More than a hundred ICOs take place every day in the world. How not to get lost in the variety of projects? How to distinguish a good project from a soap bubble? How to decide to become an investor?

There is only one answer - to analyze.

We have compiled for you step by step guide which will help with this.

However, we warn you, you carry out the analysis yourself. So, act at your own peril and risk. We do not give a magic formula, we only recommend some areas of analysis, and then be guided by your common sense.

So, let's begin:

Step 1: Get a picture of the business

“If I don’t understand something in a project, then I don’t invest”

Warren Buffett

1. Browse the project website, read the WhitePaper, and try to answer your own question “What exactly are these guys doing?”

Also, don't forget about Telegram, Facebook, Slack, Bitcointalk, Subreddit (if any).

2. Search the Internet for everything you can find about this project. Yes, that's all, Google to the rescue.

3. If you can finally figure out what the company does, try to search Google for other companies that do the same, both in normal (centralized) and decentralized businesses (hint: search on keywords e.g. "digital identity verification")

4. Look at the roadmap and try to understand how long ago the idea arose and at what stage of implementation it is now (hint: if the idea arose two months ago, and now the guys were able to make WhitePaper, then most likely the investment is still very risky. Tip 2: if the project has existed for five years, all this time it has been unsuccessfully looking for investors, and now it suddenly decided to enter the ICO - most likely, the idea is unsuccessful, the project will not be implemented)

5. If you are technically savvy and the project is open source, it makes sense to look at the source code, its progress and comments.

6. If you understand what kind of business is at the heart of the project, try to answer the question from the point of view of common sense: why is there decentralization? Maybe everyone is happy?

7. Is there a network effect? As we know, the cost of a project is proportional to the number of users of this project. Accordingly, if the issuance of a token leads to the creation of an ever-expanding network of users, this is good.

Step 2: ICO Structure

1. Calculate ICO Project Valuation. For this you will need:

a) hard cap value

b) how many percent of the tokens the ICO participants will receive.

For example, if the hard cap of the project is $10 million, and 50% is distributed among the participants during the ICO, then the Project Valuation (and, accordingly, the Market Cap) will be $20 million.

You need to know this in order to roughly understand how cool the project will look against the general background, and how much the founders of the project will potentially earn. After some time, we plan to install MarketCapCalculator on the site, which will take into account more complex cases of token distribution.

2. Can a company issue more tokens after the ICO if it suddenly wants to? What other inflationary factors does the token have?

Step 3: What is the token for?

1. Try to understand what the token is for.

There are usually two options:

• the token is used as a unit for launching or confirming a transaction within the platform
• the token is used as a unit of account when distributing profits from the project between token holders.

All other variations are from the evil one.

2. How does a token acquire value? Again, two options: either from the widespread use of the platform, or from the fact that the project generates a lot of profit.

Step 4: Project team

1. Look up the names of the project members and see if they seem a bit strange to you (hint: be wary of investing in projects led by V Putin, Jesus Crist or SatoshiFavoriteDev)

2. Do team members have Linkedine and/or GitHub pages? Are the pages active, how long ago they were created, how many contacts. Are the team members listed on LinkedIn as working on the project, or are they working somewhere else?

3. List of advisers and investors:

• treat it with a certain amount of skepticism: the work of an adviser can consist of both a one-time ten-minute consultation by phone, and daily work with the team. It’s a little calmer if the adviser’s page on Linkedin says that he works in this project
• in our time, most adversers perform only marketing functions. Try to understand, based on common sense, what benefit a particular advisor can bring to the project. If it is not clear - most likely, this is just a well-known person on the site to give legitimacy to the project

4. Try to understand how long the team has been working together. Have they had previous joint projects, in what areas, were they successful?

Step 5: Risk Analysis

1. Think (in terms of banal logic) what could go wrong with the project. Well, that's just all the worst options.

2. Consider what factors can hurt the “core business” itself:

• Is there a need for the proposed product/service at all?
• What are the likely substitutions for this product/service?
• What is the pressure to request a service/product from consumers?
• what is the dependence of the product / service on suppliers (materials, energy, software, etc.)
• existing competitors and their strength
• risk of new competitors

3. Risks of changes in regulation and legislation for the project and token holders

4. Analyze the project promotion factors: if the main emphasis on the website and other promotion channels is not on the main ideas and advantages of the project, but on how you can earn money on these tokens, it is better to forget about the project.

