If there’s a day, there will be an ICO. As of November 2017, about 800 ICOs had been conducted, and the trend doesn’t seem to show any signs of declining.

When something gets so hyped, most likely there is a substantial reason behind it, and investing in a good ICO can both boost your future economic stability and help you make your contribution to the field in which you have decided to invest.

However, choosing a reliable project out of 400 possibilities seems like a tedious and time-consuming task. We would like to offer an alternative approach. First, learn some basic guidelines to sort out ICOs that aren’t worth your attention, and focus on choosing between those that managed to get through this “basic” examination. The method is based on three fundamental questions – why, who, and how. We will work through these using the DMarket ICO as an example for the demo-case study.

Why Does This ICO Exist?

You need to investigate the background. Does the industry need blockchain? Is it reasonable? What problems will the introduction of this blockchain-powered product solve? An ICO shouldn’t be started just for the sake of it. Let’s have a more detailed look at our study subject.

DMarket is the first global cross-platform marketplace for trading in-game items based on smart contract and blockchain technologies. The gaming industry has a massive growth potential – out of 2.3 billion people involved in the industry, only 6% can monetize their skills right now, and even with the existing imbalance, the market is projected to generate $109 bn revenue by the end of 2017.

DMarket solves a set of apparent problems which exist in the gaming world right now:

  • Currently there’s no unified system to claim the ownership of a digital item and prove it to be yours
  • Games, franchises, and even gaming platforms and engines are disconnected, making cross-platform trading nearly impossible due to complications in database synchronization
  • Casual gamers, who don’t plan on participating in the professional circuit, waste their skills and time worth hundreds of dollars
  • Due to system limitations and lack of needed API, a third party is involved in every transaction, making fraud and deceit rampant in in-game item trading

DMarket blockchain makes gamers true owners of their assets: they are like Bitcoins in your wallet – no one can steal them, block them, or falsify items. On the DMarket platform, in-game items become real, meaning a gamer can exchange, trade, or evaluate the price of the item.

Who Are the Founders and Members of the Advisory Board?

After you have found out that the project you are interested in has a particular objective to change some aspect of the world, examine the team working on the project.  Do the founders, advisory board, and partners have any experience in the field they are pioneering?

The core DMarket team are people with an interest in and, more importantly, extensive experience in trading and gaming. The project was founded by Volodymyr Panchenko, the number one private merchant of digital games in the world with more than 15 million copies sold over the course of 5 years, and founder of skins.cash, the world’s second-largest skins trading platform, which became so popular within a single year of its creation in 2016.

Alexander “ZeroGravity” Kokhanovskyy adds experience in the professional gaming industry as a founder of one of the most successful Esports teams Na’Vi and an ESForce shareholder.

Now let’s move to the advisory board. Though we have less information here, LinkedIn profiles for each adviser are provided, and the data is shown in a convenient way with logos of the important projects, brief characteristics, and a comment on the project from the adviser.

For example, among DMarket’s advisers we can see Dr. Moe Levin, CEO of Keynote, a global technology conference company that has invested more than $20 million in cryptocurrency startups. Brian Kerr, the next adviser in the list, is managing director at CL Ventures and founder and CEO of Fnatic, which makes him an expert in everything connected to gaming.

Make sure that the advisory board is diverse. Ideally it should include experts in blockchain and cryptocurrencies, business and investment, and the respective field of the said startup.

How Will It All Work?

One of the main problems with startups and ICOs is that the ideas proposed are revolutionary and great, but most of them can’t be delivered due to technical limitations. Now that the big idea to change the world and the people who have an understanding of what they are doing are checked off, it’s time to move to the least pleasant part – the executory one.

Check the Whitepaper of the project to get detailed information on the technical sections. Even if you have little understanding of the topic and are driven solely by the idea of the project, an obscure and too general Whitepaper can serve as an indication of severe problems in the structure of the enterprise.

What does an excellent Whitepaper look like? Using DMarket as an example, here is the detailed outline of characteristics to look for:

  •    Easy navigation and decent UX;
  •    Diagrams and pictures are relevant and informative;
  •    Precise analysis of the current market state with statistics and strong analytical component;
  •    The function of the project and cryptocurrency in the respective field is apparent;
  •    The whitepaper shows the benefits for the target audience and the potential revenue;
  •    The project has a clean roadmap and easy-to-read “Use of Funds” section;
  •    The information about key players of the team is accurate, open and accessible.

Make sure you are aware of the principles of token allocation; this will help you identify how client-oriented the project is. DMarket is a service for gamers created by gamers; that is why 85% of tokens are allocated for the Crowdsale. A lot of projects sell 30-40-50% of their cryptocurrency, while even a 20% retained ownership creates for themselves tools to control the investors and the market.

The last crucial thing to check before settling on your decision is the readiness of the product. A startup can have a perfect Whitepaper and a good-looking token allocation policy, but these are of no use if the project never materializes. DMarket already has a fully functioning blockchain, as well as an Alpha/DEMO version of its product.

DMarket DEMO allows users to watch and test the trading process of the in-game assets, take a closer look at how DMarket Coins work, and test the blockchain wallet and personal key authorization. In addition, the DEMO version enables users to view Blockchain Explorer, where blocks will contain details about every transaction ever processed through the platform.

DMarket DEMO is a great way for potential investors to test the product’s core functional features and company’s technological capabilities in general to get a better understanding of what to expect of the final release.

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