ICO Token Valuation and the Misplaced Emphasis on Blockchain Technical Experts and ICO Advisors

The statistics could no longer be ignored. Most ICOs are closed and remain closed, once the tokens hit the crypto exchanges, after the frenzy and “FOMO” that attends the crowdsale is over.

Most observers who track the ICO phenomenon universally agree that the trend in recent months has been for ICOs to lose value after the crowdsale, with many buyers waiting in vain for the “moon” they were promised , once the cryptocurrency hits an exchange. portal

What is not being discussed, however, is the main reason why we are witnessing this phenomenon, and what the participants in a crowdsale, including the rating companies that most of us trust to choose, have to be doing wrong when choosing which ICO has more value. or has the best chance of increasing in value after the crowdsale is complete.

While there are many reasons that could legitimately be proposed for the phenomenon, there is one fact that I think is probably more responsible for it than most other conflicting reasons: the valuation of the ICO token and the emphasis wrong on “blockchain experts”, “ICO advisors”. ‘ or ‘technical whizkids’ for erc20 tokens.

I’ve always thought that the need for technical blockchain experts or ICO technical advisors is overblown, or even completely misguided, when a project is judged by these criteria, unless the project is actually trying to create a currency concept new For most ERC20 tokens and copy coins, the real important consideration should be the business plan behind the token and the management background and executive profiles of the team leaders.

As anyone involved in the industry should know, creating an ERC20 token from Ethereum, or similar tokens from other cryptocurrencies, does not require any great technical skills or require any overrated blockchain advisors (in fact, with a new software available, an ERC20 Token can be made in less than 10 minutes by a complete technical novice.

So technique shouldn’t be a big problem for chips anymore). The key should be the business plan; level of business experience; competence of the project leaders and the business marketing strategy of the main company raising the funds.

Frankly, as a lawyer and business consultant of over 30 years in various companies globally, I cannot understand why people are still looking to some Russian, Korean or Chinese “Crypto Whiz” or “Crypto Advisor” to determine the strength of an ICO. so it’s 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 hype. In an age where there is an abundance of token-building software, platforms, and standalones, the disproportionate focus on the blockchain experience or technical ability of promoters is mostly misplaced. It’s like trying to gauge the likely success of a company based on the ability of its staff to create a good website or app. That train left the station a long time ago with the proliferation of technical hands at stand-alone sites like Guru; Upwork, Freelance and even Fiverr.

People seemed too caught up in the hype and technical qualifications of people promoting an ICO, particularly ERC20 Ethereum based tokens and then wondering why a technically superior Russian, Chinese or Korean guy can’t deliver the business end 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 experience, how many crypto advisors they have, and the successful ICO experience they have on their team, rather than to focus on the underlying business model for will be created with the funds raised

Once it is understood that over 90% of the cryptos and ICOs out there are simply tokens created to crowdfund an idea, and not just a token for a token, people’s emphasis it will pass from the technical angles to the most relevant assessment 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 assess the future prospects or value of our tokens based on sound business considerations such as:

– SWOT analysis of the company and its promoters

– Managerial competence and experience of team leaders

– The solidity of the business idea beyond the creation of a token

– The marketing plan and the company’s strategy to sell these ideas

– The ability to deliver the underlying products to the market

– The customer base of the products and services to be created by the company

– and basis for projecting market adoption

What most people didn’t realize is that the potential for their tokens to increase in value after the ICO doesn’t depend so much on anything technical, but on the good things that happen to the company raising the funds and of the perceived increase in the company’s valuation. deploy your business plan and offer your business products.

Of course, buying cryptocurrency is not buying stock, and it is not buying security in any company. We get it, but stocks react the same way stocks react to good or bad news about a company. The only difference is that in the case of cryptos, the effect is magnified 100 times.

So, when a company meets some financial or business milestone, the price of its token on the exchange will go up… and quickly go down when nothing good happens. So what and how the company will do after the ICO should be of utmost importance to anyone who doesn’t want to see the value of their tokens plummet and stay forever.

Of course, most tokens would plummet once the tokens hit a crypto exchange after the ICO due to those looking for immediate profits, but if ever it would spike back up to give you the benefits of expected multiple digits will always depend on the criteria. I already explained above. After you have bought a token, the value of “crypto advisors and “technical wizkids” becomes zero relative to the potential of your tokens on the moon.

Following this reality, I believe that a smart crypto buyer or investor should focus less on how many crypto advisors a project has or the technical quality of the team (unless the company’s underlying business is in the nature of technical) and focus more on management, marketing and potential customer base of the company by raising funds through an ICO.

In other words, allocate more points to the business and management side of the ICO rather than the technical jargon that won’t help your token in the market once the money has been raised!