Since the initial coin offering (ICO) sector first took off in 2017, there has been a steady growth in the amount of funds that have been invested in these projects. It proved to be a great alternative to venture capitalists and more people were able to get access to startup funding of this kind.
However, the main issue was that a lot of the token sales could not be trusted. There were so many scams and people being defrauded of so much money that it led to a lot of people stopping investing their funds in these offerings. For example, there was a report issued by the folks at Ernst and Young which showcased how more than 10% of the funds invested in ICOs during 2017 were stolen.
This was largely due to the little to no governance or regulations which were in place on the sector. This was down to the authorities being caught unawares when it came to the sudden popularity of ICOs. Thankfully, they are now finally getting to grips with the sector.
What happens next?
Investors are also becoming more attuned as to what the warning signs are for a potentially fraudulent offering. There are some tell-tale signs and those fraudsters needed to become smarter and sharper to reap the same rewards as they once did.
There are many ICO ratings agencies out there that investors rely on, but often times ICOs can pay their way to favourable ratings, rather than having their offering objectively scored. Now there is a new platform called ICO All-in which is aiming to offer a solution to the tricky ICO sector. This a system for rating ICOs which is reliable and where contributors are able to access token sales which are free from scams and ones that are not very popular.
Everything from the strength of the whitepaper to the verification of the team members and other significant variables are looked at in-depth to come up with a viable conclusion. It was created by those with experience in both the traditional finance world and the blockchain space.
This means that all of the bases are covered, especially now that more and more institutional investors are looking to get involved in the space. They have largely been placing their funds in more established companies’ offerings, because they know they are legit. However, a platform such as this one will allow institutional investors to start pumping money towards those less prominent ICOs without fearing that they could be scams. This could benefit all parties in the long run.