Topic: LIST: How to evaluate ICO opportunities - page 2. (Read 1098 times)

Dang, thanks for the support! I see this as a topic that I'll be updating indefinitely... things will constantly change. It'll be interesting to see how our opinions shift over time and as more ICO regulation comes into play.

 

Thanks,

Crypto-Kristen

This is probably the most informative thread on the whole issue of ICOs, thank you very much for having taken the time to render such a good service to the community. This actually should be a pinned thread which people could be able to access any time.

Just added to The List with some help from the author of a different, but similar topic ==>

Came across this post and had to share:

Another version is live now.

Now adding some qualifiers, such as "YES is preferred" to help with the fundamental analysis. I really need help on these. Please share your opinions.

Thanks,

Crypto-Kristen
 


FUNDAMENTALS

• Is the token a utility token (usage token or work token) a security token, or a combination?
• For utility tokens: is the token an integral component of the application ecosystem? YES is preferred
• For security tokens: is there some underlying technology that represents a competitive advantage? YES is preferred
• Is the token the project's principal payment unit, essentially functioning as an internal currency?
• Does the token provide return to token holders? YES is preferred
• Is the token new and no other token offers the same service? YES is preferred
• Does the token have a clear purpose? YES is preferred

PROOF POINTS

• How broad or narrowly defined are the use cases for this blockchain?
• Does the token align incentives to simultaneously accelerate growth and token value?
• Who will support the token?
• Is the token structured with centralized control or a decentralized governance?
• Can the resources contributed by users be verified by anyone?
• Does the token reward users for contributing resources towards the creation of a shared service that will benefit all users?
• Does the token grant a governance action, like voting on a consensus related or other decision-making factor?
• For usage tokens: is the digital service useful and does the network underlying the digital service aggregate resources (hashing power, file storage, etc.) that will differentiate the service in the long-term?
• For work tokens: is there a strong network emerging that wants to contribute and is the UX well thought through? And is the service offered useful to people?
• For security tokens: is there some technology underlying the security that gives the token a long-term competitive advantage?

I sort of messed up the order of questions earlier. Here is the new grouping:

1. Token Purpose: what need does the token address?

FUNDAMENTALS

• Is the token a utility token (usage token or work token) a security token, or a combination?
• For usage tokens: is the digital service being offered useful and does the network underlying the digital service aggregate resources (hashing power, file storage, etc.) that will differentiate the service in the long-term?
• For work tokens: is there a strong network emerging that wants to contribute and is the UX well thought through? And is the service offered useful to people?
• For security tokens: is there some technology underlying the security that gives the token a long-term competitive advantage?
• Does the token grant a governance action, like voting on a consensus related or other decision-making factor?
• Is the token the project's principal payment unit, essentially functioning as an internal currency?
• Does the token provide return to token holders?
• Does the token reward users for contributing resources towards the creation of a shared service that will benefit all users?
• Can the resources contributed by users be verified by anyone?

PROOF POINTS

• Is the token new and no other token offers the same service?
• Does the token have a clear purpose?
• How broad or narrowly defined are the use cases for this blockchain?
• Does the token align incentives to simultaneously accelerate growth and token value?
• Who will support the token?
• Is the token structured with centralized control or a decentralized governance?

 
Crypto-Kristen

Thanks for this detail! Yes, make sense to me. Scary AF. LOL

Help! Let's provide some direction on the Yes/No/Not Applicable questions. For example, if the answer is YES, then what is the conclusion?


1. Token Purpose: what need does the token address?

FUNDAMENTALS

• Is the token tied to a product usage, i.e. does it give the user exclusive access to it, or provide interaction rights to the product? If YES, then ___
• Does the token grant a governance action, like voting on a consensus related or other decision-making factor? If YES, then ___
• Is the token the project's principal payment unit, essentially functioning as an internal currency? If YES, then ___
• Does the token provide return to token holders? If YES, then ___
• Does the token reward users for contributing resources towards the creation of a shared service that will benefit all users? If YES, then ___
• Can the resources contributed by users be verified by anyone? If YES, then ___

Thanks in advance,

Crypto-Kristen . 

