Rating ICOs

The explosive growth of ICOs has led to some of the fascinating innovations in the internet space in recent times. There are more than 5000 ICOs listed here, and, as per a research report from NUS-Singapore, more than a million smart contracts running on the Ethereum blockchain. The report studies the bytecode from the Ethereum blockchain, and, categorizes smart contracts into various functions. What is interesting to note is that not all of them are ICO’s but some of them are behind smart apps such as Ethereum and Golem.

This space has seen many innovations in smart contracts where firms have tried to create new mechanisms for contracting such as those that relay back dividends on profits earned, or, those that promise continuous buy-backs or such. However, along with explosive unregulated growth, arrives problems of speculation, spam, and invalid ICOs.

During the initial stages of the dot-com boom, we saw a lot of firms raising money with no valid business model, or, revenue/profit generation plan. Eventually, this led to a massive crash in the stock market. To prevent such things from recurring in the crypto-space where startups or businesses that intend to go the ICO route for capital infusion, rating mechanisms are often used to judge the ICO. Almost all of these rating schemes use factors such as : a) the offering Whitepaper, b) Team’s reputationĀ  c) LinkedIn Profiles d) Telegram engagementĀ  e) Blog postings f) Prototype’s traction g) Prior seed or angel investors h) token sale conditions (hard cap/soft cap/flexible cap/burn rate), etc… as methods to decide a ranking.

Several of these ICO rating mechanisms now provide private (pay-walled) services to individuals and institutions willing to invest in this space.Ā  This marketplace for ratings is slowly becoming similar to that independent credit rating agencies.

A few interesting ones that provide ratings are as follows: