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How to Avoid ICO Scams

2 weeks ago


ICOs are the IPOs of the future! Investment vehicles of the future, as ICO gives out much more intrinsic value in the form of a simple store of value or a token.


Over the years, the scenario has changed rather more drastically and has had an adverse effect on the community as a whole, millions of dollars have been stolen by luring in inexperienced investors with promises of the next bitcoin or the next biggest boom in cryptocurrencies.


As a general rule of thumb, we advise reading the whitepaper, roadmap and the tokenomics thoroughly before doing an investment of size. Although, with time our team has been proven wrong as there are many more factors at play when trying to detect and avoid a harmful ICO.


We will list down the factors below:

Use case

There is no use case or classification identified for the token or cryptocurrency or token within the whitepaper and roadmap of the project.

Github

The github of the project is empty and has no repository or any kind of open source code raises some red flags regarding the capability of the development team delivering any of the promises made on the whitepaper.

Plagiarism

In most cases, the whitepaper of a ICO does not contain any original content and is simply copy/paste of the written articles or use cases in research papers and do not have any reliable links to back-study from.

Tokenomics

The tokenomics of the ICO will not be able to hold up the justification of the allocation of the tokens, case in point, 1 million of the 10 million total token supply is unaccounted for and is not distributed.

Team

Teams should be an integral part to represent, but if a scammer was to put a team, they would enable different personas with different names and obvious avatars to giveaway their legitness but a few reverse google image searches will tell the truth.

Profits and Tiering

This is a dead giveaway of a PONZI or MLM scheme. Profits upon a certain number of friends or token invested upon will be shown to have profits in a longer term but is absolute hypocrisy.


We hope you liked this guide, please let us know if we forgot something worth mentioning here! Stay tuned for more!