May 30
How to rate an ICO
An ICO is an Initial Coin Offering and it has been taking the crypto world by storm. It is similar to an IPO, but exclusive to the cryptoverse.
Many start-ups are usingICOs as a means to raise funds to bring their projects to life. This could be anything from hiring new team members to having a bigger budget for research and development.
When deciding whether to invest in an ICO there are many factors to take into consideration. Throughout this article, I will be delving deeper into those factors.
I will also be publishing an article in the next week, exploring why influencers rate projects differently, what they gain from it and when you can also gain.
How to rate an ICO
These are the main components you should look into when deciding whether or not to part with your hard earned money!
- Team:
“Behind every great man is a great woman..” — a saying we have been accustomed to hearing over the years, and is full of truth!
With any idea or project, the analogy is exactly the same; it is extremely unlikely that you will have a successful project/ICO if the team behind it is not great.
Deciding if a team is great or not, is quite a subjective view, but here are a few pointers to help make it more objective:
Does the team member have any real previous experience that is relevant to the project? I.e. if it is an ICO who’s USP is data analytics on the Blockchain, does the CTO (Chief Technical Officer) or COO (Chief Operating Officer) have experience working for a well-known company as a data analyst, or if they are building their own Blockchain, do they have enough developers?
Does the team have a good balance?
I have seen some teams who have a plethora of experience within the corporate world and have worked for companies like IBM; Mercedes; KPMG; but they are launching their own protocol and only have one developer. The likelihood that they will be able to launch their product is highly unlikely.
The other side of the coin is that you could have a very young team, fresh out of university with lots of ideas but just not industry ready. Do you write off this ICO? Of course not!
The exuberance of youth is raw and untamed, and with the right set of advisors (guidance) they may just be the next Ethereum!
- Idea
Great teams tend to get behind great ideas, so if you have researched the team and they are solid, rest assured, the idea will be solid as well.
In the majority of cases, we look at the idea before we look at the team. Whilst most established ICOs have a marketing team that can sell ice to an eskimo, you have to be able to wade your way through the fancy terminology (BS!) and get and understanding of what the project is actually doing. If it is doing one of the following then you could be onto something:
· Does is solve a genuine problem?
· Does it need the Blockchain?
· Will it actuallydisrupt a centralized authority?
· Is it innovative?
· What is the potential of the idea?
· Are there ICOs like this within the space already?
· If yes to the above, then: how is it different to those ICOs? Does it have improved features? Or is it just a copy & paste idea?
The more the number of yes answers you have, the more likely the project will succeed (in the short term at the very least).
- MVP
The number of ICOs being released weekly is crazy, and there certainly isn’t enough time for you to go through each one (unless you have a very large team working with you). Therefore, another way that can help identify an ICO with good potential is if it has a minimum viable product, an MVP.
To those unfamiliar with the term, an MVP is a product with enough features to satisfy the initial investors, and provide feedback for future development.
With this in mind, it is much more likely that a team with an MVP can reach the milestones on their roadmap quicker and thus launch a fully functioning product sooner. This in turn means the native token to that platform will be in use and the price will go up based on actual demand, not hype or manipulation by whales.
It is not always the case that only projects with MVPs turn out to be profitable. Those with a solid community or established partners can also have the same desired effect {we will revisit this later in the article}.
- Token Metrics
Whilst each of these factors has an equal importance, they are in order for a reason (there is a method to my madness); we started with the most subjective section and worked our way to the most objective section.
Being a mathematician by trade, this is the section that I personally most enjoy researching and seeing if a project is worth investing in purely through the numbers.
As with any project within this space, decentralization must also occur by having many different investors and supporters holding the majority of the tokens.
As time has progressed in this space, token metrics to the standard investor have gotten a little interesting to say the least!
With earlier projects there were only 3 main rounds: Seed round, private sale/pre-ICO and then ICO, where the bonus percentage was consistent for each round. Unfortunately this is no longer the case, with many ICOs opting to go for more complex fundraising structures to maximize funds raised and minimize bonuses given out.
There are now at least 4 different stages, and within each stage, there are bonuses depending on the amount to be invested.
This makes it extremely difficult to work out the bonus for each round of fund raising and increases the likelihood of a ‘Pump and Dump’ from early contributors as soon as the token is released to an exchange.
In general, when analyzing the token metrics these are the things to look out for:
What is the price of the token?
What percentages of tokens are being sold?
What is the hard cap, and is this in line with similar projects?
What kind of bonuses was given in the earlier rounds?
Are bonus tokens from earlier rounds locked up? (to avoid a pump and dump).
