Green Flag, Red Flag: Tips To Evaluate TRON Based ICOs
The simple saying ‘Better safe than sorry’ takes many precedences when choosing an ICO to invest within the TRON ecosystem. We have witnessed an astronomical growth regarding transactions being handled by the TRON network. A lot of credit for that goes to the SRs and the projects running on TRON protocol.
In a short span of time, we have seen close to 1600+ tokens being launched using the TRC10 protocol, which is also helping a lot in enhancing usage. Most of these tokens trade only using TRX pair. ICO purchase is also through TRX only.
All these help TRON eventually hold its ground in this bear market and promise a prosperous future as many of these projects get into mainstream usage. TRON (TRX) has made the token creation process super simple and almost free, with the cost of token creation being just 1024 TRX. This is helping many projects that had an idea but lacked access to funds and resources to launch their projects.
Having said this, there is a flip side to it; low entry barriers are also allowing a lot of ‘scammers’ to get into the system. They create tokens to exit a scam at some point in time and escape with the investor’s fund.
Lack of regulation in this domain makes it all the more difficult for you to recover your funds once lost. This article’s objective is to assist you with 10 pointers, which will help you evaluate a project and make an informed decision. Our humble request to all of you reading this article is not to gamble/speculate when it comes to ICO investments.
Success takes time; hence legit projects will take time, but the ROI will be phenomenal. Becoming a millionaire overnight is a myth. It takes a lot of patience, perseverance, and knowledge to sail through this roller-coaster ride and achieve your financial goals. So be smart and choose wisely.
In this article, we use a simple strategy to evaluate a project – Green Flag means the project is good to invest in, the Red flag means we need to avoid investing in it. So here are our 10 pointers to conduct an essential evaluation of a project:
This is the heart of any business. GREEN flag goes to the project with a working or planned product, a clear use-case, and plans to launch BETA versions. Also, you need to evaluate if using blockchain actually makes it viable and useful.
RED flag a project with vague or undefined use-case or is too simple that every kid off the blocks is doing it. Simple tipping/meme tokens are classic examples of this where you need to access the usability carefully and how the project differentiates itself from other off the mill projects.
This is again one of the most important aspects to access a project. A team that is not the public has a higher probability of pulling off an exit scam. The blockchain is about transparency, and if the unit itself is not transparent, then it’s a big RED flag. So look out if the project has a team, who are the developers, advisors, marketers.
Does the team have public profiles visible on the portal? Do they have previous business / ICO / blockchain experience? Is the project happy to post the photographs of the team on the official website? If you don’t find this basic information, give it a RED flag and give a GREEN flag if your finding results are satisfactory.
Token Supply and Pricing
This is an excellent indicator to access the intent of the project. This differentiates the professionals from the noobs. A big RED flag goes to ICOs, which creates ridiculously high supply, which runs into thousands of billions/trillions with an absurd ICO price on www.tronscan.org, ranging from 0.1 to 50 TRX for each token.
If you do simple mathematics, you will realize that we will run out of all the TRX available, and still, the ICO will not be 100% sold, which means the creator doesn’t even intend to achieve full ICO sale, a clear exit strategy. If you observe this RED flag, then immediately drop the idea of investing in that project as high chances you are dealing with a scam or a noob, and both are not good for your investments.
GREEN flag goes to projects that, if 100% sold at the ICO price, cover only a small percentage of TRX supply, leaving enough space for its value to grow and give good ROI to early investors.
Whitepaper and Website
These are the first impression of the project and again are a big differentiator between professionals and new kids on the block. Give a GREEN flag to a project which has a detailed whitepaper and website, which clearly explains the project, product, use case, roadmap, key benefits, token distribution allocation, etc.
A RED flag goes to projects that either do not have these ready or just for namesake. A project should have this basic stuff ready before they venture out to garner funds from the public.
Social media is the strongest tool available in the digital space to create a huge global customer base. A legit team will strongly invest a lot of time and energy to build up their social media presence.
Give a GREEN flag to the project, which is active on most social media channels like Twitter, Telegram, Reddit, Medium, Facebook, Instagram, Slack, etc. A RED flag goes to projects that create it for namesake and do not actually build the community or engage proactively.
The communication by the community managers and teams is a good indicator of accessing the top bosses’ true intent. Check if the community managers are engaging with the community to build relationships with them and spread awareness about the project, developments, and plans. Are they just trying to hard-sell the?ICO.
Also, the community managers’ transparency goes a long way in establishing trust for the project. Give a GREEN flag where the admins are real and transparent. Their social media profiles match different platforms (i.e., they are the same person in the telegram, Twitter, Facebook, LinkedIn, Instagram, etc.). They are actively involved in spreading knowledge and awareness.
Give the RED flag to the admins whose real identity you cannot access. Real people who believe in an idea/project and are entrusted with the task of promoting it will never be required to hide their identity.
Pre-mine & Freeze
A legit ICO will have a clearly defined roadmap for token release and distribution. GREEN flag goes to projects which follow their roadmap and keep the un-utilized tokens frozen as defined.
RED flag for projects which put 100% of supply into circulation and trade on day one itself, high chances they want to sell whatever they can before they pull the plug.
Market Size and Potential
Give a GREEN flag to the project that has identified a niche market and leverage blockchain to create a global customer base. Typically products with a global use case, sizeable customers already spending money in that domain( which will shift to blockchain over a period of time) are good green flag indicators.
The RED flag for the projects hardly has any existing or future market because the use case is vague or non-practical.
This parameter kicks in a little later but still helps in safeguarding your money from becoming ZERO. Give a GREEN flag to the team that values responsibilities and delivers on time – be it a product release, partnerships, merchant onboarding, events, commitments to investors, etc. Vice-a-versa for teams that frequently backs out from their own words.
Apart from these, be cautious about the fake/counterfeit tokens, which almost look real to the legit tokens except for a small change in the alphabets. It is advisable to buy your tokens from legit exchanges / tronscan links shared by the project officials / from the project’s official telegram channel. You are venturing into a risky domain when you enter private sale groups having low control over the fake tokens.
Very few things in the world are perfect, but we need to aspire towards perfection daily. So after evaluating a project on the above parameters, if a project scores 8-10, it could be considered safe. Any score below five should definitely be skipped until the team proves it another way around.