Step 6: How does the project suit you personally?

If you like the project (analyzed and considered), you need to draw up a plan according to which you will manage your investment. In particular:

• Are you going to sell the tokens immediately after they are listed on the exchange, or is this a long-term investment?
• If you are going to sell tokens faster (for example, you bought them with a good bonus and don’t really believe in their further growth), check how popular the project is before the start of the ICO (according to reviews in social networks and other sources). Of course, don't forget to filter out paid posts. If you think that the project will collect almost all the money in the first days of sales (with maximum bonuses) - you are not the only smart one who wants to sell tokens quickly. But with good skill - why not?
• The smaller the amount of money collected (and the smaller the gap between soft cap and hard cap), the greater the likelihood of a successful ICO (with, accordingly, good popularity, as mentioned above).
• If you are absolutely sure about the project, go to it on the presale. There are fewer risks (if the presale did not raise money, then decent people return everything back), and more bonuses
• Well, do not forget about the currency risks associated with the lock-up period. If it is long, then bitcoin may have time to rise so much that its growth will eat up all the bonuses.
• And, finally, if you are investing “in the long term” - firstly, you need to have iron nerves (the price of a token can fall by 50% in a day, and then rise by 200%), and secondly, have an idea about those events the occurrence of which will pull your token up (listing on a good exchange, signing a cooperation agreement with large corporation and so on). But, in general, long-term investments are for professional investors.

Here, in a nutshell, is the entire guide to self-analysis.

Naturally, we consider projects more closely and in more detail. But we cannot cover everything at once. First of all, we will analyze the most interesting projects that cause the most questions and comments from our readers. So feel free to write!

Follow our blog and ICO reports, and together we will eventually learn, as they say, to separate the wheat from the chaff.

– a platform for launching new ICOs. Today we have a project from the same series - ICOBox. ICOBox intends to provide full support for projects launching ICO campaigns. According to the representatives of the project themselves, they have already launched 10 successful ICOs. Unfortunately, they do not reveal the details, but there is information that the Paragon project may have to the platform.

The purpose of ICOS tokens is to democratize the process of selecting ICO projects in ICOBox. In fact, they provide an opportunity to vote for startups that will subsequently be launched on the ICOBox platform. An important advantage is the ability to exchange ICOS tokens for tokens issued by startups on the platform.

"When new project starts presale, a certain amount of of its tokens is placed on the ICOS platform, where ICOS token holders can exchange their ICOS tokens for tokens of such projects. The more ICOS tokens exchanged by investors, the less ICOS tokens and votes they have left. The exchange rate is fixed at the end of the ICOS sale and does not change from project to project or day to day for any ongoing ICOs. The standard price of an ICOS token is 0.01 BTC. They can be exchanged for tokens of other projects at an average rate of 1:4. In other words, ICOS token holders receive new project tokens at a 75% discount.”

This paragraph presents short-term and long-term implementation options for ICOS tokens. If you think that over time ICOBox will become the leading platform for launching ICOs, you can have some influence on what projects will appear. In addition, you get approximately 75% discount on tokens of any ICO that you may find interesting, but you will not use this opportunity if you do not want to lose votes.

Projects that will receive a passing number of votes will not pay any commission. Thus, these projects will not affect the holders of ICOS tokens in material terms. In a certain sense, the ICOS token enables startups that have good ideas, but those who do not have money, use ICOBox services for free, which can help them at the start.

“ICOBox is a SaaS (software as a service) product where all the common elements of an ICO are standardized and simplified. While project teams are directly involved in the launch of proposals, every aspect of the campaigns is overseen by experts. This format allows you to launch campaigns in the shortest possible time at the lowest cost.”

The ICOBox team consists of market specialists and programmers capable of writing smart contracts, testing and improving them. They help projects get started without any hassle.

