An interesting article about the ICO and SCAMs

31.08.2018

In 2009, no one could have thought that the cryptocurrency would be widely recognized. Today, it is actively used as an alternative to fiat funds. Due to the reliability of the blockchain technology underlying the digital currency, cryptocurrency is used as an investment in ICO projects. But, where there is a “big penny” there will always be scammers for whom ICO is like sour cream for cats.

Therefore, the head of the ICO department of ADDIVINE Sergey Ostapenko will share 6 principles that will help everyone to distinguish the scam from an honest ICO project.

The main task of the investor is “X” and not to face the scam. From the side of the project, the main task is to prove to potential investors that the project is real and the team will go to anything for the project not to become a scam. Among hundreds of projects it is not easy to find something good. Many projects turn into a frank scam, and as a result, investors’ confidence in the ICO is lost. We have identified several points, which should be paid attention to both by investors and projects.

  1. The team. The project, which plans to raise several million dollars, cannot have a weak team. All team members must have experience in the niche of the project. A big plus will be the opportunity to write to someone from the team in the LinkedIn or Facebook and find out the details of the project.
  2. Too much advertising. If a few months ago the volume of advertising was one of the keys to the successful holding of ICO and the closure of the soft cap, now a large amount of advertising is of concern to investors. Too much praise for the project is a sign of the scam.
  3. Huge discounts and bonuses. Discounts during the presale are good, but there are some projects that go too far with generosity. It seems that they do not see the value of their token at all. If the team does not see the value of its own token, then the investor – even more.
  4. Advisers. A good adviser will bring great benefits to the project. He will help not only with his competence in his field (blockchain, marketing, etc.), but also thanks to his reputation will help to collect investments.
  5. The availability of MVP. This is a huge advantage. A potential investor sees that work is underway on the project and, most likely, the project will continue to work after the ICO.
  6. The presence of Escrow. This is a guarantee that after the completion of the ICO the founders of the project will not hide with your money. It is worth saying that not all successful projects have escrow and it did not stop them collecting the necessary amount and going to the stock exchanges. But when there is escrow – this is a big advantage.

In our opinion, these are the main points that should be taken into account when choosing a project for investment. In addition to them, you can also highlight: site failure, poor technical support, a panic of investors, a presence of code on GitHub. There are dozens of such items. If you have any doubts about the project, then it’s better to go past it and not let the scammers weld on you.

Nevertheless, all these items are not a guarantee of a successful ICO. Be very careful when choosing ICO and do not invest more than you are ready to lose.

© Sergey Ostapenko