How many tokens are there for the team?
How long are the team’s tokens locked up for?
If the hard cap isn’t met, will they still split the raised capital in the same ratio?
Will the token have an actualuse within the platform/project?
Does the split of raised funds make sense, e.g. If the project is at alpha/beta testing and they claim that 30% is going to R&D then it is most likely that they have an MVP at best and will need that large amount of funds to further develop their MVP to alpha/beta stage.
If I can answer these questions and the numbers add up, then there is a good chance that I will part with my hard earned money to invest. (Given sections 1–3 are also solid).
Other factors:
- Community
A large community doesn’t always mean an awesome investment, there are projects with over 30k members in their Telegram channel, most of whom have heard a project mentioned by an influencer and flocked to see how they can make millions without doing their due diligence.
Having said that, if a community has organically grown and hasn’t need heavy marketing; advertising or shilling from an influencer, than a large number is a good number.
Not all successful projects have a large community at ICO stage. There have been a few ICOs in stealth mode, who have relied heavily on early contributors and genuine believers in the project, instead of those looking for a quick flip.
- Competition
With over 5 Billion USD raised in 2018 through ICOs, many people are seeing this as a ‘get rich quick’ scheme and are launching ICOs very similar to established projects whose tokens have gone up at least 100 times in value.
If a project is a copy paste or extremely similar with no distinct differences to a different/more established project, be careful!
If a project doesn’t have any serious competition, pay more attention and do your due diligence.
- Type of Project
There are many types of projects ranging from those who want to build a Dapp on top of a Blockchain, to those wanting to build Blockchains themselves.
Think of it like this: would you rather invest in the app store itself, or one of the apps within that store? Of course the app store!
That is why it is a smarter investment to look at projects that are building an infrastructure (Blockchain, Protocol, DAO) as opposed to an app.
Also, some established Blockchains have some issues like scaling, security, etc. These would also be smart investments as they are solving a ‘now’ problem.
- Partnerships
Projects who have genuinepartnerships with established companies/cryptocurrencies are more likely to become successful as many of the communities will adopt this project and invest in it, as they believe in the companies that have chosen to partner with a specific ICO. This could be because of hype (see below) or a specific partnership causing a breakout in the price and usage of that specific token.
- Hype
Every now and again comes along a project, which takes the cryptoverse by storm. Main reasons are down to wide spread exposure of the project by different influencers; the project solves an actual problem and people believe that it will take them “to the moon”.
It is true that hyped projects do really well once the tokens hit the exchange and give many of the early investorsa good return, the same cannot always be said for those who invested during the crowd sale, or bought as soon the token was released onto an exchange.
Therefore, Hype is always good if you got in early, as with the bonus you will most likely make a handsome return. In addition to this, many of the influencers are like shepherds; moving the masses to believe that a specific project will shake up the space and they would be crazy not to miss out, causing the token to be over valued as soon as it’s released on the exchange as their followers have increased levels of FOMO (fear of missing out).
Summary
I hope this article has given you a better understanding of just how much time and effort is needed to analyze the true potential of an ICO, and that when you are investing your hard earned money, you need to be more careful and not go in gung ho because the people/influencers you follow on YouTube and around social media have said it’s an amazing project or given it a very high rating.
The solution is to come up with your own rating structure; it could be a percentage, a total out of 10, or just a list of pros and cons of each project. DYOR (do your own research) and invest at your own peril!
Money is there to made, but just for those who work hard and do the correct due diligence (or sometimes just damn lucky!).
MUZIKA A GOOD ICO
Muzika was born in Seoul from the idea of three young Koreans, Inseo Chung, Sangmin Heo, Jangwon Lee, included by Forbes in Asia’s Top 30 under 30 ranking dedicated to innovators from various industrial sectors.Before dedicating themselves to the Muzika project, the three young entrepreneurs created the web platforms Mapianist, MyMusicSheet and KpopPiano, which, according to the press release, have about two million active users and 17 thousand registered music artists from 150 countries.
Muzika Studio v0.1.0 (2018.09.20) is already available for download MAC, Windows, Linux.
The Problem
Musicians and fans are the real value creators in today’s music industry, but they are not properly rewarded for their value creation.
Musicians are starving. Everyone listens to music, more people pay for music, but artists are still not making money.
Fans (that’s us) are still pigeonholed as consumers, though we are the ones who actually make super-stars! We devote our time and effort to vote, make cover songs, go viral, and even write fictions for our favorite artists, but no one rewards our effort and devotion.
