ICO Rating Methodology

Our rating methodology is based on independent research, and is designed to provide a qualitative overview on various ICOs.

Perhaps more important, it is a necessary effort to educate the crypto community, and help establish some best practices to strive towards. We attempt to kill scams and call out on money-grab ICOs by introducing some reasonable and objective, although yet still preliminary, standards to evaluate things by. Additionally, our goal is to create a clear, concise, and informative framework, allowing our community to make educated decisions in a highly dynamic and rapidly changing environment.

Here are some of the evaluation indicators we are currently looking at:

I. Rating algorithm

  1. Every ICO is subject to evaluation based on four big criterias: team evaluation, product evaluation, token economics, and business evaluation. Each criteria contains several sub-criterias, with a variable importance degree in the overall score.
  2. Rating is done on each sub-criteria with a score between 1 and 5. Score of 1 being the worst rating, and score of 5 being an exceptional rating.
  3. An overall average is calculated taking each criteria and sub-criteria into account.
  4. Criterias have a variable degree of importance in the overall score and are calculated as follows:

Rating formula =
{(Founders score * 4) + (Advisors score * 3) + (Proof of concept score * 2) + (MVP score * 2) + (Technology layer score * 3) + (Token utility score * 3) + (Network effect score * 3) + Valuation score + Market potential score + Competition score + Supply score sold + Vesting score + Hype and media presence score} / 26.

II. Rating criterias:

Rating criterias, sub-criterias with corresponding reason assigned to each score point are as follows:

Team evaluation:

A. Founders: Are the founders known? Do they have relevant experience and connections?
  1. Unknown people. No serious background information available.
  2. Partial information available, no relevant experience.
  3. Background information available, no relevant experience.
  4. Solid, relevant background and connections available.
  5. Solid, well known, experienced and well connected founders.
B. Advisors: What level of commitment, experience and connections do the advisors bring?
  1. No reputable advisors with relevant experience.
  2. Few advisors with little to no relevant experience.
  3. Advisors with relevant experience.
  4. Reputable advisors with relevant experience and connections.
  5. High profile highly experienced, well connected and committed advisors.

Product evaluation:

A. Proof of concept: Is the proof of concept comprehensive? Does it address a real problem or need?
  1. No, incoherent concept or no need for it.
  2. Difficult concept to understand, hardly any need or problem to solve.
  3. Clear concept which addresses a real problem.
  4. Clear, well thought concept which addresses a real problem of high interest.
  5. Exceptional proof of concept addressing a critical problem.
B. MVP: Has the concept been tested? Is there an MVP? How far is the launch?
  1. Untested concept.
  2. Initial tests, no MVP.
  3. MVP ready, Alpha launch.
  4. MVP ready, Beta launch.
  5. Fully working initial product.
C. Technology layer: Is the product innovative? Does it contribute to the blockchain ecosystem?
  1. No, the product is just a clone with no contribution.
  2. The product is a dapp with minimal interest and little contribution to the ecosystem.
  3. The product is a dapp, exchange or protocol addressing a real problem or need.
  4. Innovative product offering a solution to a high interest problem.
  5. Innovative protocol tackling critical problems of highest interest.

Token economics:

A. Token utility: Does the token have any utility? Is it a core function to the network?
  1. No, the token has no utility.
  2. Token has a limited, unclear utility.
  3. The token has some added, but not inherent value.
  4. The token is embedded in the network and has inherent value.
  5. The token has both inherent and added value and is embedded at the core of the network.
B. Network effects: Are strong network effects built into the system? Are incentives aligned to encourage the growth of the network?
  1. No network effects built in.
  2. Minimal network effects, unclear incentives.
  3. Network effects and incentives present.
  4. Solid network effects with clear incentives due to inherent utility.
  5. Strong network effects, aligned incentives and high utility value.

Business evaluation:

A. Valuation: Is the valuation reasonable ? Sufficient but not too high for the scope of the project?
  1. No, the valuation is ludicrous, the project could do with 1/10 of the sum.
  2. Valuation is higher then the project would need. Likely a money grab.
  3. Valuation is reasonable for the scope of the project.
  4. Valuation is modest for the caliber of the project.
  5. Valuation is impressively modest relative to the high caliber of the project.
B. Market potential: What is the market potential? Does the project look like it could penetrate the market and conquer the world?
  1. No clear market potential.
  2. Limited market potential.
  3. Reasonable market and growth potential.
  4. Solid market and growth potential.
  5. Exceptional market and growth potential.
C. Competition: Does the project have competition? How strong does it look relative to its competition?
  1. Awful position, competing with many strong players.
  2. Weak position, facing strong competition.
  3. Reasonable position, facing strong competition.
  4. Solid position, facing weak competition.
  5. Exceptional position, facing almost no competition.
D. Supply sold: Does the team distribute a reasonable amount of the tokens so as to encourage creating strong incentives and network effects?
  1. Negligible supply, greedy team.
  2. Small supply, poor incentives.
  3. Modest supply, weak incentives.
  4. Reasonable supply, responsible team.
  5. Large supply, solid inventive, committed team.
E. Team incentives and vesting: Does the team have a sufficient stake to have aligned incentives? Do they have a vesting schedule implemented?
  1. Large stake, no vesting.
  2. Small stakes, no vesting.
  3. Modest stakes, no vesting.
  4. Reasonable stakes, modest vesting.
  5. Solid stake, healthy vesting.

Business evaluation:

Hype and media presence: Is the project present on social media and chats? Is there interest for it?
  1. No presence, negative image.
  2. Modest exposure and no interest.
  3. Reasonable exposure and modest interest.
  4. Solid exposure and high interest.
  5. Exceptional exposure, high interest and considerable hype.

III. Submission, assessment and peer review

ICO submissions, reviews and ratings are currently done internally by our experts in accordance to our methodology. The next important step in the evolution of our platform is our token economy and rewarding mechanism for our peer review marketplace.

Bonus tip: Every ICO expert will be able to apply and become a peer reviewer in our marketplace. Each reviewer will be rewarded on the quality of his work. You can find out more and apply to become a peer reviewer here: [email protected]

Final note:

The ICO environment is rapidly changing and one cannot ignore the immense potential of this new phenomenon. As it looks now, this is likely to become the de facto means of securing funding and bootstrapping startups in the digital age. It is our mission, to bring light and clarity to this space; by creating a clear, concise and instructive framework, we intend empowering everyone in the crypto community to make educated decisions with respect to ICO’s, and consequently, create a strong incentive for ICO’s to adhere to best practices.

Our rating methodology is constantly improving, but we encourage everyone to do their own due diligence and research before investing in any ICO.

Important note: The information provided on this platform does not constitute legal or investment advice. Due to the dynamic nature of this field, all information contained on this platform could be subject to change without prior notice.

The ICO Market Data Team - Last update: 5 December 2017

P.S. We appreciate your feedback, so feel free to contact us at [email protected]