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Ionix Chain $IONXInvesting in a new crypto ICO is a lot like being a detective on a brand new case. Some clues that you find will lead you to a hidden treasure. But other clues might lead you straight into a dangerous trap. To solve the case and find the real gems, you need to have a good detective’s kit.
This guide is that kit. It will give you a simple, step-by-step checklist that you can use to investigate any new crypto project. It will be your definitive guide on Evaluating a Crypto ICO: What to Look For.
The Golden Rule of Every Investigation: DYOR
Before we open our detective’s kit, we need to remember the golden rule of all crypto investing. That rule is: DYOR. This stands for “Do Your Own Research.”
No one else is responsible for your money. Not an influencer on YouTube, not your best friend, and not a random person online. You are the one who has to make the final decision. This guide will teach you how to do that research effectively and safely.
Your 7-Point Evaluation Checklist
This is the most important part of our guide. Here is a simple checklist you can use to investigate any new ICO and find the most important clues.
The Team
This is the most important part of your investigation. You are about to give your money to these people. So, you need to know exactly who they are.
- Are they public (“doxxed”) or are they ghosts? The first thing you should check is if the team members show their real names and their real faces on their website. An anonymous team that uses cartoon pictures as their profile photos is the biggest red flag in all of crypto.
- What is their experience? It’s not enough to just see a face. You should go to LinkedIn and look up the team members. Do they have a real history of working in technology or business? A team with no experience is a huge risk.The Whitepaper
- The project’s whitepaper is its official business plan. It is the main case file that tells you everything you need to know about the project.
- What is the problem and solution? A good whitepaper will clearly explain what real-world problem the project is trying to solve. You should be careful if the whitepaper just uses a lot of confusing and fancy words.
- Is it professional? A whitepaper that is filled with many spelling mistakes and bad grammar is a sign of a very lazy and unprofessional team.
The Tokenomics
“Tokenomics” is just a fancy word for the rules of the token. This section of the whitepaper tells you why the token exists and why it might be valuable in the future.
What does the token do? A good token will have a real purpose, which is also called “utility.” Is it used for voting, for paying fees, or for getting special access to something? A token with no real use is a very bad sign.
Is the distribution fair? You should look for a pie chart that shows who gets all the tokens. If the team is keeping a huge slice of the pie for themselves, they might just be greedy. This is a key part of learning Evaluating a Crypto ICO: What to Look For.
The Community
A project’s community can tell you a lot about it. You need to join their Telegram and Discord channels and be a quiet observer for a while.
- Is the hype real or fake? Are people having real and smart conversations about the project? Or is the chat just full of computer bots spamming “to the moon!” and “1000x!”?
- How do the admins act? Are the people who run the chat professional and helpful? Or do they ban anyone who asks a tough but fair question? This tells you a lot about the project’s true culture.
The Security Audit
A project’s computer code is like its engine. You need to make sure that the engine is safe and will not break down.
- Is there a security audit? A serious project will pay a professional security company to check their code for any bugs. They will be proud to show the audit report on their website.
- No audit is a massive red flag. This was a hard lesson that was learned during the history of classic Initial Coin Offerings (ICOs), where many projects got hacked because their code was not secure.
The Roadmap
The roadmap is the project’s timeline of all its future goals. It shows you what they promise to build and when they plan to do it.
- Is it realistic? You should be careful of roadmaps that promise to build a new universe in just six months. Building great things takes a lot of time, and a realistic roadmap will show that the team understands this.
- Have they delivered in the past? If the project has been around for a while, you can check if they have met their old goals. A team that meets its deadlines is a team that you can trust.
The Funding Goals
You should also look at how much money the project is trying to raise in its ICO.
- Is the goal reasonable? If a project has very small goals but is trying to raise $50 million, it is a red flag. The fundraising goal should make sense for what they are trying to build.
The Smartest Way to Start Your Investigation
Now you have a powerful checklist for your investigation. But every good detective needs a safe place to start their work.
Finding Good Data
The first challenge is finding all of the official links for a project, like its website and its whitepaper. Searching for these on social media can be very risky because scammers often create fake links to trick you.
This is why the best way to start is to use a trusted hub for new ICOs. These websites gather all the official links and key project data in one organized place. This gives you a safe and efficient starting point for your investigation.
Checking the Market Context
Finally, you should remember that even a great project with a great team can fail if the overall market is bad. Before you decide to invest, it is always a smart idea to check the current crypto market prices to see if the market is healthy.
Conclusion: Your Guide to Confident Investing
Let’s go back to our detective analogy one last time. A great idea is the case. A strong team is your main suspect. And a clear whitepaper is your case file. You need to investigate all of the clues to solve the mystery.
By following this simple 7-point checklist, you now know how to evaluate a Crypto ICO: What to Look For. This process will not guarantee that you will pick a winner every time. But it will dramatically reduce your chances of falling for a scam or investing in a poorly planned project.
It is the most important skill you can develop as an early-stage investor. If you ever need a second opinion on a case, it is always a good idea to get in touch with an expert team for help.
