There are several ICOs. Due to Ethereum-based ERC-20 tokens, the phenomenon, which began three years ago, is now easily accessible. After learning how to select a good ICO, you will find a list of 10 red flags for poor ICO investments.
Here are 10 Following Signs of Bad Ico
1 – The team lacks experience in the field of cryptography: No notable crypto advisors or venture capitalists are investing. Observing interviews with the team’s main members might assist you to determine whether or not to trust them.
2: “This is a three-year-old business with twenty employees”: Is the firm simply concerned with profit? If the pivot is not required, then the answer is affirmative. Why is the initial coin offering (ICO) necessary if the company is currently profitable in its industry?
3 – Bonuses for all: The more funds raised with a bonus, the greater the likelihood that the price will be traded around the discount level. The situation is direr when there is no vesting for pre-sale investors.
4 – Hard cap is huge: save in rare situations, an unlimited cap or very-high cap requires massive demand to create a secondary market (or exchanges). On exchanges, no one will buy tokens.
5 – No genuine need for the token: The project ecosystem is developed around the token. ICOs are unnecessary if you can replace the token with Ethereum or Bitcoin and it still works.
6—Aggressive marketing: too many Facebook and Google Remarketing banners and advertising, especially when they promise big earnings. Red light.
7– Poor community discussions: Join Telegram, ask questions, and observe how developers reply. The ICO’s BitcoinTalk Announcement topic is similar. Strong communities foster valuable debates.
8 – The public auction lasts too long: due to a high cap or poor demand. Better to raise 20M than 40M.
9 – No major exchanges interested in listing the ICO’s tokens: The legal team won’t let the ICO teams talk about exchanges, yet it’s a big element of the game. Poloniex ruled in 2016, and Bittrex in 2017. Binance—2018’s exchange? Maybe. Each new currency helps its initial ICO investors.
10 – Market cap is already huge: If the corporation sells 10% of the circulating tokens for 100 Million USD, the token initial market cap is 1 Billion without any 3x or 5x that will explode the market cap value before trading has begun. Circulation determines this. Be skeptical if there is no limited quantity of tokens, a small fraction is issued to the public, and no lockup on the tokens held for the team.