🔰 Points to remember when Investing in ICO's 👈😏

Hi, Pankaj here 👋

                         ICOs were very popular last year largely because of their high ROI, even in this bear market many people are investing in ICOs in the hope of doubling or tripling on their initial investment but a very few are actually making money investing in ICOs. The problem is not that all ICOs are bad or anything like that, but a lot of ICOs are coming each month and people without doing any homework on their end are throwing in their hard earned money into these ICOs just to make a quick buck and the result being that they suffer a loss. Let me tell you this if you can choose the projects wisely then, in this bear market too you can get a good return investing in ICOs. So today I decided to point you some factors which you must pay attention and most importantly look for before investing in your next ICO. So without wasting any of mine and your's time, let's get started.

                         By project category I mean type of problem the ICO team is targeting. Right now the trend is of protocol projects as there is a great requirement for improved protocol and infrastructure solving the current issues of blockchain technology like security, decentralization and scalability as compared to DAPPS. This is because we are still in the early stage of the blockchain and as of now we need better protocol and Blockchain projects which will lay the foundation for future DAAPs to operate. Remember to follow the trend and make changes in your selection as per the trend . Sooner or later, the protocol trend will be over once we have solved a majority of the issues, then the days of DAPPS will come.

                         No matter how great is the idea of the project you are thinking of investing, after all it all comes down to execution of the idea which will bring in value to the project for which a good and experienced team is required. If the team supporting the project is not upto you expectation mark then avoid investing in the ICO.

                         Now you may think, how do I know if the team is stong or not? Well there are a few things you can do to check.

Check Team member - Head over to their official website and try to find the team members and advisors involved. If their site doesn't display team list avoid the ICO as it may true out to be a scam.

Background genuinity check - In this step you will have to be an online stalker of a sort. Don't get me wrong but you need to make sure to whom you are handing over your hard earned money otherwise if you have spare cash that you don't bother losing then just message me I will send you my Paypal address. Jokes apart check each individual team member's social account like LinkedIn to have a look at their past experience before this ICO and also that if they are mentioning the ICO as their present work as most of scam ICO paste other profiles on their site without the individual whose profile is being used even knowing. If the team clears this step then it's green signal.

                         Apart from the team one more important factor to look for is that if the ICO team is having any prototype or MVP(Minimum Viable product) or Testnet ready or coming within months from the date of ICO. This is because as you may know as of the most of the prices in the crypto world are based on speculation and so if the team have a very late product launched after the ICO there is a higher probability of the price going low as most of us have already seen many projects going below their ICO price. So investest in projects having at least a prototype to ensure a good return.

                         This is my favourite part. By token metrics I mean the economics of the token you are purchasing. Token economics if you ask me is very important and I use this parameter the most when making investment decisions as it gives me a clear idea of how much return I could expect from a specific token. It has the following parts -

Circulating and Total supply - Look for the circulating supply and total supply of the tokens. If the gap between them is large then when new tokens will be released there will be a downward price action if the demand of token doesn't increase proportionately in the long run. Also if the supply of a token is higher then for the same capital inflow the price increase of each token is less as compared to a token of low supply.

Hard Cap - This is equally important as total supply as if the hard cap of the ICO is too high then your ROI will probably be lower. You can consider the hard cap to be sort of initial market of an ICO. Think of it like this, if an ICO A is raising say $10 mn and another ICO B is raising $100 mn the probability of ICO A giving a return of 10 X is more as compared to the probability of ICO B giving ROI of 10x as that would require ICO B to have a market cap of $1 bn as opposed to a very possible market cap of $100mn for ICO A.

Community must be the major holder - Look for ICOs and project where the majority of tokens are held by community members and not by the team members of the ICO or a particular individual. It makes the token more decentralized and thus as a rule of thumb less prone to manipulation.

                          ICOs offering large bonuses in their presale or private sale have a higher probability of getting dumped on exchange listing which may negatively affect the investors in public sale as the price of token may very likely fall below the public sale price, so do keep this in mind Stay away ICOs giving large bonuses.

                         Last but not the least a good ICO must have a proper White paper pointing out what they are trying to achieve, how are they going to achieve and all the details of their project must be mentioned clearly as many people including myself read the white paper of a project before making any decision. Apart from this, they must also include a roadmap Lack of this signifies that the team is not clear of their goals and target. This can lead to problems later on if the team behind the project cannot meet the expectations of the investors and this may result in a high drop in its token price or may even turn out to be a scam later on.

With this, I am wrapping up this article and as always, Thanks for reading.

✌️ FOLLOW, UPVOTE or RESTEEM may be if you like this article.
✍️ +VE comments, suggestions and pointing out my mistakes before this post expires is welcome ❤️, after that nothing I can do about and for -VE and hate comments I don't give a shit.