ICON ICO Score
Posted on April 1, 2018
At ICON Partners, we have decided to start reviewing recent ICOs to better inform the community and to create a guideline of how we think a good ICO is structured. Part of the evaluation will involve the ICON ICO Score. This score is a representation of all the different aspects that we find important to look at in an upcoming ICO.
When evaluating a team, the criteria we look at are not much different than they would be for a traditional startup since we need to take into account their education, experience and synergy:
– how much experience the core members have in the field
– how much experience they have in blockchain development
– if the core members area of expertise are complementary
– if they have already created a successful company/ICO
– if the advisors offer relevant experience and if they could enter a partnership with the team
– if any big funds have invested in the project.
Of the 600+ tokens listed on Coinmarketcap, very little offer a valuable token model with a lasting competitive advantage. Putting the token at the center of the project’s company is essential to its future success:
– how decentralized the governance is
– how good the token is as a mean of payment (transaction speed and cost)
– what is the token used for and what the velocity of the token is
Distribution and allocation terms for an ICO are critical in the evaluation of a project and can easily point to the greediness of a team or the misalignment of their interest versus the future token holders:
– we want to make sure that the founders only keep an adequate portion of the tokens and that these tokens are vested over time
– we also look at how they distributed their tokens to the community, whether it is by an airdrop, a bounty campaign or community rewards
– we look at how much they intend to raise and what that money will be used for
State of the Project
Thankfully, market standards have evolved and it is now mostly required to present a demo or working version of your product before conducting an ICO. Though, the state of the project greatly varies from project to project and thus we look at different criteria to assess them:
– how close they are to launching the mainnet
– we also look at their roadmap
– how well and how often they communicate with their community
– if they already have a live product, we look at their userbase
Finally, similarly to the team, the importance of the market isn’t much different from the traditional startup world:
– what is the size of the market they are going after
– what is the the growth rate of that industry
– how much competition already exists in said market
– how much regulation impact the operations in that market
– we then analyze how needed decentralization is in this market
Each category will provide an average on a scale of 10 with equal weight in the final ICON ICO Score that aggregates the average of each category.
With this score, we simply hope to present our personal evaluation of the projects and not investment advice. Some projects with low scores might reach their hard cap and complete successful ICOs and go on to reap great rewards for their investors but our team would not feel comfortable contributing to those projects.
We hope our ICO reviews become part of your Due Dilligence process and wish you the best of luck while navigating the ICO landscape!
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