As a bull market develops it becomes increasingly harder and harder to find 10x or even 100x projects that will land you directly on the dark side of the moon.
One thing you can do is prosper in the river of shitcoins and hope to find a nugget that will get you a first-class ticket on one of Elon’s rockets. This though comes with a lot of work and inherent risk. Oh, not to mention you may get the full ‘rug-experience’ whilst doing it, making sleep a fond childhood memory.
Another way to chase the pump dragon is to find coins before they are even listed. Pre-revenue or pre-release coins can pump hard out of the gates. NEO a Chinese open-source blockchain, one of the OG dinosaur coins, initial went to public sale at $0.3 and during peak 2017 bull mania, hit $180 which is a 6000x return on your initial investment.
These initial coin offerings are called ICOs. They take the name from an initial public offering (IPO) when a private company finally goes public and offers stock to the general public.
Yesterday was the Coinbase IPO where two of these worlds collide. Coinbase, previously a privately held company, listed on the NASDAQ with a valuation close to $100Bn. To put that into perspective those are Facebook kinda numbers…
Instead of crypto projects offering stock in their company they offer their coins or tokens. This is a great way to hold equity in a crypto project. Even better if the token has utility, governance or staking rewards.
For our full article on crypto vs stocks and shares head HERE.
Other projects like ETH, LINK and even ADA all had very successful ICOs and seem to have some form of future. On the other hand, there have been some disasters and a lot of ICOs, especially in the 2017 ICO boom were fraudulent.
You may see a lot in the news about Ripple XRP and their current 12 round bout with the SEC. The SEC sued both XRP founders CEO Brad Garlinghouse and Executive Chairman Chris Larsen, for what they deem to be selling $1.3Bn of XRP to investors.
The SEC argument is that XRP is a security and as such should have been licensed for sale by the SEC in the US. Regardless of the outcome, you may want to check the large amount of XRP that the two above have been continually dumping on their loyal following for the past however many years…
ICO variations in crypto.
Just as with a lot of things in crypto, people like to get all high and mighty and start thinking they are smarter than they are and mess about with the wording. There are a few variations of the IxO I have seen. Some make a lot of sense, others, not so much…
IDO – Initial DEX offering
IEO- Initial Exchange Offering
IFO – Initial Farm Offering
IJO – Initial Jetfuel offering… Not so much.
They are all spins on the ICO, IFOs require you to stake an LP token and in return claim your coins. IDOs are using decentralised exchanges to launch their token and IJOs well… let’s just leave that there.
The age of launchpads and pre-sale dumps –
This one really leaves a sour taste in my mouth. There is a trend we are seeing, particularly in the DeFi space with Launchpad projects. These are projects who offer a platform from which other coins can launch from…
Seems a little shoehorned to me. To participate in a launchpad ICO, whatever shitpad is launching the coin you are interested in, you will have to buy the shitpad coin, stake a whole lot of it and then lock it up for x amounts of days to be in with a chance to win the coin you actually want. All the while you will have to pay for that if you are the ‘lucky’ few who get the chance.
I seem to think the random distribution of people who get lucky seems to be very ‘lucky’ indeed.
Pre-sales are even worse in my opinion. Just another opportunity for projects to bring CT influencers on board, load them up in the pre-sale and immediately let presale allocations dump on retail investors once the project goes live for trading.
You have to be very careful with ICOs that have had a presale allocation, especially if the allocation is a considerable percentage of the overall amount of tokens.
ICO Allocations –
Allocations are, as the name suggests, the allocated amount of coins for certain groups of people pre-release.
This is for an imminent ICO called Jigstack. Not financial or investment advice…
As you can see from the pie chart which is lifted from www.cryptorank.io there is a considerable amount of the allocation reserved for the project. Okay, that’s fine.
The alarm bells ring when I see a private sale of 2.00%. Especially when there have been previous rounds of private sale allocation that hold a considerable amount of the total supply of Jigstack.
There is absolutely nothing stopping the private sale investors from taking this public sale as an opportunity to dump on public sale investors if and when the Jigstack token starts training.
There are a few things you would need to confirm before going near this public sale in my opinion.
Are the private sale investors a value-added investment? I.e. do they in any way add value to the project or are they in it for the returns?
Are the private sale or the remaining project allocation tokens locked? If not when is the next round of sales going to start? Increasing the supply of tokens on to the market is a quick way to drive the price of the asset down.
Ideally, to prevent this overloading of private and team allocations from being able to dump on retail investors, there are a few things that reassure me when I am looking to invest in an ICO.
Timelocks – Are the teams and private investors tokens locked for a duration of time, preferably over the release of the token? This way you can be sure that the public sale isn’t a way for the early investors to get their juicy returns whilst destroying the experience for public sale.
Fair launch – This is the single most important aspect of a launch, in my opinion. A fair launch is when the only initial way to receive that token is to mine it or farm for it. Effectively earn it instead of buying it.
The most famous fair launch is Bitcoin. Satoshi mined the first genesis block and convinced others to join the network to mine for Bitcoin. There was no presale, no private investors and every single Bitcoin in existence were mined.
More recently yearn Finance, YFI token was released with a fair launch and Andre Cronje actually kept no YFI back for himself. The statement from Cronje was “Earn it don’t buy it”. A very very successful project and an excellent example of how a project should be launched.
Resources for ICOs –
There are a few website and platforms that I find useful when on the hunt for ICOs.
ICO drops – This site is one of the leaders in this space. It has all the past information on ICOs including what they listed for and their target. It also has active and upcoming ICOs too and all the tokenomics of their target.
Cryptorank.io – This is where you can find a nice clear breakdown of the allocation for each ICO and check out if there are any less than favourable percentages in the pie.
CoinMarketCap – A new feature on their website has an ICO calendar! Very useful information indeed. Just follow the images below on how to find this.
Coin list – Hosts a lot of ICOs on there although I have tried to sign up and my KYC has taken over a month now…
Crunchbase – This one isn’t just for crypto it is for nearly all private round investing stats. You can see who and how much private equity was bought in private rounds with links to the source of info.
Other than that, I often use Twitter, Reddit, CoinDesk and even more niche news outlets like BSCdaily and BSCnews for all the latest BSC gems.
There is a way to track upcoming pre-released BSC gems which I will post a video of on Patreon later this week. You can join Patreon HERE.
Another source I use but hate to use is LinkedIn. That platform is the biggest virtue signalling platform on the planet, makes me cringe every time I open it. At least you can see transparently who the team are if they are real and any experience they have in the past.
Join a teams Telegram channel or Discord. Ask the developers questions and if they can’t answer you or worse, block you, you know something might be a little fishy. Telegram is great and if you want to join our free Telegram community join HERE.
One finally metric I like to use to judge an ICOs sentiment and potential is how quickly the public sale gets filled. One of my favourite projects Fetch.ai sold out in 10 seconds! They listed it on Binance as an IEO and it was snapped up instantly. The project has since gone on to do great things with a lot of great partnerships and continual development.
Our easy to read the complete guide to Fetch.ai is HERE.
That’s it, you now should be equipped to go out and find a gem. If you find any fair launch projects, let me know and I will be very interested! If you are unsure about anything head to our Telegram and speak to us directly, we will be happy to help.
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