Intermediaries (distributors and platforms) are making excessive profit for one time and unsophisticated tasks of 'transferring' the ready-made values.
The Solution
More engaging and rewarding
Muzika platform will revolutionize the production, distribution, and consumption of digital music. With the support from Ontology (one of the well known and respected blockchain projects in the crypto community), Muzika will be able to introduce blockchain technology in its platform and build an integrated platform which aims to connect artists and fans directly hence increasing the artist’s profit and fans get rewarded for participating in community activities like consumption | sharing | brainstorming in music creation, hence creating a more engaging way for fans to connect with artist and vice — versa.
Defend creativity
Muzika platform will also help to defend artist creativity.Protecting all elements of an artist’s creative work from being leaked online in the run-up to its release is a key focus for record companies. Criminal organizations
seeking to profit from illegally obtaining the record before it is fully ready for release jeopardizes the work of artists.
Use of blockchain platform will save music, content and its related information (e.g. artist, date) to be securely saved in the blockchain and share music securely, and ensuring only the agreed recipients are accessing it.
Benefits
Independence. After the final creation of the platform for all users comments, reviews, analytics and reviews will be available.
On the platform, the market for musical instruments and services will be available to users.
Each user can invest in a musician whom they like to listen to, and as a reward for their sponsorship, they will be given some advantages on the platform that will be available only to sponsors.
Competition programs for performers. Muzika platform developers plan to encourage a large number of performers to participate in these competitions, so talented artists will be found.
Live broadcasts of concerts.
Stream music
The Platform Ecosystem
The developers plan to create an independent, self-sufficient ecosystem in which the main actors will be artists and listeners, in which all the awards will be honest and deserving.
The ecosystem consists of smart contacts, thanks to which performers and listeners among themselves will honestly and transparently exchange musical works. Blocked and intelligent contracts on the platform will be used to protect the copyright of performers.
Fans will also receive an award in the tokens of the MZK platform for participating in various competitions and other events. They will be able to vote for the best artist and directly sponsor them, encouraging them to create new music content.
Smart contract will allow digital musical products to be transferred directly from artists to fans, ensuring fairer and more transparent economic distribution.
Fans will be rewarded with loyalty points for their various community activities, which will be regularly converted into MZK coins - the sole medium of exchange for all economic activities in the ecosystem.
Fans will have opportunities to make direct sponsorship to their favorite artists, supporting them and receiving exclusive benefits in return.
All tools available on the platform will serve as the current existing intermediaries in the face of distributors and publishers and fairly distribute compensation for high-quality music content.
Token Sale and ICO Details
MZK is an ERC20 token built on top of both the Ethereum and Ontology blockchain network. However, in the future, Muzika plans to develops its own protocol blockchain specialized for community-based applications that facilitate all digitized forms of creative works.
Token Details
Token: MZK
Standard: ERC20
Main sales: 205 million MZK
Total will be released: 1,000,000,000 MZK
Hard cap: 20,000 ETH
Token Distribution
The MZK token is used to gain access to the Muzika ecosystem. It serves 4 main functions:
Community building
MZK tokens are used as an incentive mechanism to foster greater participation amongst community members. Members earn MZK tokens for creative brainstorming, exchange of feedback, and more.
Means of making transactions for commercial items and services: Ecosystem participants can exchange digital music, sheet music, musical instruments, recording services, and much more using MZK tokens.
Sponsorships opportunities
Users can sponsor artists and become patrons by paying monthly subscriptions to their content using MZK tokens. Patrons will receive exclusive access to the products and services offered by the artist. They will also get to be more involved in the creative process of the music.
Community programs
MZK tokens will also help fund community programs and events like auditions, contests, live streaming sessions, etc. All of these activities help strengthen the Muzika network.
MZK tokens can be obtained by participating in Muzika’s upcoming ICO, or by purchasing the token on cryptocurrency exchanges. They can also be mined through active, loyal participation in the community.
For more information, please visit:
Website: https://www.muzika.network/
Whitepaper: https://www.muzika.network/assets/mzk-whitepaper-en.pdf
ANN Thread: https://bitcointalk.org/index.php?topic=5042121.0
Telegram channel: https://t.me/muzika_english
Twitter: https://twitter.com/muzika_official
Facebook: https://www.facebook.com/muzikanews/
Reddit: https://www.reddit.com/r/muzikaofficial/
Bitcointalk username:Samuel321
Bitcointalk profile link: https://bitcointalk.org/index.php?action=profile;u=1925101
DISCLAIMER:This post was brought to you by Opeyemi being my personal project on Muzika campaign project