5 Deadly Sins of ICO That Screams Scam and Make Investors Run Away
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After the internet, the cryptocurrency and blockchain technology is here to rule the whole world. However, releasing a successful ICO to the market is not as easy as it seems. People are doing more research nowadays and getting smarter than earlier. They know about all the schemes, scams and con artists behind all projects. Moreover, people are sharing such information too. This is making it difficult for new ICO projects to achieve even Pre-ICO success. Thus, if you are thinking about aiding any crypto-tech startup, you must be cautious.
Almost half of the 2017’s cryptocurrency ICO projects have died. Also, Bitcoin.com found that nearly 113 projects “semi-failed” as their teams had lost touch with their communities. Well, such stats will definitely make investors scared. So, how can you increase your chances of ICO success in today’s tough global marketplaces? Let’s take a look at a list of the top deadly sins of ICO that you must avoid so that you don't scare away contributors.
1. Sloth: Ignorance of the Importance of Online Web Presence
Today, your online presence is the most important thing to care for. This is because potential token buyers will check if you are engaged with the online community and committed to your ICO. Besides, the internet is an invaluable tool for spreading information about ICOs and connect with buyers. Thus, to ensure your online presence and not scare away your contributors, one must take note of the following:
· Ensure that your website is well-constructed. It must be easy to follow and have no errors.
· You should post all important updates and information across various channels like Telegram, Medium, Reddit etc. to reach the maximum number of buyers. This will help to build hype around your ICO before its release date.
· Beware of anyone who may be pretending to represent your company. There are a number of scammers on the blockchain. So, always be vigilant about anyone suspicious so that you can be sure of those who are safe and secure contributing to your ICO.
2. Pride: Unable to Identify Market Needs and Propose Feasible Solutions
A complete market analysis of the market is vital for determining its various advantageous points and drawbacks. Only then will you be able to propose unique and innovative solutions.
Besides, minimalism in market analysis has given rise to a new problem. This issue is mainly related to the imperfect identification of the key problem areas. Thus, you must take your time to describe the market in a precise manner. Your project should not only be possible for innovation but also viable to work on. In fact, most of the project proposals today have interesting concepts but are out of touch with reality.
3. Wrath: Not Understanding Blockchain
Well, blockchain technology is all about paradigms. But, this is what most of the ICO whitepaper writers and founders don’t realise. Indeed, the blockchain technology removes the borders of progress which is evident from token economics to the way of thinking. That is why it is important to use blockchain in the right way.
Moreover, blockchain is not a necessity for the disruption of any existing industry today. It actually goes way beyond the existing idea of a business. Also, if you have an ICO whitepaper, it will definitely make more sense if you change the word “blockchain” into “database”. Though it justifies the use of technology, it also portrays a negative image that one doesn’t have a good understanding of this technology. Besides, it is necessary to analyse token economics too. This is because the image of a poorly designed ecosystem gives negative feedback and is a sign of weak projects.
Altogether, your white papers must portray blockchain technology as something that can empower business processes. It should never make an impression and that it is just a way to make money.
4. Gluttony: Too Much Usage of Crypto-jargon
Most of the white papers are a bunch of buzzwords and false expectations for future token holders. But, this is actually a huge trap. Moreover, you must explain your project via the ICO whitepaper clearly and simply.
Besides, when a project is in simple words and terms, a good project remains good. But, a bad project remains bad as its marketing terminology will be gibberish and poor. So, the only solution is to keep it simple.
Also, the choice of words is important legally-wise. They can change the qualification of tokens from utility to security. Further, it is never a good idea to talk about token price growth and promises of returns (high returns, outstanding returns, etc) openly.
5. Lust: Sacrificing on the Structure of ICO Whitepaper
A whitepaper is the first point of connection for potential token buyers. You must structure the flow of your ICO whitepaper well. Besides, an unclear and structure-less document with irrelevant information is difficult to read and scares away contributors. So, keep in mind the following things:
· Use a classical structure. This follows the style where the problems of the industry are emphasized (market overview, pain points) before. Besides, the presentation of the solution follows this with the proposal by the startup. Also, you must present an in-depth analysis of the competitors. This is vital before you explain why your project is different and more valuable from others.