I've noticed many ICOs have to spend a lot of money on promotions and advertising.
For example, let's say an ICO raises 10 million dollars but has to spend 9 million on promotion.
Therefore, they only really raised 1 million for the project.
Isn't this unethical?
If you're starting a company and looking for investors the traditional way via stock equity, you would never spend 9 million or even 5 million or even 2 million in order to raise 10 million from investors.
This begs the question, what ratio of promotion cost versus funds raised for ICOs is ethical?
And how do we know if an ICO is using an ethical ratio?
How can you precisely say that they have been using such an high amount for promotion and advertisement. I don't think that is the case.
Only if the project is scam then they initially tend to spend a lot or they spend just a fraction.
I believe that a project with strong background will never need to advertise and spend millions on it. Look at Tesla who stopped spending millions of dollars on advertisement and instead started improving their infrastructure which paid off. I think that these days, a project with great potential will go for IEO and not for ICO and IEO exchange take care of the advertisement. IEO that have been conducted on Binance Launchpad have achieved the hard cap successfully every time.