“This allows potential ICO projects to run their own campaigns, paying for it with their future tokens, and run them at a high level (PR campaign starts 2 weeks after the application is submitted). ICOS token holders can receive tokens of highly qualified projects, in the selection of which they themselves participate, with a 75% discount. Hundreds of great projects will enter the market, which will be supervised by ICOBox experts, selected by ICOS token holders and implemented as part of ICO campaigns that will be created using new tools and with the support of the ICOBox team.”

If Paragon really was created with the support of ICOBox, then it's safe to say that they work on an all-inclusive basis.

Defining long term prospects For projects like ICOBox, you first need to look at the market in which they are going to work. Now everyone is interested in ICO and everything related to cryptocurrencies. We have already gone through all this. In 2013, when Bitcoin first rose to $1,000, an incredible number of altcoins were created. Some pre-mine and sell such tokens, which are early examples of ICOs. With the advent of the Counterparty and Ethereum platforms, the issuance of tokens was greatly simplified, and companies no longer had to create their own blockchains.

If interest in ICO subsides in the near future, then ICOS tokens will lose their potential value. Do not forget that the real value of the tokens is that you will have the opportunity to profitably receive project tokens that many at that time will not even know about.

ICOS tokens look like a lifeline that the ICOBox team is trying to throw into the ICO industry. They will receive funding from those who want to be able to select projects to promote and access their tokens early on.

The ICO ICOBox itself will be a little non-standard. They are not going to issue a fixed number of tokens and save some for themselves. Instead, they will provide investors with as many tokens as they want to buy. The cost of the ICOS token will be 0.01-0.012 BTC, that is, about $40 at the current rate. For every 100 tokens sold, ICOBox will receive 20 ICOS, which will be used to pay for the project and related services.

ICOS tokens can be bought with BTC, ETH, LTC, DASH, Zcash and USD. This means that investments will not go through a smart contract, which often results in problems with receiving purchased tokens. In addition, such an ICO will not be completely transparent. In other words, you fully rely on the word of honor of the ICOBox team by participating in their ICO.

In the short term, while ICOs are at their peak, ICOS tokens can become a powerful investment vehicle. Investors will have an advantage over traders who will be able to buy tokens only on open market. However, such traders can always unite and refuse to buy tokens at too high a price.

Thus, for short-term traders active in the ICO space, this is a very good project. The chances of making money are great. For long-term investors or amateurs who are interested in ICO from time to time, this project may not be suitable. The project is built on the ICO fever, and it remains to be seen what will happen when it comes to naught.

• 1 How to evaluate a startup: why 3 standard approaches do not work?
• 2 How to evaluate ICO and other startups: 7 factors
• 3 Why it is profitable to invest in ICO startups
• 4 Main Methods for Evaluating a Startup
• 5 Recovery (expensive)
• 6 The Berkus method for evaluating startups
• 7 Methods for estimating the rate of return through forward value and terminal value
• 8 Methods for evaluating a business start-up by cost or profitability of a client
• 9 Method for assessing the prospective value calculated using multiplier coefficients: P/S, P/B, P/E
• 10 Model Ave Maria
• 11 How to Use Investor Sense, or the “Finger to the Sky” Method
• 12 Conclusions: how to evaluate an ICO

The popular word "startup" means new business project, which distinguishes innovative idea. However, the last part of the definition is often discarded, and any new company that creates products or services.

One of the most popular types of startups today is ICO. Typically, the activities of companies entering the ICO are associated with the use of blockchain technology, but the area can be any - banking, computer games, medicine, etc. To raise funds, such companies issue digital tokens, which are sold to investors in exchange for their investments. As a rule, after the release of the product on the market, tokens begin to be traded on the exchange, and in the event of a successful launch of a startup, their value can soar hundreds of times.

The key issue for any startup is the assessment of its prospects, because most projects operate in conditions of uncertainty. And the more innovative the project is, the more questions arise from potential investors, and it is important for the author of a startup to soberly assess its prospects. Let's see how to evaluate the investment attractiveness of a startup.

How to evaluate a startup: why 3 standard approaches do not work?

There are traditional methods for evaluating a company or business. Typically, one of these approaches is used:

• market approach - the value is estimated in comparison with other similar companies that have recently been sold (their value is determined by the sale price)
• income approach - it is based on the calculation of the expected income from the business
• asset-based approach. In this approach, the value of the business = the value of assets minus the value of debts (liabilities)

But none of these standard methods can be applied to startups and ICO projects, because they have one very significant difference from a long time ago. operating business. The essence of this difference is that the profitability of an ordinary business has already been determined and can be estimated, while the profitability of any undertaking is a very unpredictable phenomenon. In the first case, the already achieved profitability is estimated, and in the second - only its prospects.

