ICO Token Valuation and Undue Emphasis on Blockchain Technical Experts and ICO Consultants

Statistics could no longer be ignored. Most ICOs take off and stay in the tank once the tokens hit the crypto exchanges, after the frenzy and “FOMO” of participating in the crowd sale is over.

Most observers who follow the ICO phenomenon universally agree that the trend of the last few months is that ICOs lose their value after the crowdsale, when many buyers wait in vain for their promised “moon”. , when the cryptocurrency appears on the exchange. portal.

What is not discussed, however, is the main reason why we are witnessing this phenomenon, and what crowdsellers, including the rating companies many of us rely on to make our choices, must be doing wrong: choosing which ICO is most valuable. or has the highest probability that the price increase will be completed after the crowdsale ends.

While there are many reasons that can legitimately be offered for this phenomenon, there is one fact that I believe is probably more responsible for it than the other debatable reasons. or “techniques” for erc20 tokens.

I’ve always thought that the need for blockchain technical experts or ICO technical advisors is overkill or even completely irrelevant when judging a project by those criteria, unless the project is actually trying to create a completely new coin concept. The real important consideration for most ERC20 Tokens and copy coins should be the business plan behind the token and the managerial backgrounds and executive profiles of the team leaders.

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

So technical shouldn’t even be a big deal for tokens anymore). The key should be the business plan. level of business experience; the competence of the project managers and the business marketing strategy of the main fund raising company.

Frankly, as a lawyer and business consultant for more than 30 years in various companies around the world, I cannot understand why people continue to look for a Russian or Korean or Chinese “Crypto Whiz” or “Crypto Advisor” to determine the strength of an ICO. for what is basically a BUSINESS SENSE crowdfunding campaign…

I’m convinced that this is one of the main reasons why most ICOs never live up to their pre-launch hype. In an era where there is an abundance of token generation software, platforms, and freelancers, the disproportionate focus on blockchain experience or the technical ability of promoters is largely irrelevant. It’s like judging a company’s likely success based on its staff’s ability to create a good website or app. That train has long since left the station due to the proliferation of technical hands on freelancing sites like Guru; Upwork, freelancer and even Fiverr.

People seemed to get too carried away with the hype and technical qualifications of people promoting ICOs, particularly ERC20 Ethereum-based tokens, and then wondered why a technically superior Russian, Chinese or Korean guy couldn’t secure the company’s business after fundraising.

Even many of our ICO ranking companies seemed to assign a disproportionate number of points to the team member’s crypto experience, how many crypto advisors they have, and the ICO success experience they have on their team, rather than focusing on the underlying business model. be created with the collected funds

When one realizes that over 90% of the cryptos and ICOs out there are just tokens created to collect for an idea, and not just a token for a token’s sake, people’s emphasis will shift from technical aspects to more relevant valuation work. the actual business idea and the corporate business plan.

As we move into this era of evaluation before deciding to buy or invest in cryptocurrency, we will then begin to evaluate the future prospects or value of our tokens based on sound business considerations such as;

– Swot analysis of the company and its promoters

– Management competence and experience of team leaders

– Business idea justification beyond brand creation

– The company’s marketing plan and strategy for selling those ideas

– ability to deliver underlying products to market

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

– and design basis for market acceptance

What most people don’t realize is that the potential for their tokens to increase in value after an ICO isn’t so much about anything technical as it is about good things happening at the company raising funds and a perceived increase in the company’s valuation. it presents its business plan and delivers its business product.

Of course, buying cryptocurrency is not buying stock, and it is not a security in any company. We get it, but tokens 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 increases 100 times.

So when a company reaches some kind of financial or business milestone, the price of its token on the stock exchange will go up… and it will quickly go down when nothing good is happening. So what the company will do and how it will do it after the ICO is extremely important for anyone who doesn’t want to see the value of their Tokens go down forever.

Of course, most tokens will drop when tokens appear after a crypto exchange ICO due to those looking to make an immediate profit, but whether it will ever return to the multi-digit profit you expect will always depend on criteria. I already outlined above. Once you buy a token, the cost of “crypto-advisor” and “technical tricks” will go to zero due to the potential of your tokens to the moon.

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

In other words, spend more points on the business and governance of the ICO, rather than technical jargon that won’t help your mark in the market once the money is raised.