What Does It Take to Create a Good ICO Rating?
Some things are easy to rate.
If you go to a movie, you can make a ruling on how good it was based on your own enjoyment of the film, and perhaps on how good the cinematography and acting were. However, some things require some real work to rate accurately. ICOs are one such thing. Let’s take a look at what goes into developing an accurate and reliable ICO rating.
First, You Need an ICO List
In order to rate ICOs, you need to have a list of ICOs awaiting ratings. An ICO list on its own is a valuable tool for the cryptocurrency community, as it collects ongoing and upcoming ICOs in one place so potential investors have a great place to start their research. Especially given the difficulty of advertising an ICO, thanks to ad bans on most major platforms, it could be hard to find new ICOs to invest in without a list. Maintaining a list of ICOs requires having reliable web hosting, a well-designed website, and some method of updating your list, whether via inviting ICOs to submit themselves to your list, using a web crawler, or manually searching and adding ICOs that interest you. If you use user-generated or bot-generated content, you need to have a human on your team overseeing it in order to avoid the sort of sloppy, embarrassing errors that can occur without fact-checking.
Then You Need a Panel of Experts
For an ICO rating to have merit, it needs to have been created by someone with the credentials to judge the trustworthiness of the project. You could have a single expert do all of your ratings, but the staggering number of ICO projects out there might prove a daunting task for one person. Plus, if you have only one rater, they are only drawing on their own knowledge, and the ratings may also be influenced by their own biases. Ideally, you should have a panel of experts, drawn from several industries. Knowledge of cryptocurrency, business, law, and investment could all be beneficial for an ICO rater. Additionally, you might want to have some people on your team who are skilled at research and have a love of fact-finding, as it may take some digging to find all the details about an ICO’s team.
When choosing your panel, it’s imperative that you vet them thoroughly. Be sure that they actually have the experience and expertise that they claim to have. Only hire people who are suitable for the job. Resist the urge to give a job on your expert panel to an old friend or favorite cousin who needs work. Remember that when you make someone an expert on your site, you are vouching for their knowledge. It could reflect poorly on your site if you employ so-called “experts” who proceed to make uneducated comments about cryptocurrency on social media, or use their position at your company to get speaking engagements or jobs for which they are not qualified. There are two approaches you can take to having a rating panel. One is to share the identities of everyone involved, in order to showcase their expertise. The other is to keep your rating board anonymous, in order to protect them from bribery and harassment. Both are equally valuable, and you may want to discuss with your potential raters what they would prefer before making a final decision.
You Need to Establish Your Criteria
To bring it back to the movies, different genres are judged on different criteria. You would judge a comedy on how funny it was, but that’s not really a concern for a documentary. ICOs, on the other hand, should all be judged by the same criteria, and an ICO rating site should apply those standards evenly.
Some sample criteria include the quality of the ICO’s team, the merit of their idea, and how realistic their goals are. A rating might also take into account marketing and social media engagement. While many industries might consider a receptive online audience to be nice but not always necessary, an ICO’s audience says a lot about them. If the project has been received well by the cryptocurrency community, it speaks well to its potential success. On the other hand, if a project appears to only be gaining traction with crypto-newbies who are convinced they’re going to get rich, it may not be a trustworthy ICO. Your criteria should be clearly displayed and explained, so users of your site understand why a particular ICO has been rated as good or bad. After all, different potential investors will be more or less risk-averse, and some may see certain criteria as less important than others.
You Need to Research, Research, and Research Some More
Remember that team of experts you hired earlier? They’d better enjoy researching, because there are so many things that need to be investigated before rating an ICO. Just considering an ICO’s team, you first have to determine if the people who are listed as being involved in the project are actually involved in it. If they don’t list the project on their LinkedIn profiles, are they not actually affiliated with the program, or are they ashamed of their involvement? Either one is a definite red flag. It’s not enough to just discover if someone actually works for an ICO, though. You also have to follow up and see if they actually have the experience and skills they claim to have. Are they qualified for their role at the ICO?
Beyond that, your team will need to read the whitepaper to determine its quality and the validity of the proposed project. They’ll have to check GitHub repositories to inspect the project’s code. Someone will need to have a look at how well the project is engaging with investors on social media. Of course, if all of that seems like too much work, you could just do a surface-level amount of research, make a rating based on your initial impressions, and then suffer the fallout when you inevitably give a good rating to an obvious scam.
You Need to Choose an ICO Rating System
How will your ratings be expressed? The most popular options appear to be rating them on a scale of 1-10, or 1-5, or using letter grades. However, you could come up with your own unique rating system if you wish to stand out. Whatever you use, it’s important to make it clear and easy to understand if you want your ICO listing and rating site to be popular. It’s also beneficial to prominently display the rating, as we live in the “too long, didn’t read” era. Many people will simply scan the ratings without reading the more detailed information. Additionally, the crypto community is international and multilingual. You may have visitors who have only limited literacy in your native language, so be sure your ratings can be understood even through a language barrier.
You Need to Stand By Your Ratings
If you’ve chosen a good team, a good set of standards, and good research procedures, you should be confident in your ratings. You shouldn’t change them based on how other sites have rated the same ICO, pressure from the ICO’s team, or a discreet payment under the table. This means you need to own up to your mistakes, too. While most scams can be spotted with proper research, the crypto community has been rocked by a few instances of legitimate-seeming, promising projects turning out to be well-executed exit scams. When this happens, some sites are quick to rush in and change their ratings to lower than before, so they can pretend that they saw it coming all along (as long as no one has any pesky screenshots to prove them wrong).
Admitting your mistakes is an important part of growth. If you give a good rating to a project that your team couldn’t find any flaws in, and it turns out to be a scam, use this as a learning experience. Was there some area of research you had neglected that could have turned up some dirt? Did the scammers use some particularly clever ruse that you can look out for from now on? Integrity stands for a lot in this industry. Stand by your ratings, and stand by your team. That said, also expect the best from your team. If you discover that someone is accepting payments to change their ratings or otherwise engaging in shady behavior, you are responsible for cleaning house. Even one corrupt rater on a team of dozens can tarnish your sites reputation.
Finally, You Need to Spread the Word About Your ICO Listing
There are already a lot of sites out there which list and rate ICOs. If you’re new to the field, you’ll have to work hard to establish a good reputation. The same bans that stop ICOs from being able to advertise on the major social media platforms may impact you as well. In fact, before you expend all the effort to make a rating system for ICOs, ask yourself… “What am I bringing to the field?” Do you have a special area of expertise, or a great idea for how to improve on the existing model? Then go for it! Otherwise, you may want to ask yourself if your talents might be better applied to some other aspect of the crypto industry.
Article Produced By
Yavin is the Founder and CEO at Cointelligence, the data layer for the crypto economy. He has extensive experience as a serial entrepreneur and an angel investor, as well as more than 20 years of experience in the tech industry. Having earned the reputation of crypto expert, On continues to contribute to this industry in ways that advance cryptocurrencies and blockchain technologies. On uses his deep hands-on experience and knowledge of SEO, PPC, and ORM to create successful online marketing strategies for ICOs, crypto, and blockchain companies.