There are numerous number of ICOs, which investors can invest. This year, ICO ecosystem raised over 7 billion dollars, according to ICOdata.io. This is a milestone in crypto ventures. This year, total number of ICOs is 1131. This fact makes choice very difficult. This article will teach you how to spot scam ICO. Here are ten red flags for ICO project.
Understanding Hard Cap and No Cap
From a initial stage for one ICO, when they are introducing, team will choose between Open Cap and Hard Cap. Open Cap is allow to send amount to ICO without limits while ICO with Hard Cap have a limit on fund which they can raised. Projects with Open Cap are considering a BIG red flag.
Open Source project with no repository
Most of ICOs projects are based on Blockchain technology. They have one common thing- they are all open source projects. Legit projects upload code base to Github or another repositories. They do this, because people with blockchain programming experience can validate project. Of course this is a problem for ICO investors with no programming experience. However, ICOs project with no existence Github or empty repository is definitely red flag.
Anonymous or fake team
Finding out about relaying information to a project’s team is probably one of more important step. ICO bakers can find out information about a team in social media as Instagram, Twitter, Facebook, LinkedIn or another reliable press source. In case, If project’s team have no profiles or clear development name, this is a red flag.
Website and Whitepaper
Incomplete website or whitepaper should invoke serious doubt in the mind of backer. This is another red flag and it is recommended to avoid this projects.
A roadmap is “document” which ICO project can list their development and funding goals. ICO backers can see their clear timeline. ICOs with not clear roadmap can indicate that development team have short term ( only financial gains) in their mind. ICO with not clear roadmap is definitely red flag.
The supply and distribution token structure can used to check team’s intention. A premine tokens is a portion for development team. Usually premined tokens are reward for project’s team. Hifh3 premined percentage supplied is red flag.
Non blockchain used case
In cryptospace,not all projects utilize blockchain technology to become decentralized. You can check easy, when you ask yourself “Do we need blockchain for this industry?” If the answer is “no”, this is a red flag.
The major requirement is transparency. You can check another crypto related forums or website for information. Major factors to validate one ICO project are backers number, discussion topic and atmosphere in community. If one of this factors is suspicions, this is definitely red flag.
Always check websites and whitepapers for plagiarism. Any indicate for plagiarism is BIG red flag. Many ICOs copied a content from another companies without permission. ICO investors can avoid projects with copied elements as logo, text and another. You must check ICO’s content for plagiarism. You can spot plagiarism whitepaper with CopyScape tools.
This is a list with useful tools. You can prevent scam easy with this tools. Let’s start:
Dublichecker-This tool will help you with searching for simillar photo in Web.
ImgOps – ImgOps is tool for searching images in Bing, Google, Yahoo, Yandex and more.
Reserve Image Search – Tool for searching similar photo in Web.