|ICO||Solves a Unique Problem||Size of Market||Customers are Willing & Able to Pay||Leadership Experience||Differentiated Product||Transparency||Competition||Currently Revenue Generating||Overall Grade|
|Fantasy Market Token||B-||A||A||C-||A||D-||High||No||B|
Do you appreciate our work? Would you like to see more grades from us? Speed up our research by donating on our donations page! All donations will go to a secure dedicated wallet, and funds will be used only to research ICOs.
Explanation of Criteria:
Solves a Unique Problem (UP) – Since most ICOs are currently start-up businesses, investors need to treat them like start-ups, and that means evaluating their unproven idea. In general terms, a business exists to solve problems for its customers in exchange for currency (fiat or crypto in this case). Whether it is Dial providing soap to clean your skin, or Uber providing you transportation as a service, every successful business solves a problem. In addition to solving a problem, the problem must be unique. For example, another US car manufacturer has a low probability of succeeding.
Size of the Market (MS) – Any business needs a group of customers who will buy from them. Luckily for us, a global digital marketplace creates markets with giant niches that might be considered too small when limited by the geographic boundaries of a country. This metric considers factors other than size. There are some markets that will be better than others, whether they’re larger, more accessible, free of regulation, more nimble, free of major influence, unbound by internal rules etc.
Customers are Willing & Able to Pay (WAP) – A huge market that solves a unique problem are great, but you also need customers whom are willing & able to pay. For example, targeting high school students with homework help solves a unique problem, but most high school students are not able to pay (or pay very much). Targeting their parents is a different story because they are both willing & able to pay to improve their child’s grades.
Leadership Experience (LE) – Leadership skills are extremely important to businesses, yet unquantifiable and tough to gauge on the internet. Great leaders can guide the company in the right direction yet know when course correction is necessary. They also are good decision makers, and know what to prioritize for the success of the business above all else.
Differentiated Product (DP) – It is easy to take an existing market or idea, throw it under a ‘coin’ an call it a new idea. If there is no added benefit to use a product associated with blockchain, there will be no adoption from customers. Simply slapping “blockchain” into a business model does not differentiate a product or service.
Transparency (TR) – ICOs have no obligation to keep the promises they make during their ICO, so they frequently use transparency as a way to build trust with investors. Transparency is great and necessary for ICOs, especially when they do not register with local governments. Use caution when studying up on their claims. Most transparency claims involve future actions, which can easily be ‘forgotten’ about or outright discarded later. ICOs are inherently risky for this reason. There is no repercussion (other than social) for taking ICO proceeds and running.
Competition (CP) – Competition in a market is good for society, but can be bad for new businesses. Unless a business provides a significantly differentiated product, they will likely be drowned by larger budgets and economy of scale of larger businesses. Even products with differentiation can be undermined by their larger competitors by any number of power moves (marketing, monopolization of supply chain, positioning, customer contracts, etc).
Currently Revenue Generating (CR) – Companies with a revenue stream that offer ICOs are extremely more likely to deliver on their promises than ones who have not proved the marketplace for their products or services. Even in markets where investor monies have some government protection, companies with a revenue stream trade a premium because there is innately less risk.
*Disclaimer: ICO Grades are not investing advice. ICO Grades are for education purposes only. Investing in ICOs is highly speculative and they do not have any safeguards provided by the government in other investment vehicles. Invest at your own risk.