How to Safely Invest in ICO?
What is ICO?
Initial Coin Offering (ICO) is a form of attracting investments by selling tokens. ICO is similar to such types of investment as IPO or crowdfunding, but unlike them, companies wishing to increase their income by issuing tokens instead of shares.
The essence of the ICO is to find people who will purchase tokens. If the project proves to be successful, investors can make huge profits. Also, investors can use tokens in order to make payments on sites on favorable terms or wait until the project becomes successful and the value of tokens grows. In this case, the owners of digital assets will have the opportunity to exchange them for fiat money or another cryptocurrency. Moreover, the way to invest in ICO is available to all people as the price for one token starts from a few cents.
Most people equate tokens with cryptocurrencies. However, this is not quite true!
There are three types of tokens:
- Utility tokens - the owners of these coins can pay for the startup’s products and services that issue these coins.
- Equity tokens - such coins are considered to be analogous to shares. If people invest in these tokens, they receive dividends from the company's profits.
- Asset-based tokens - the rate of these tokens depends on real assets, goods, and products.
What do you need to know before investing in an ICO?
Before you decide to invest in a new startup, you need to know more about this project. Here are some tips on how you should evaluate the ICO project.
Gather information about the project in which you are going to invest
If you want to make some investments in ICO, you have to know the following information about the project:
- Key aspects of blockchain technology.
- The availability of competitors.
- The features of the token.
- When and where the project was registered.
- You need to find out on which exchanges and platforms you can purchase tokens and what discounts the company offers.
- Find out the amount the project is going to attract for investment, etc.
Research an ICO project team.
One of the most important things you should do is to pay attention to the project team. Try to know if these people are real, and find their profiles on social networks. You also need to find out if they have experience in developing tokens or cryptocurrencies.
Find out what types of promotions the project uses.
Pay attention to the number of followers on platforms and social media of this ICO.
By the way, it is worth checking the availability posts of the project in the top tech publications.
Read reviews about the startup.
Look for reviews about the project on the forums. Perhaps some people have already invested in this startup before you and can share their experience. This will help you understand if this project is real or not and whether it is worth investing in it.
Visit the website of the project.
Pay attention to the design of the startup website. Scammers do not waste a lot of money on a website's design. If the site doesn't look presentable, in this case, you should not invest in this project. Startups that rely on the successful development of their company do not skimp on the design of their site.
The site must also have a White Paper of the project, a roadmap, a description of ways to use tokens, information about the project team and partners, etc.
How to take part in an ICO project?
If you want to invest in any ICO project, you need to follow these steps:
- Go to the site of the project in which you are going to invest.
- Log in to your account.
- Choose a cryptocurrency for payment.
- Indicate the amount you will invest.
- Send funds from your wallet.
Which ICO project is considered the most promising in 2021?
One of the most promising ICO projects in 2021 is the DBX digital ecosystem. This startup is issuing tokens that are based on Quark and ERC-20 blockchains. The DBX team has significantly improved these blockchains. Thus, the developers were able to provide their users with secure and anonymous use of this digital financial asset. To protect its users from hacking, the company uses the “Quark” algorithm, which is complemented by the “Zerocoin” protocol. Due to the “Zerocoin” protocol, users of DBX tokens can make transactions anonymously and securely. As for the ERC-20 protocol, it provides transaction flexibility and access to decentralized financial services. The DBX project is not limited to one region. Today, the company has representative offices in such large cities of the world as Istanbul, Hong Kong, Moscow, Frankfurt, Zurich, Dubai, Riyadh, Singapore, Mumbai, Johannesburg. Moreover, the DBX team will not stop on this list. In 2022, the company is going to enter other markets and expand its target audience.
This startup is very promising and has already become popular and demanded among users who want to purchase DBX tokens.