The task of any investor - and if possible - is to minimize risks. Given that investing in startups is always associated with a high degree of risk, it is obvious that the return should be higher than usual. The usual return is about 10%, which is given by bank deposits and other absolutely or conditionally risk-free investments.

An increase in return always entails increased risk, but the relationship between return and risk cannot be called linear. This attracts investors who want to find a project with moderate risk and high return. The average success statistics of start-up business projects is 10%, the risk premium is 30%, and the project’s time to reach the desired level of profitability usually ranges from several months (for ICO) to 3 years. Based on this, we obtain the desired yield - from 200% per annum and above.

Is it realistic to get such profitability by investing in ICO startups? More than! VC Mangrove Capital recently evaluated 200 ICOs (both successful and unsuccessful) and deduced the average yield on these projects - 1320%. Even if you just invest in different projects without analyzing them, taking into account the possible failure of some startups, it is quite possible to get a return of over 1000% due to the fact that the tokens of successful projects will “fly up” hundreds of times in price.

How to evaluate ICO and other startups: 7 factors

An investor, when deciding to participate in a startup, evaluates it according to the following parameters:

How much the product is in demand for the target audience.

1. Availability of a finished product (analysis of the current stage at which the startup is)
2. Project risk analysis.
3. Ability to control the progress of the project
4. Expected rate of return
5. Team analysis (do they have successful launches behind them)
6. Analysis of the market niche this project belongs to (it is best to invest in a growing market)

It is necessary to carefully analyze each of these parameters and answer all questions honestly in order for the project evaluation to be objective. More important is the stage at which the startup is. A “brilliant idea” by itself is worth little – it all depends on how it will be implemented.

Why is it profitable to invest in ICO startups

Since 2017, ICO projects have become one of the main trends in the financial market; they attract several billion dollars annually.

ICOs are risky projects, but the level of risk can be reduced if a competent analysis of the project is carried out. There is no “secret secret” to the popularity of ICO projects: investors are always attracted by the possibility of making super profits. Many projects entering the ICO offer truly revolutionary products in various fields: medicine, media, computer games, bank cards. Many projects already have a promising product, but they are raising money for its promotion and business scaling. Not surprisingly, over time, their tokens increase in value (as the value of shares of successful companies increases).

Let's see how to correctly evaluate ICOs and other startups so as not to get into trouble.

The main methods for evaluating a startup

It is believed that to analyze the potential of a startup in the first place should business expert. What methods can be used for this?

Recovery (expensive)

This method estimates only the financial costs of creating a similar product on the market, and specifically

• the cost of labor of specialists involved in the project;
• costs for patenting and other formalities;
• project assets and funds;
• marketing, advertising and other expenses.

As a rule, the evaluation of a startup based on this method is underestimated. If an investor wants to bargain, then it is profitable for him. Such an assessment does not take into account the growth of the project's potential, which can "shoot". But the recovery method allows you to determine how efficiently the funds are spent on launching and promoting the project.

It is hardly reasonable to use this method for evaluating ICO, because key indicator for these projects is the potential of the product, the possibility of realizing this potential and the analysis of the sales market, and the recovery method does not take into account these factors.

The Berkus method for evaluating startups

This valuation method has existed since 2001. It is based on the restoration method, but some additional factors and allowances are applied to it, for example

• For a promising idea - from 20% to 40%
• For project management (if it is professional) - from 20% to 80%
• For a unique position in the market - from 10% to 20%
• For the presence of a realized prototype (it reduces technological risks) - from 20% to 40%
• For CashFlow (cash flow) - from 20% to 40%

Sometimes allowances according to this method are estimated not in relative, but in absolute terms, in other words, in money.

This method is considered empirical, that is, largely subjective. But it can be used to evaluate ICO projects.

