ICO Token Evaluation and Improper Emphasis on Blockchain Technical Experts and ICO Advisors

Statistics can no longer be ignored. Once the tokens are on crypto exchanges, after the frenzy and ‘FOMO’ of joining the crowdsale wears off, most ICOs tank and stay tanked.

Most observers who have been keeping an eye on the ICO phenomenon universally agree that post-crowdsale prices for ICOs in the past few months have tended to lose, with many buyers waiting in vain for their pledges to ‘moon’, once cryptocurrency exchanges hit the portal.

However, what is not being discussed is why we are witnessing this phenomenon, and why participants in a crowdsale, including the rating companies we rely on to make a choice, must be wrong in picking the most valuable ICO, or when the crowdsale ends. The price has the best potential for growth.

While there are many reasons one can legitimately propose for this phenomenon, there is one fact that I think is probably more responsible for it than other competing reasons: ICO token evaluation and ‘blockchain experts’, ‘misplaced emphasis on ICO advisors’ or ‘Technical whizkids’ for erc20 tokens.

I’ve always thought that the need for blockchain technology experts or ICO technical consultants is exaggerated, or even completely misplaced, when a project is judged by that criteria, unless the project is actually trying to create a new coin concept. For most ERC20 tokens and copycat coins, the real important consideration should be the business plan behind the token and the managerial antecedents and executive profiles of the team leaders.

As anyone involved in the industry should know, generating ERC20 tokens from Ethereum or similar tokens from other cryptocurrencies doesn’t require great technical skills or an overrated blockchain advisor (in fact, with new software out there, an ERC20 token can be generated in less than 10 minutes Can be done by a complete technical novice.

So shouldn’t be a big deal for technical tokens). The original business plan should be; level of business experience; The skills of project leaders and fundraising are key to the company’s business marketing strategy.

Frankly, as an attorney and business consultant for over 30 years in various companies worldwide, I don’t understand why people are looking for some Russian or Korean or Chinese ‘crypto whiz’ or ‘crypto advisor’ to determine the strength of an ICO. A crowdfunding campaign for a business idea is basically for…

I am of the strong opinion that this is one of the main reasons why most ICOs do not live up to their pre-launch hype. In an age where there is an abundance of token creation software, platforms, and freelancers, the disproportionate focus on blockchain experience or technical skills of promoters is mostly misplaced. It’s like trying to value a company’s potential success based on the ability of its employees to create a good website or app. That train left the station long ago with the proliferation of tech hands on freelancing sites like Guru; Upwork, Freelancer and even Fiverr.

People seemed to get too caught up in the hype and technical prowess of people promoting ICOs, especially ERC20 Ethereum based tokens, and then wonder why a technologically superior Russian, Chinese or Korean guy couldn’t give the company its business end after the fundraising campaign.

Even many of our ICO rating companies assign a disproportionate number of points to team members’ crypto experience, how many crypto advisors they have, and the underlying business model for their team’s ICO success experience. To be made with funds raised

Once one realizes that more than 90% of cryptos and ICOs are simply tokens created to raise crowdfunding for an idea, and not just tokens for token sake, the public’s emphasis will shift from the technical angle to the more relevant work of valuation. The business concept itself, and the corporate business plan.

Once we move into this era of evaluation before deciding to buy or invest in cryptocurrencies, we will then begin to evaluate the future potential or value of our tokens based on sound business considerations such as:

– Swot analysis of the company and its promoters

– Managerial skills and experience of team leaders

– Solidity of business idea beyond creating a token

– The company’s marketing plan and strategy to sell those ideas

– Ability to deliver underlying products to the market

– Customer base for products and services produced by the company

– and the basis for adoption in the market place

What most people fail to realize is that the potential for their tokens to increase in value post ICO is not so much dependent on anything technical but on the good things the fundraiser has done in the company and the perceived increase in the company’s valuation. It develops its business plan and delivers its business products.

Of course, buying cryptocurrency is not buying stock, and it is not buying a security of a company. We get it, but tokens react the same way stocks react to good news or bad news about a company. The only difference is that in the case of cryptos, the effect is magnified 100 times.

So, when a company meets some financial or business milestone, the price of its token on the exchange will go up… and when nothing good is happening it will go down quickly. So, what the company will do after the ICO and how it will do it should be of utmost importance for anyone who doesn’t want their token to drop in value and stay down forever.

Of course, most tokens will drop when tokens hit crypto exchanges after the ICO, because of those who want to take immediate profits, but whether it will return to give you the expected multiple digit profit will always depend on the criteria. As I already outlined above. After you buy a token, the value of ‘crypto advisor’s’ and ‘technical whizkids’ goes to zero with the probability of your token mooning.

Following this reality, I think a smart crypto buyer or investor should focus less on how many crypto advisors a project has or how technically sound the team is (unless the company’s underlying business is technical in nature) and focus more on managerial, Marketing and raising funds through an ICO to the company’s potential customer base.

In other words, assign more points to the business and management side of the ICO than the technical terms that won’t help your token in the market while raising money!