ICO Token Valuation and Incorrect Emphasis on Blockchain Technical Experts and ICO Advisors
Statistics could no longer be ignored. Most ICOs stagnate, and remain stagnant, once the tokens hit crypto exchanges, after the frenzy is over and the ‘FOMO’ attending crowdsale is over.
Most observers tracking the ICO phenomenon universally agree that the trend in recent months has been for ICOs to lose value after crowdsale, with many buyers waiting in vain for the ‘moon’ to come their way. promised, once the cryptocurrency hits an exchange. portal.
However, what is not being discussed is the main reason we are witnessing this phenomenon, and what the participants in a collective sale, including the rating companies that most of us trust to make a decision. , they must be doing wrong in choosing which ICOs have the most value. or has the highest probability of increasing in value after the group sale is complete.
While there are many reasons why one could legitimately offer the phenomenon, there is one fact that I think is probably more responsible for this than most of the other reasons in dispute: the valuation of the ICO token and the misplaced emphasis on the ‘blockchain experts’, ‘ICO advisers’ or ‘technical geniuses’ for erc20 tokens.
I have always thought that the need for blockchain technical experts or ICO technical advisers is exaggerated, or even completely out of place, when a project is judged by that criteria, unless the project is really trying to create a new currency concept. . For most ERC20 tokens and copycat coins, the really important consideration should be the business plan behind the token and the managerial backgrounds and executive profiles of the team leaders.
As anyone involved in the industry should know, creating an ERC20 token of Ethereum, or similar tokens of other cryptocurrencies, does not require any great technical skills nor does it require any overpriced blockchain advisor (in fact, with the new software available, a token ERC20 can be done in less than 10 minutes by a complete technical novice.
So technical should no longer be a big problem for tokens.) The key must be the business plan; level of business experience; the competence of the project leaders and the business marketing strategy of the parent company raising the funds.
Frankly, as a 30+ year lawyer and business consultant for various companies globally, I can’t understand why people keep looking for some Russian, Korean or Chinese ‘Crypto Whiz’ or ‘Crypto Advisor’ to determine the strength of an ICO. . for what is basically a crowdfunding campaign for a BUSINESS CONCEPT …
I am of the firm opinion that it is one of the main reasons why most ICOs never live up to their pre-launch expectations. In an era where there is a lot of token creation software, platforms, and freelancers out there, the disproportionate focus on the blockchain expertise or technical prowess of promoters is mostly misplaced. It’s like trying to assess the likely success of a business based on the ability of your staff to create a good website or app. That train left the station a long time ago with the proliferation of technical hands on independent sites like Guru; Upwork, freelancer, and even Fiverr.
People seemed too caught up in the hype and technical ratings of people promoting an ICO, particularly Ethereum-based ERC20 tokens, and then wondering why a technically superior Russian, Chinese, or Korean guy can’t deliver on it. business objective of the company after the fundraising campaign.
Even many of our ICO rating companies seemed to assign a disproportionate number of points to the team member’s crypto expertise, how many crypto advisors they have, and the ICO success experience they have on their team, rather than focusing on the underlying business model. to be created with the funds raised
Once one understands that more than 90% of cryptocurrencies and ICOs are simply tokens created to collect collective funds for an idea, and not a token for the sake of tokens, then people’s emphasis will shift from technical angles. to the most relevant evaluation work. the business idea itself, and the corporate business plan.
Once we enter this era of evaluation before deciding whether to buy or invest in a cryptocurrency, we will begin to value the future prospects or value of our tokens based on sound business considerations such as:
– SWOT analysis of the company and its promoters
– Management competence and experience of team leaders.
– The solidity of the business idea beyond the creation of a token.
– The marketing plan and strategy of the company to sell those ideas.
– The ability to deliver the underlying products to the market.
– The customer base of the products and services that the company will create.
– and basis for projecting market adoption.
What most people did not realize is that the potential for their tokens to increase in value after the ICO depends not so much on anything technical but on the good things that happen in the company raising the funds and the perceived increase. in the valuation of the company as it unfolds its business plan and complies with its commercial products.
Of course, buying cryptocurrencies is not buying shares and not buying securities in any company. We get it, but tokens react the same way stocks react to good or bad news about a company. The only difference is that in the case of cryptocurrencies, the effect is magnified 100 times.
So when a company reaches some financial or business milestone, the price of its token on the exchange will rise … and fall rapidly when nothing good is happening. Therefore, what the company will do and how it will do it after the ICO should be of the utmost importance to anyone who does not want to see the value of their Tokens plummet and stay down forever.
Sure, most tokens would plummet once the tokens hit a crypto exchange after the ICO, due to those wanting immediate profit, but if ever it will rise again to give you the expected multi-digit profits. it will always depend on the criteria. I already described it above. After having bought a token, the value of the ‘crypto advisor and’ technical geniuses’ drops to zero relative to the potential of their tokens to reach the moon.
Following this reality, I believe that a savvy crypto buyer or investor should focus less on how many crypto advisers a project has or how technically sound the team is (unless the company’s underlying business is technical in nature) and focus more on the management, marketing and potential customer base of the company by raising funds through an ICO.
In other words, assign more points on the business and management side of the ICO rather than the technical jargon that will not help your token in the market when the money has been raised.