Bill Payne's method (aka the scoring, benchmarking method)

The author of this method was Bill Payne, a well-known investment "angel".
At its core, the method is similar to the Berkus method, but is more tied to specific conditions. Used to evaluate companies at the stage of development (before receiving the first income)

The analyzed company is compared with other startups in two stages.

First stage. First, the average valuation of the company (in this niche and in this region) is determined. True, in the conditions of Russia, such data are not publicly available, but if you wish, you can find them.

Second phase. Application of the scoring method, that is, a comparison of the acquired company with averaged data and taking into account coefficients that also affect the cost of the assessment:

• Strong team, management and management: + up to 30%
• Estimated market size: up to + 25%
• Novelty of technology/product: up to + 15%
• Competitor analysis: up to + 10%
• Evaluation of marketing, partners and sales channels: up to + 10%
• Do you need additional investments: up to + 5%
• Other factors: up to + 5%

It may seem surprising that product and technology novelty ranks lower than team and market importance. But do not forget that in any business, the quality of the team plays a decisive role and usually becomes the key to success. As far as the market is concerned, the possibility of increasing sales in the future is very important for generating income from a startup.

Thus, if a company is valued at $1 million, but it scores another 15% on additional parameters and coefficients, its valuation is $1.15 million.

The key factor here is an accurate and objective understanding of the average valuation of peers in your area.

As for the ICO, this method can be used for valuation and can be quite accurate if all additional coefficients are correctly estimated. It is from them that it largely depends on how much the company’s digital tokens will soar in price.

Methods for estimating the rate of return through forward value and terminal value

There are two valuation methods - through the calculation of the future value (forward value) and the final cost (terminal value).

Estimating the future value of investments (forward value)

According to this method, the value of the investment after a few years can be calculated using the following formula:
Present value of investment*(1+target rate of return)*number of years

For example, with a 40% annual rate of return and an investment period of 2 years, the cost of a $100,000 investment when an investor exits the project will be $100,000 x (1 + 0.40) * 2 = $280,000

The most difficult thing is to correctly calculate the objective annual rate of return.

Estimation of the final cost of investments (terminal value)

The easiest way is to simply look at a similar company (competitors) and substitute the necessary indicators (sales volume, number of clients) into the calculation formula to calculate the value of a startup at the moment when the investor plans to withdraw his funds.
Both of these calculation options evaluate, first of all, the effectiveness of investments, and not the cost of the project itself, but for an investor this is of paramount importance.

For the evaluation of ICO projects, this method is less suitable than the Berkus method. Although if the project has a competent and reasonable business plan that allows you to accurately predict the indicators needed for calculations, it can also be used.

Methods for evaluating a business startup by cost or profitability of a client

This method is suitable for valuing companies where the notional “value” of each customer is more or less constant, where there is not much variation. Examples are operators mobile communications- data on subscriber spending is quite available, so it is quite easy to estimate the future value: for this, the estimated number of customers must be multiplied by the average cost of a check from each of them. True, and here it is necessary to take into account possible risks.
This method is considered one of the most accurate. It is based on a standard profitability assessment, which includes:

• average profit per client
• assessment and calculation of the number of customers by a certain moment

Example: Average income from each client equals $ 8 / year. The cost for attracting a client is $3. If advertising budget is $ 100,000, for this money you can attract 33,000 customers. Based on this, the income from the project for the year is $ 264,000 / year, and its cost after 365 days can be estimated at $ 792,000 (which is equal to the profitability of the project for three years)

Both of these methods can be used if the project allows you to accurately determine the number of customers and the “average check”.

Method for estimating the prospective value calculated using multiplier coefficients: P/S, P/B, P/E

The most popular calculation option is based on the P/S ratio (the ratio of capitalization to revenue), multiplied by 2-4 times.

The resulting indicator is compared with the multiples of companies that are traded on the stock exchange.

This method is not suitable for evaluating ICO projects, because it is not used in the early stages of a startup launch.

Model Ave Maria

Model Ave Maria (the name is a slightly distorted abbreviation English words) was invented by M. Krainov.
Project evaluation is carried out according to the following parameters:

• Acquisition - new clients. Assessment and characteristics of the audience, how many people, what channels are used to attract them.
• Value (although Cost is more precise here). The average, as well as the maximum possible cost of attracting customers, and the factors influencing it.
• Engagement - how the client is involved in the project. Preferred actions for each user, interaction of clients among themselves.
• Monetization - how should clients bring profit to the project and at what point?
• Retention is the answer to the question of how to turn a client into a permanent one, how to “twist” one-time sales to regular ones.
• LCV is the total amount of money that the client will bring to the project.
• Intellectual Property - measures to protect your idea from copying and theft.

