Initial Coin Offerings or ICOs are a capital raising technique that trades future cryptocurrencies for cryptocurrencies with immediate liquid value or for fiat money. The digital trade commodity is called a token. A percentage of the token sale goes to the ICO participants in the form of tokens, and the rest goes to the company’s initial capital.
An ICO gives entrepreneurs a chance to invest in their projects without the hassle of equity distribution. Any investors, big or small, can fund their projects using ICO’s. ICO’s are largely successful because the token’s price would be much higher during listing than during the ICO sale.
While cryptocurrencies like Hdac and Filecoin were hugely successful, raising $258 and $275 million, respectively, there are still several ICOs that scammed their investors. Therefore, it is important to keep in mind a few key elements while investing in ICOs.
Know your investment
Try to learn everything you can about the development team and advisory board. Research each member’s experience on Google and LinkedIn. Try to understand if the team has enough experience in the field to support the ICO when it’s released. Does the company have a valid whitepaper? Has the company launched a product with a preview of its future functionalities?
A bona fide ICO would display token distribution stages with the maximum amount of capital allotted to development and operations. There should also be a legal contingency fund, marketing and community outreach and for human and infrastructure support.
Presence on media and community activities
It is important to follow the ICO on media and in forums. What is the attitude of the crypto-community towards the ICO? How well-known is their presence on credible platforms like reddit and quora? A genuine ICO would be active on several communities and put some effort into publishing information about their product on media platforms.
Transparency is crucial in drawing in investors and a company that actively updates its followers is more likely to be legitimate. Let’s face it; a scammer would never put in more effort than is necessary to grab attention.
Most of the information regarding the product is present in its whitepaper. Take time out to read through whitepapers carefully. Note all positive and negative aspects of the ICO and add some research of your own. ICO whitepapers have to potentially answer a basic question: what added value does the ICO bring to the fintech and cryptocurrency market?
The ICOs implementation of blockchain technology
There is a single most important question that will put ICOs into perspective. What does the ICO bring into the market that existing cryptocurrencies and blockchain platforms do not offer? There are several sectors in which blockchain technology is playing a major role today. Using tokens to facilitate some such sectors is one way of adding value to the ICO’s.
Feelium Pre-ICO sale
Feelium is a tokenized platform that will make contractual transactions simpler and more secure. Feelium tokens can facilitate smart contracts and escrow services on the platform and thus, allow trust-less transactions between buyers and sellers.
In addition, Feelium helps you build a wallet for P2P transactions, and will also be a one-stop trading platform for B2B and B2C transfers.
Explore Feelium’s extensive whitepaper here. Feelium is working hard to keep the crypto-community updated on its pre-ICO sale and utility features. Feelium token cost just $1 USD today! Read more at www.feelium.co