Let’s just accept the fact – the time of ICO projects is over. The number of ICO projects decreased, however, and it can be seen by the ICOBench’s statistics, the decrease was there but it was not as dramatic as most crypto experts predicted. Obviously, STO is the trend of 2019. More and more of those who wanted to make ICO at the end of 2018 are trying to reset their projects to STO and hoping for STO hype in 2019. Anyways, the bad news is it seems like STO is not a panacea from scam and fraud.
What are the main parameters that can help you to identify if STO/CTO projects legit?
You can conduct a very quick review, but again this is all conditional here are some point that I normally review:
Website & main documents:
Check when the company website and domain were set. It should not be recently created.
Go to the website of the project and download White Paper and legal terms & conditions, review them carefully and pay attention to the following points:
a) market analysis;
b) financial indicators and tokonomics;
c) look carefully if there is a minimum investment amount. If it is there and you invest less than this amount will it be returnable;
d) are the project development scenarios real?;
d) whether softcap and hardcap are assigned;
If the IСO / STO already collects funds and they have a counter on their website. No matter how bright the picture is on the counter, you need to understand that the counters on the website can not always give the correct information so do not believe them fully.
Marketing in general:
ICO/STO should have a solid marketing plan in order to succeed. I normally check considering the point stated below.
Check Telegram chats and channels, first of all, there should not be a huge number of followers. If you see a large number of follower and a small number of views of publications by the administrator of the group, then most likely these are all bots or airdroppers and the project does not have an audience. The same should be done with the social media channels of the project, whether only boutists write there for tokens or there is a real community besides.
Evaluate and check the traffic to the website and publications in media about the project.
For this, it is enough to use SimilarWeb. What types of traffic prevail direct or Google organic? Do they use email and display advertising? From which geo the audience of this project is formed? Under normal conditions, the marketing activities of the project should be of high quality and cover all channels.
Ask in telegram chat of the project about the airdrop.
Airdrop is used in marketing a lot, in fact, airdroppers are the first to sell tokens as soon as the company goes to the exchange that definitely drops the price of the token. This is not a scam but the dropping price of a token is not an interesting perspective for any investor.
Is there a smart contract on GitHub? how many commitments were made from the date of publication up to the current date? This indicator shows that the blockchain part of the team is working. Sometimes projects might upload the draft of the smart contract at the github. That is not a big issue. In this case, you need to clarify in the chat of the project or via email when the smart contract will be launched.
Personally, I do not believe in teams when everyone is sitting in different countries. I always check if the main team that is responsible for the product is in one location. Plus, always check the team’s Linkedin for their previous jobs and achievements. The absence of Linkedin or its incompleteness for me personally is a red flag.
You can also check with the admins whether there are webinars with the main team of the project, and use this chance to clarify all questions that you have. During those sessions ask as much as possible about the project, perspectives, and guarantees.
Kate Bublik CMO Crypto-A