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

Statistics could no longer be ignored. Most ICOs are scared and on the sidelines once the tokens hit the crypto exchange, after the frenzy and “FOMO” that attends the crowdsale is over.

Most observers who follow the ICO phenomenon agree that the trend of the last few months is that ICOs lose value after the crowdsale, and many buyers wait in vain for the “moon” they were promised once the cryptocurrency goes public. portal

However, what is not discussed is the main reason why we are seeing this phenomenon and that crowdsale participants, including the rating companies that most of us rely on to make our choices, must be doing it wrong when choosing which ICO has the most value. , or has the greatest likelihood of increasing in value after the crowdsale is complete.

​​​​​​While there are many reasons that can be legitimately cited for this phenomenon, there is one fact that I believe is more responsible than most of the other controversial reasons: the valuation of ICO tokens and the inappropriate emphasis on “blockchain experts”, “ICO advisors”. ” or “technical gimmicks” for erc20 tokens.

I have always believed that the need for blockchain technical experts or ICO technical advisors is overstated or even completely irrelevant when a project is judged by these criteria, unless the project is trying to create an entirely new coin concept. For most ERC20 tokens and cryptocurrencies, the really important factor should be the business plan behind the token, as well as the management antecedents and profiles of the team leaders.

Anyone involved in the industry should know that creating an ERC20 token from Ethereum or similar tokens from other cryptocurrencies doesn’t require a lot of technical skill or an overrated blockchain advisor (in fact, with new software, an absolute tech novice can make an ERC20 token in less than in 10 minutes.

So technical information shouldn’t be a big problem for tokens anymore). A business plan should be key; level of business experience; the competence of the project managers and the business marketing strategy of the main fundraising company.

Frankly, as a lawyer and business consultant with over 30 years of experience in several companies around the world, I can’t understand why people keep looking for some Russian, Korean or Chinese “Crypto Whiz” or “Crypto Advisor” to identify the power of an ICO for what is basically a crowdfunding campaign for a BUSINESS CONCEPT…

I firmly believe that this is one of the main reasons most ICOs never live up to their pre-launch hype. In an age where there are many tokenization software, platforms, and freelancers, the disproportionate focus on blockchain expertise or technical ability of promoters is largely misplaced. It’s like trying to gauge a company’s likely success based on the ability of its employees to create a good website or app. That train has long since left the station with the proliferation of techies on freelancer sites like Guru; Upwork, Freelance and even Fiverr.

People seemed to get too caught up in the hype and technical skills of people promoting ICOs, specifically ERC20 Ethereum based tokens, and then wonder why the technically best Russian, Chinese or Korean guy can’t implement the business end of campaign after fundraising campaign funds.

Even many of the companies included in the ICO ranking seemed to assign a disproportionate amount of points to the cryptography experience of their team members, the number of crypto advisors they have, and the experience of successful ICOs on their team, rather than focusing on the core business model of being built on the collected means

Once you realize that over 90% of cryptos and ICOs are just tokens created to raise funds for an idea, not tokens for token sake, then people’s focus will shift from technical perspectives to the more relevant work of evaluating the business idea itself and corporate business plan.

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

– SWOT analysis of the company and its promoters

– Managerial competence and experience of team leaders

– The validity of the business idea beyond the creation of the token

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

– Ability to deliver basic products to the market

– Customer base for products and services to be created by the company

– and a basis for predicting market acceptance

What most people don’t realize is that the potential for their tokens to increase in value after the ICO is not so much about anything technical as it is about good things happening in the company raising funds and the expected increase in the company’s valuation as it develops. your business plan and deliver your business products.

Of course, buying cryptocurrency is not buying stocks or buying securities of any company. We understand this, but tokens react in much the same way that stocks react to good or bad news about a company. The only difference is that in the case of cryptos, the effect is multiplied by 100 times.

So when a company achieves some kind of financial or business milestone, the price of its token on the exchange will go up… and quickly go down if nothing good happens. Therefore, what the company will do and how it will do after the ICO should be of utmost importance to those who do not want to see the value of its tokens plummet and stay forever.

Of course, most tokens will plummet once the tokens go public after the ICO due to those who want to make an immediate profit, but whether it ever comes back to give you the expected multi-digit profit will always depend on the criteria I already posted above. Once you’ve purchased a token, the cost of “crypto consultants” and “tech geeks” is nothing compared to the potential of your tokens to the moon.

Adhering to this reality, I think a smart crypto buyer or investor should focus less on how many crypto consultants a project has or how technically good the team is (unless the company’s core business is technical in nature) and focus more on management, marketing and the potential customer base of the company raising funds through the ICO.

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