Using this model, it is convenient for an investor to compare several projects and choose best project for investment. It can be used for ICO if you select two or more similar (similar) ICO projects, for example, for a project for issuing debit cryptocurrency cards. A competent analysis will help to find out whose tokens will be more promising.

How to Use the Investor's Intuition, or the “Finger to the Sky” Method

Experienced investors with a good nose for profitable investments can make decisions about investing in a startup based solely on their intuition.

The method is completely unscientific, but for the “guru” it nevertheless works. True, it is important not to overestimate your capabilities here. Investors with experience really have a nose for profitable startups and can determine which tokens will make them millionaires.

Conclusions: how to evaluate an ICO

Let's summarize how to analyze the prospects of an ICO startup.

• To assess the current cost of an ICO project(for example, based on the funds invested in it, or based on similar companies in the market - if such already exist) and objectively analyze the 7 key factors that affect the success of the product in the market. This can be done using the Berkus method or the Bill Payne method. Thus, by applying correction factors, you will predict the cost of the project in a few months or years, when the product is already on the market. When the value of a project grows in price, its tokens also rise in price.
• To assess the future and final cost of an ICO project investments, you can use the evaluation methods through the terminal value and forward value. This method is suitable for an ICO that has a clear and well-founded business plan with all the necessary indicators, such as the rate of return.
• If the price of the product and the number of customers are known, you can apply the calculation method for profitability and customer value.
• To compare two similar ICOs and choose the most promising of them, the Ave Maria method will do.

None of the above methods makes it possible to 100% objectively evaluate the capabilities of a startup. It happens that experienced investors “get into a puddle”, but their difference from beginners is that investors never put all their eggs in one basket (in other words, they don’t buy tokens of only one ICO project), and income from profitable investments usually significantly offset losses from failures.

• It is expected that in March 2018 the number of ICOs will decrease significantly.
• Regulation of ICOs in the US remains controversial, with a number of projects currently under investigation.
• ICOs are losing their appeal due to the growing number of fraudulent offers.
• Increasing the level of control may cause a new wave of ICO popularity.

Last week I attended one of the biggest events in the world of digital assets - Token2049 in Hong Kong. Enthusiasts of the world of digital currencies from all over Asia, as well as from other parts of the world, came to discuss digital assets and blockchain technology. In addition, much attention was paid to the ICO mechanism - an analogue of an IPO held on the stock markets. To say that the number of people discussing ICOs was overwhelming is an understatement.

According to a report compiled by FabricVentures and TokenData based on their data, over $5.6 billion in funding was raised in 2017. “This figure should be compared to the $1 billion of ‘traditional’ venture capital investment in blockchain startups over the same period and the $240 million generated by the token sale in 2016,” the report said.

Source: Fabric Ventures / TokenData

ICOs raise billions of dollars by selling digital assets. But in Lately these still unregulated projects have come under intense scrutiny. On Saturday, March 17, at the MIT-sponsored exhibition, " bitcoin Expo”, one of the speakers, Christian Catalini, stated: “Currently, 40%-50% of the tokens of the conducted ICOs are trading below the initial offer price.”

According to news.Bitcoin.com, while huge sums are being raised through ICOs, statistics from 2018 show that of the 74 offerings completed to date, about 76% will be at a loss. Why do so many ICOs lead to losses or worse, fail? Some see the reason in the negative dynamics of the leading digital currencies: bitcoin And .

However, less popular currencies such as EOS(which has grown by almost 40% in the last seven days) and Cardano(which added about 12% over the same period) demonstrate that there is still momentum for growth in the cryptocurrency market.

US regulatory action

While U.S. ICO regulation remains weak and obscure, the Securities and Exchange Commission (SEC) is currently doing dozens of studies on the digital asset space. As of March 15, the agency has reportedly issued subpoenas to "dozens" of firms that it believes may be violating laws on securities through their participation in the ICO. Indeed, reports note that recent SEC investigations resulted in asset freezes that blocked the completion of some ICOs and forced the suspension of trading in tokens already on the market.

