can you explain the due diligence that you guys do?
The proper due diligence of an ICO project involves different dimensions. These dimensions
include:
i. Assessing business viability
CryptoProfile will assess the effectiveness of the business that is behind the ICO. The business
needs to be unique. Many ICOs are simply a replication of an existing cryptocurrency. Such
ICOs are doomed to fail from the start. We will ensure that the ICOs we recommend to our
users are unique and the business models they use are viable.
ii. Technology used
We understand that not everyone can effectively understand how decentralized blockchain,
hash tables or directed acrylic graphs technology works. However, CryptoProfile will use its
experts to review the underlying technology, including algorithms, the choice of the hash
functions, the consensus approach used and other aspects that influence the efficiency of the
platform. Our users will rest easy knowing that the technology behind their favorite ICOs is
solid.
iii. Token economics
Token economics used by an ICO can influence the success of the platform. Effective token
economics will prevent future price destabilization while poor token economies can collapse
and entire cryptocurrency. We will check on the token economics used to ensure that the
platform is successful.
iv. The team behind an ICO
It is also important to ascertain the team that is behind a specific ICO. CryptoProfile will ensure
that the founders, advisors, and partners of the ICO are authentic. We will provide a
background check on them. If there any nefarious individuals associated with the platform, we
will blacklist the platform. The people flagged will include people who falsify their credentials,
those who are associated with past ICOs and those blacklisted by regulatory agencies like the
SEC and MAS.
v. Assessing the utility of the coin
Just slapping the name ICO on a project does not instantly mean that it will be successful.
There is a need for the utility of the coins. Utility refers to a specific use of the platform. There
already established coins that provide storage of wealth. Therefore, coins need to be offering
more than just speculation to investors. When the coins have a utility like purchasing other
coins or as the transaction coin for an exchange, the coin will likely maintain its value if a
viable business idea backs it. CryptoProfile will be assessing the utility of coins to ensure that
they can be supported.
vi. Regulations
In some cases, a blockchain project may have all the features expected to ensure there is
a success, but it may be in a country that restricts the platform. As a result, the regulations
may be so stifling that the business cannot achieve any form of success. When China banned
cryptocurrency ICOs, many of the startups died leading to huge losses for business people.
CryptoProfile will monitor the regulations in development to ensure that only those that are
future proof are added to the platform.
vii. Pump and dump
The final popular problem is an increase in the pump and dump strategy by ICOs that use
viable ideas to raise money and disappear. Fortunately, our airdrop system ensures that
cryptocurrencies have a long-term commitment with use by requiring them to buy and hold
CP tokens for six months to ensure that they are serious about the business. Investors on the
platform can be sure that they will avoid pump and dump investments.