Since the launch, the ICO Scroll team has been constantly modifying and adapting its approach to the evaluation of projects staging ICOs in order to keep up with the dynamically developing industry. The assessment tools developed by ICO Scroll are intended to help potential investors decide whether to buy tokens of startups staging an ICO/Token sale.
Rating-score is aimed at assessing the risk of potentially fraudulent activities. The higher the risk-score, the less information there is on the details of the ICO campaign, product development, the team and the documentation, which calls into question the possibility for success of the startup and the ICO/Token sale.
Projects are evaluated against characteristics such as:
Poor quality, weak, or unskilled management can doom a job from the start. Advisors who serve just to pad their own resumes and who have ill-defined functions can be worrying. However excellent management, with pertinent market experience and contacts, can make the distinction in between an effective and rewarding ICO, and a flub.
If you do not have a group ready and able to develop the important things, it will not matter who is at the helm. Excellent skill is difficult to discover. Designer profiles must be inspected to make sure that they have a tested history of operating in a field where they must have the ability to prosper.
What is the technology behind this ICO, what product are they creating, and is it new, innovative, different – and needed?
The IOTA project is a spectacular example of engineers run amok. The technology described or in use must be maintainable, achievable, and realistic, otherwise the risk of it never coming into existence is incredibly high.
There does not need to be a market in order for an ICO to score well in this classification– however if it means to produce one, the argument needs to be exceptionally engaging.
If there is an existing market, concerns here include whether it is ripe for disturbance, whether the innovation makes it possible for something much better, less expensive, or faster (for instance) than existing services, and whether the marketplace is traditionally open to originalities.
Most ideas have several implementations. If there are others in the same field, the analyst needs to ensure that the others don’t have obvious advantages over the company in question.
Moreover, this is the place where the analyst should identify any potential weaknesses in the company’s position moving forward. For instance, a fundamental weakness in the XYZ system is that the token is not required for using the product or services.
With lots of ICO concepts, the timing might be far too late or prematurely. It is very important for the expert to think about what does it cost? need there is for the item in concern. While the IPO boom moneyed a great deal of fantastic concepts that ultimately did pertain to fulfillment, an excellent expert would acknowledge when a concept is too early, too late, or perfect.
A few of the least engaging ICO proposals are those that declare their creators will attain some far-off objective, at some point in the future, so long as they have your money with which to do it.
More intriguing (generally) is the ICO that looks for to enhance some development along the course to success, and which has a clearly-identified roadmap with possible and affordable turning points along the method. Creators who are currently partially-invested in their items are usually more purchased their futures.
Having a strong community is one of the fundamental building blocks of any strong blockchain project. It is important that the project demonstrates early on that it is able to generate and build a strong and empowered support base.
The ICO marketplace is becoming more crowded and more competitive. While in the past it was enough to merely announce an offering, today’s successful ICO’s work hard to build awareness and excitement around their offering.
Among the most significant elements weighing any analysis is cost. The lower the cost the more there is to acquire. However too low of a rate might lead to an under capitalized job. It is for that reason crucial to examine cost relative to the specific job, its maturity and the marketplace it is pursuing.
The overall supply of tokens must likewise be validated by the requirements of the job. Issuing a billion tokens for no factor will do no one any great.
Interaction is crucial. The success of a task is highly connected to the task leaders’ capability to interact their objectives and accomplishments.
Things do not constantly go as prepared however resolving problems and keeping the neighborhood and financiers in the loop can make or break a task.
Rating-score is intended to give an investor an initial impression of a project and address any possible fraudulent intentions of the project founders, highlight the level of the project’s readiness and the presence or absence of a product.
Rating-score shows investor level of interest in the project. The higher the score, the more people may consider the project for future investments.
The parameter accounts for the following:
- The number of users on the main social media pages of the project.
- The number of mentions in the press.
- Mentions in mainstream technology media and in prominent finance publications.
- The number of search engine results.
- Traffic on the main website.
Social media analyzed include the following platforms: Bitcointalk, Telegram, Twitter, Medium, and YouTube.
Among prominent financial publications, as well as mainstream editions devoted to technology, we cite such resources as Techcrunch, VentureBeat, Forbes, WSJ, Reuters, etc. Project mentions in publications outside of the crypto industry’s scope increase exposure, making the project more visible and broadening the audience of potential investors. Moreover, mentions in established IT and financial media reduce the risk of fraud.
The metrics of this parameter are divided into five levels: very low, low, medium, high, and very high. The higher the score, the higher the interest in the project from the community. Great attention of the audience on a startup can serve as a good indicator of investment interest in the project, equating to the level of potential demand for project tokens.
This report is an independent expert opinion from ICO Scroll. Basic Review aims to give investors a common understanding of the project and its strengths and weaknesses. Basic review does not involve a project audit or assigning it a rating of investment attractiveness — it is an informational product.
ICO Scroll experts carry out a basic review of a project in the following directions:
- The business model’s viability.