The Wall Street Journal reported that the number of ICOs this March will be the lowest since last August. More than 180 placements are expected in March (data from Token Report). This number is higher than January's 175, but lower than February's 197 offers. Only $795 million is expected to be raised in March, down 45% from February's $1.44 billion.

What is the reason for such a decline? Yoav Keren, CEO BrandShield in New York believes that one of the main reasons ICOs are now facing is the result of phishing scams and online scams, which are increasingly becoming a risk factor for the industry, combined with lagging regulation this area.

“Cryptocurrency companies face numerous threats at all stages of their life cycle. During the ICO process (which is not protected from phishing), investors and companies risk losing significant funds, which are transferred by scammers to phishing sites. In the course of daily activities, token holders risk losing them from various fraudulent activities.

This market in particular is vulnerable to risk, as big money and lack of control attract scammers and little attention is paid to security. In the end, every fraud incident has a ripple effect and reduces the credibility of the market as a whole.”

Data aboutICOtransparent and widely available

Chapter research department CoinDesk Nolan Bauerle takes a slightly different approach. He believes that ICOs offer investors the opportunity to invest in innovation by helping to fund companies in their early stages.

He came to the conclusion that the fact that we can measure their success in terms of funds raised and return on investment for such short time, is the result of their transparency and proof of innovation. According to Bauerle, the recession is just a temporary glitch. In his opinion, the ratio of successes and failures in the altcoin market is, in fact, better than in the traditional market.

Bauerle also notes that when VCs took over in the early stages of funding, the transparency we now see in ICOs was not available.

“The number of people who could ask a question about both fundraising and early return of capital was limited to a small group of venture capitalists who were the first to hear about new opportunities. It was a narrow circle of traditional investors.

Because the data onICOare now public and transparent, there are many new contributors and opportunities for scrutiny. All of this suggests that the success-to-failure ratio of ICOs will be similar to that of VCs, with the main difference being transparency and the ability to openly measure this in live markets with millions of buyers and sellers.

It is worth remembering that VCs agree that 90% of their portfolio is doomed to failure, which is much higher than the 40-50% of failed ICOs.”

The value of the tokens should not be confused with the value of the entire project, emphasizes Moshe Joshua, director of development for Blackmoon Crypto. He believes that there is insufficient provision of data on the supply side. In addition, many investors in the field of digital currencies easily succumb to panic and fear of being left behind. This leads to the spread of misinformation instead of accurate data and increased volatility.

“This is a common mistake in most cases. Price volatility can be attributed to the lack of a standard protocol when it comes to analyzing investment tactics.

To be more specific, there is a lack of supply-side research at the moment, meaning that current cryptocurrency exchanges are flooded with inexperienced investors making rash decisions too easily, which act as a catalyst for volatility as a result. So, in conclusion, in most cases, the cost of tokens should not be considered a metric for the success or failure of the entire project.”

ICO activity in March could really slow down. However, the general consensus seems to be that it is too early to say that ICOs are a thing of the past. Rather, the introduction of additional regulation, combined with current or even greater transparency, could spark a new wave of ICOs.

The Auctus project, built on the Ethereum blockchain, was founded with the aim of improving the pension market by increasing transparency and eliminating problems such as corporate governance, corruption, fraud, bribery and bureaucracy, as well as lower operating costs.

In essence, the Auctus smart contract and system based can replace the entire structure of pension fund management.

PRODUCT

According to the company's website, the project was based in Brazil in Belo Horizonte, where some of the management and developers are located, but the Auctus administration is located in Zurich, Switzerland. No other information about where the company is registered was found.

The project is under active development. On Github, you can find and familiarize yourself with the code of a smart contract, a demo version of a platform for managing pension funds, and much more.

When it comes to competition in the market pension funds, then you can mention a project called , but he did not move beyond the idea. Given the increasing news in the media that this or that bank wants to test blockchain technology in relation to pension funds, it is safe to say that there will be fierce competition in the future, but so far the Auctus project is seen at the forefront ( , ).

