Participating in new tokens is incredibly risky. Here’s a handy infographic to determine quality token sales and spot red flags.
First off, ask yourself whether this new crypto actually has anything to do with blockchain. If a project doesn’t leverage blockchain technology, they probably don’t need a token. More and more companies are trying to jump on the ICO bandwagon to raise funds for their startup because it’s easier than venture capital fundraising. Stick to companies leveraging public, decentralized networks to ensure accessibility and accountability, respectively.
Next you need to determine the potential value — the extent to which the project solves a problem or creates a new market. Read the whitepaper to answer: Does the project create value for participants? Is the use of a decentralized network is justified? Are the business goals sufficiently well-outlined.
According to Superbloom’s recent user polls, only 39% of ICO participants read every whitepaper. That’s one place where Superbloom can help you avoid a costly error, by providing cliff-notes on whitepapers and applying the Superbloom Quotient (read more on that here).
Of course, just because the whitepaper is good, doesn’t mean you’re out of the woods. Nearly half of all investors believe that the team is the most important factor in determining whether a project will succeed. Make sure they have sufficient experience and and a good track record before you trust them with your money. FYI we always meet with the team before listing a token on the Superbloom platforms for our members.
Finally, you don’t want to be part of a token sale that professional investors have all passed on. Ask what funds and syndicates are participating in the sale.This is another place where Superbloom’s multi-step approval process comes in handy. We work with more than a dozen syndicates to analyze deals and we only list tokens after at least one of our partner syndicates participates in the sale (view Superbloom’s Partners).
Let us know if you found this infographic helpful! At Superbloom, we mitigate risk for our members by vetting deals and providing diversification. Superbloom is a crypto trading platform built on blockchain. Purchase Superbloom’s SEED Token to get access to private presales and airdrop rewards. Learn more at Superbloom.com.