is when an established, traditionally funded company that has built a sizeable audience plans to make the leap to the crypto economy. In the “CPG-ization” of the web, an ICO can be a way to escape the shadows of Amazon and Facebook. For companies that are #2 or #3 (or #10) in a space, shaking up the category can be a smart strategy.
— How to identify scammy ICOs? Read their whitepaper. How do you feel after reading it? Do you feel the FOMO (fear of missing out)? Scam ICOs play very strongly on that concept. If you feel consumed by fear after reading the white paper, it is very likely that you have been emotionally manipulated by the wording and structure of the paper. Most likely, the team who wrote the white paper would have been capitalizing on your greed to push you to make the purchase. Legit ICOs tend not to focus on this fear, but on the core unique selling point of technology, solutions, and problems that they are solving.
4. Types of ICO auctionsAn initial coin offering (ICO) is a means of crowdfunding, through the release of a new cryptocurrency or token to fund project development. Just how the ICO intends to collect its funds also contributes to its attractiveness.
There are three main types of auction methods that ICOs employ to raise capital:
1. CAPPED SALES — In this case, ICOs sell a fixed number of coins at a predetermined fixed price. The ICO team sets a maximum amount of tokens available and cuts off token sales once a particular amount have been sold and the desired market cap has been reached. The advantage of this is that it gives a fixed valuation for your network which makes the process very transparent for investors. If investors believe your network is worth more than the valuation implied by the token price, they can feel confident in purchasing your coins. The downside to this model is that if you are launching a particularly hot product, often it becomes a race to buy up as many tokens as possible.
2. UNCAPPED SALES — This means that the ICO team sells its coins at a predetermined price but does not cap the total number of coins it will give out. So the more people that invest, the more total tokens ICO will mint. An uncapped ICO will still limit the percentage of tokens available, however, the real percentage of the given token supply is not known until the token sale has ended. Investors also cannot know the value of each token until the sale has ended and all the capital has been raised.
3. DUTCH AUCTION — Participants get tokens for the same final price, which is set by the auction, irrespective of the time of their bid. A Dutch auction normally entails the auction beginning with a high asking price, which is lowered until participants are willing to accept either the auctioneer’s price, or a predetermined reserve price. The main goals of the auction are to enable everyone to participate while offering certainty about the maximum total value of all tokens at the time of the bid. There is also a reverse Dutch auction system where tokens grow less expensive over time, encouraging investors to hesitate and take more time in purchasing tokens.
ICOs are also incorporating tiered multiple investment rounds and pre-sales in order to generate more desirable outcomes. We can conclude that ICOs are very much still in the process of innovating.5. How to participate in ICOs? Before you decide to participate in an ICO, you should do your research, and never invest more than you are willing to lose!
ICO Participation process consists of four steps:
1. Open an Exchange Account
Assuming that you’re confident after performing your research and want to proceed with participating in the ICO, then you should open a fiat-accepting cryptocurrency exchange account to convert your domestic fiat currency into popular cryptocurrency of Bitcoin (BTC) or Ether (ETH).
2. Open Your Own Wallet to Participate in ICO
It is absolutely essential that you have your own wallet.
Your exchange account DOES NOT COUNT as your own wallet, as you do not control their private keys.
Participating in an ICO requires you to send BTC or ETH from your personal, private wallet. If you send it from an exchange, you WILL NOT get the ICO tokens since the transfer originates from the wallet of the exchange and technically you do not own any wallet in an exchange.
3. Follow the ICO Instructions
ICOs will most often provide a step-by-step guide to participating in their ICOs.
You should join their official communication channels such as Slack or Telegram to receive the latest updates and ask questions directly to the developing team.
4. Exchanges to Trade ICO Coins
If you believe in the tech, then hold the coins for the medium to long-term, or until your price target is hit (e.g. 2x, 3x, 10x of capital).
If you just want to flip it, then sell it once it reaches an exchange that usually lists an ICO.
Alternatively, if you’ve missed out on the ICO, you can buy it at an exchange.
The most popular ICOs sell out in matters of seconds and that is why it is important to be prepared the moment an ICO goes live. You should also take into consideration other factors such as the speed of the transactions you send. Whether participation is successful is dependent on how fast the ICO receives an investment. If the transaction is not accepted in time, it will be returned to the address that sent it.
Dear readers, this analysis is the product of an extensive research that was carried out in June 2018. Since the world of cryptocurrencies is changing extremely fast, this may not be relevant in the future, but for now, we hope you will find it useful 