The project is covered in a discreet manner without spam and water, which gives it a seriousness, and this is quite in line with the area Auctus is going to work in. Official pages are presented on the following resources: (3262 readers), (42 readers), (704 readers), (1906 members), (1262 subscribers), . Some of the articles about the project on third-party resources:,. There are also articles on

In addition, judging by the successful one, which was closed in 10 hours and 56 minutes, having collected 958.9 ETH, which is about $300,000, and because the topic of pension savings is relevant for so many of us, community interest in this project is quite high as investors and potential users of the platform.

USE OF BLOCKCHAIN

Thanks to the blockchain, the platform offers the following advantages over existing systems:

• The best corporate governance. Governance is enhanced by the transparency of smart contracts.
• Automated collection of contributions and pension payments. Paying deposits or withdrawing funds becomes much easier because all mechanisms are defined in smart contracts and can be automated.
• Cost transparency. All fees will be automatically deducted from transactions. The value of these fees is determined publicly in smart contracts, and each fee is permanently recorded on the blockchain.
• Fraud protection. Fraud related to payment terms and theft of funds can be eliminated once all transactions are recorded on the blockchain.
• Control of insurance premiums. Using smart contracts registered on the blockchain, anyone can know exactly the nuances of insurance payments.
• Economical data management. The technology can significantly reduce the cost of servers, storage, and maintenance personnel.

WhitePaper states that “Regardless of the monetization scenario, all commissions will be paid in Auctus Tokens (AUC) only, making it an integral part of the platform. There are no details in response to the question “How exactly will this work?”. However, comments were received from one of the team members () - "we have a project with detailed description token in the ecosystem and in the coming days, after consulting with advisors, we will release our token usage model. will be required to access services, tools and other features."

The Auctus project plans to become a global blockchain platform for pension funds, designed to adapt to various legal and regulatory standards. From the point of view of the functionality of smart contracts, there are no contradictions here and it sounds quite feasible, although there may and most likely be difficulties with the legislation.

Legal requirements and restrictions for pension funds vary by country. Therefore, initially Auctus plans to work on the development of smart contracts for existing funds. Thus, each fund will be responsible for checking the legal requirements.

WHITE PAPER

White Paper is presented on 30 pages. Reading the document does not make it difficult to understand the material presented. The document describes general principles platform operation, problems and solutions of the pension funds market.

There is a significant gap in the logical and consistent description of the idea about the participation of the token in the ecosystem. Plus the absence of any explanations on legal issues.

ROAD MAP

A clear sequential plan of action with a simple and understandable logic.

The development plan and some other factors (gradual unfreezing of tokens after, etc.) indicate that the company is not striving to get short-term benefits, but is trying to create a project for many decades to come.

TEAM

The project is led by Felipe has over 12 years of experience in development software. He has over seven years of experience as an Operations Manager and DTI Digital Partner.

The team consists of 11 people and consists mostly of experienced software developers with a rich track record. Strange is the fact that, according to information from WhitePaper, the chief programmer responsible for developments related to the blockchain cannot confirm professional skills and, in general, at least some relation to the project.

Advisory support is provided by experts in finance, pension law and analytics.

ICO DETAILS

The pre-ICO started on October 3, 2017 and was closed in 10 hours 56 minutes, having collected 958.9 ETH, which is about $300,000. The price of the token was 2500 AUC for 1 ETH.

The main phase of the ICO will begin on November 14, 2017 and will last until November 28, 2017. If the maximum fundraising goal, which is 90,000 ETH (about $27,000,000), is reached earlier, then the ICO will close ahead of schedule. The price of the token will be 2000 AUC for 1 ETH. The minimum fundraising goal is 15,000 ETH.

The smart contract address will be shown a few days before the ICO.

Distribution of tokens

• Auctus core team (20%)
• ICO participants (51%)
• Reserve for future stakeholders (18%)
• Partnerships and consultations (9%)
• Bounty program (2%)

Despite the fact that the project team receives 20% of the total number of tokens, and for some reason their number is not indicated, the project decided to act in a very attractive way for investors - all funds raised will be blocked during the ICO period. At the end of the ICO period, the contract will allow you to withdraw 20% in the first month and 5% in the next 16 months.