Revision in progress... here is the first section so far. PLEASE SHARE your input on this section now if possible. I can integrate your thoughts in real-time. LOL  I am also reviewing this thread to make sure I've captured all the existing comments on this section.

Thanks,

Crypto-Kristen 

1. Token Purpose: what need does the token address?

FUNDAMENTALS

• Is the token tied to a product usage, i.e. does it give the user exclusive access to it, or provide interaction rights to the product?
• Does the token grant a governance action, like voting on a consensus related or other decision-making factor?
• Is the token the project's principal payment unit, essentially functioning as an internal currency?
• Does the token provide return to token holders?
• Does the token reward users for contributing resources towards the creation of a shared service that will benefit all users?
• Can the resources contributed by users be verified by anyone?

PROOF POINTS

• Is the token new and no other token offers the same service?
• Does the token have a clear purpose?
• How broad or narrowly defined are the use cases for this blockchain?
• Does the token align incentives to simultaneously accelerate growth and token value?
• Who will support the token?
• Is the token structured with centralized control or a decentralized governance?
• Is the token a utility token (usage token or work token) a security token, or a combination?
• For usage tokens: is the digital service being offered useful and does the network underlying the digital service aggregate resources (hashing power, file storage, etc.) that will differentiate the service in the long-term?
• For work tokens: is there a strong network emerging that wants to contribute and is the UX well thought through? And is the service offered useful to people?
• For security tokens: is there some technology underlying the security that gives the token a long-term competitive advantage?

So, here's how I'm going about it... open to suggestions as always!

I'll separate each section into two sub-sections, one for fundamental questions (y/n/na answer), the other for proof points (deeper, sometimes philosophical, questions lol).

Edits in process now.

 

Crypto-Kristen

Sorry for the looooong delay in getting back to everyone! I'm working on the list now. Missed y'all! Let's do this.

 
Crypto-Kristen

Oh, and here's a Github ico checker to use. Here's the link: https://github.com/ico-check/ico-check/issues

They are a due diligence checker. And they're pretty good at it too. They don't have a huge list of icos at the minute but the one's they do have are analysed thoroughly. Be aware though, there's no central github authority so a new ico topic can be started and analysed by anyone (if you register with a new username you could even do it) so make sure to double-check the information you see but it's a pretty swell resource I think.

Mind and click the 'open' and 'closed' tabs at the top for past and current/upcoming icos.

I do this too, although I don't think you're going to get much contact on LinkedIn as it's more a networking platform than somewhere one can chat and have conversations

Best way is to join the telegram/discord chat if available and ask questions there - I really prefer Discord as telegram is far too difficult to keep track of everything and I find Discord chat just much more manageable (just my personal opinion) but not everyone has a Discord chat. Obviously find out whom the devs are for a project and direct your questions to them/forum moderators rather than randomers who are shilling or whom are being paid bounties. You can also post questions for the devs on the bitcointalk ANN threads as well as privately message devs about issues that are of specific interest.

I'm not personally aware of many outright methods to avoid scams besides what we've already mentioned. Not all are going to mine from your CPU but it's the #1 most obvious indicator that it's a scam if they do. Perhaps this is not what you meant but just in case it was, your CPU usage in this instance is not being hijacked, it's resources are being siphoned off.

What's the difference you ask? (here's how using real-world examples can make things clearer in computer science.

Well, if someone hijacks your car, you are no longer in control of said car. They've stolen it, it's gone, and you (presumably) cannot get it back.
This is not what is happening with your CPU when someone mines from it.
Your CPU is not hijacked, they are merely siphoning off it's extra resources.
Hijack = no control over circumstance; siphon = full control over circumstance but you may or may not be aware that it's occurring - obviously once you realise that it is you take steps to rectify it.

So when you go to that site (I hope you did the test so you know what to look out for) they siphon resources off of your CPU, they do not hijack it because you remain in full control - once you leave the site, the siphoning stops; if you left the site and the 'siphoning' didn't stop, then this would be hijacking your CPU (as you are no longer n control of it).
But rather than hijacking, in computer science we have our own word for this: hacking.