- Elaboration of the financial plan.
- Competitive environment assessment.
- Assessment of market dynamics.
- Project team evaluation.
- A study of the internal economy of the project.
The review provides an overview of the scope of the project, the vector of its development, features of the product or service and the team’s competence.
According to ICO Scroll experts, any rating should answer specific questions from potential investors. Taking into account the specifics of the industry, and more precisely the quality of preparation in startups attracting investments, when writing an Investment Rating we aim to develop an approach relevant to the current level of development of the industry.
This approach should take into account the youth of the market, the innovative nature of projects, as well as the lack of analogues in traditional market segments. Investment Rating answers the following questions:
- Whether the stated information on the current state of the project, the team, the market and the degree of development of the technological component of the product is accurate.
- What are the team’s chances of implementing the product or service with the stated (officially confirmed) set of developments, team competencies, business model, current market development and competitive environment.
At the same time, we understand that the ecosystem of blockchain and of blockchain-based projects that are entering the market, significantly differs from all known market segments. Our assessment approach takes into account all the main aspects of traditional practice for evaluating startups, and identifying the unique features of the blockchain ecosystem, predicting its development and focusing on technological analysis allowing us to significantly update it.
Currently our experts clusterize the projects that are launching their products on the basis of distributed ledger technology as follows:
- Decentralized application platforms (Ethereum, EOS, NEO, etc.)
- Interoperability (Polkadot, Cosmos, ICON, etc.)
- Oracles (Oracles Network, etc.)
- Decentralized Exchange Protocols (0x, SWAP, etc.)
- User controlled Internet (Blockstack, Status, etc.)
- Smart Contracts (Etherparty, Blockcat, Agrello.)
- Dapps (the most common categories — Financial services, Business Services, Value Exchange.)
Assessment of the technological component and the potential role of the token in the system
Evaluating projects that create developer tools, such as platforms for the development of smart contracts and Dapp (NEO, Ethereum) or startups that provide interoperability (Polkadot, Cosmos), requires an individual approach because of the greater scaling and potential prevalence of the token (this factor can affect the price growth of the token).
Such projects (unlike Dapps) are analyzed differently: With a strong emphasis on the technological component and the ability of the team to solve the existing problems with the blockchain ecosystem. Now this area has a high potential due to the market readiness, the existing need for change and development and a lesser influence of external forces during the project implementation.
Dapps (decentralized applications) we evaluate separately because of restrictions which can be imposed on them by the platform on which they are developed (blockchain scalability). To evaluate them it is necessary to define a project’s environment qualitatively (whether the project will be able to function in it, whether it will receive user and partner support, whether its plans for entering the world market are realistic). We pay special attention to the analysis of the market and future stakeholders in the project.
Moreover, we divide the overall approach to project evaluation into two areas – qualitative and quantitative components.
- Technological operation environment — assessment of a project’s impact on the blockchain infrastructure and its development, solution of current problems, possibility of integration with other products or use as a basis for building new products (reduction of technological risks).
- Market positions – assessment of the current market segment, its growth rate, competitive analysis (reduction of market risk).
- Legal preparation of the project — compliance with regulatory frameworks, support from the government, existence of a legal entity, necessary and sufficient documentation, KYC, AML procedures (reduction of legal risks).
- Project management — whether the team has the required competence to implement the project (reducing risk of non-execution).
- Probability of support (analysis of early investments in the project).
- The stage of technical development of the project — the existence of a prototype of the product, its technical characteristics, protocol or application operation mechanism, key components (reduction of production risks).
- Analysis of the token, its functionality and forecast of its value change in the long-term perspective (investment attractiveness of the asset) based on key principles of token economics.
- Forecasting demand and supply for the digital asset offered for sale by the company (determining the presence of factors creating a supply overhang or artificial deficit of the asset).
- Analysis of the distribution of raised funds (an estimation of project costs, verifying that the requested financing is in accordance with the project’s objectives and expenditure items by comparing it with open market cases) and tokens (determination of risk for investors in the ICO.
The metrics of this parameter is divided into 10 levels: Positive, Stable, Risky, Negative. The higher the rate assigned to the project, the better the overall quality of the project’s documentation, and the lower the number of risks for future investors.
In the process of assigning a rating ICO Scroll expresses its independent opinion on the project raising funds by means of an ICO. The rating is an analytical product of ICO Scroll and cannot be construed as an investment recommendation.
When writing a review and assigning a rating, ICO Scroll experts check the validity of all figures and facts provided by the project team, using all relevant sources of information which are freely available. The lack of any necessary information in the public domain leads to a decrease in the rating score.
Our team consists of professionals in the financial industry. We strive to provide impartial reviews based on our long-term experience with ICO analytics. Analysts are open for communication with project representatives during an audit. Each ICO Scroll review is itself subject to reviewing and additional verification. We assess more than 30 projects staging ICOs monthly; our assessment is not automated and is based on a deep understanding of the market.