Make sense?

Ahaaa, newbieness is not a problem, acting irresponsibly is (hence why I love your list!). I'm a relative newbie myself to the crypto world - a few months - but I have a v. strong computer science background so I get that not everything might be clear to new members immediately. What helps me sometimes when I'm confused about something in crypto is that I try and use a real world analogy to help me understand it at a basic level first (like I will do in my next post).

But yes, you've got that right. We'll do this from a theoretical standpoint just so we're clear:

Imagine all tokens for sale = 100% of all tokens that can possibly be generated and say the bounty is set at 10% of all tokens.
Now, if only 40% of all those tokens are sold, and 10% remain for bounty, then bounty tokens = 1/5 of all tokens,
So if all bounty tokens are dumped (which are presumably held by non-investors), that drives down the price dramatically.

But

If the same scenario occurred but 100% of all tokens were sold, then bounty tokens = 1/10 of all tokens,
So if all bounty tokens are dumped that drives down the price less dramatically as the extent of the bounty dump is 50% less when 100% of tokens are sold; alternatively put, the impact on token price when the bounty dump occurs when only 50% of all tokens are sold is a 2x (200%) increase in magnitude - as 1x increase = 1 (1x1=1) when contrasted with the same situation if 100% of all tokens were sold.

Hope that makes sense. It's not a practical ex. as most icos sell out - the legit ones anyway - and I'd personally avoid any ico with bounty > 10%.

If crypto's taught us anything, it's that nothing is 'too far' I personally don't think a sub-list of deal breakers is viable however for two reasons. 1) Deal-breakers all depend on the individual's investment goals - short, medium, or long term - and will vary according to such goals. 2) We(you)'re providing a list that people can utilise to evaluate icos. IT advises people of what to look for with regards to evaluating an icos potential but the list is not providing a set of right or wrong answers from which one can deduce - 'oh , okay then, I have w, x and y ticked, and a cross for z so I guess that means i'm good to go to invest in icos'. The list provides a valuable resource upon which the individual evaluates how they rate certain criteria for an ico offering, it doesn't spoon-feed them and give them the answer as to whether or not to invest

Imho, I'd have two lists. A 'Yes/no/not available list' to introduce people to the concepts behind evaluating an ico, and then a more advanced list similar to what is already there once people are a little more comfortable with evaluating the criteria from a so-called 'noob' perspective. I personally feel that most of what is already present in the list is too complex to be condensed into simple 'Yes/no' questions.

I'll get round to responding to your other replies tomorrow as I don't have enough time at the minute. Just got one extra criteria you could add to the current list before I forget. Do private pre-sale investors receive a bonus % of tokens? Most do, and anything > 10% concerns me for private sale bonus as the potential for whales to dump their bonus tokens post-ico is very real. This is really just an arbitrary number however, I could invest in a public ico with a private bonus of say 30% (Eth founder Vitalik recommends >20% is worrying). I draw the line at 40% ico bonus, anything hitting that threshold  a gets a pass from me. No private sale bonus gets me excited as it means everyone's on a level playing field.

Nothing is possible if you do not look through the ICO’s whitepaper. Spend MUCH time to learn it, try to understand if the project can interest really many people. Here there is also a video about how to find the good ICO and evaluate it: https://www.youtube.com/watch?v=PLoDoZI6wcQ

Hi all,

I'm making some big changes to the list per @DarkSi's suggestion:

Also I think it would be better to use "Yes, No, Not Available format". For example, the question "Does the project benefit from being on the blockchain? Should it be on the blockchain?" can be modified in a more specific and simple way "Blockchain is necessary to run the project or not?".

This will take some time and I'll definitely need help along the way to properly rephrase.

@DarkSi shared other insights to help us tighten up the purpose of each question. I'll begin integrating these thoughts after putting some time into the "Yes, No, Not Available" format for existing questions.

We are making progress folks!

Best,

Crypto-Kristen

"Is the token distribution coming directly from a smart contract?" Is it possible to do another way?
Is there a cap on funds raised per person? — just don't understand the question