This repo contains ICOToday's rating system. Inspired by https://github.com/SpacesuitX/spacesuitx
ICOToday Rating System
The ICOToday rating system evaluates companies launching ICOs for three important and critical factors:
- ●● Risk Assessment
- ●● Company Potential
- ●● Community Awareness
These factors will have corresponding scores. The risk assessment will include the Legal analysis since compliance contributes to the risk of the ICO. Below are the scores. The numeric score will be converted to a sentiment based on our algorithm.
- ●● Company Potential - Very Low, Low, Medium, High, Very High
- ●● Risk Assessment - Very Low, Low, Medium, High, Very High
- ●● Community Awareness - Very Low, Low, Medium, High, Very High
Below is the breakdown of what each score means.
Risk Assessment (1 - 10)
The purpose of the risk assessment is to simply inform a user on our platform how likely they are to lose their funds if they choose to participate in a particular ICO. This portion of the analysis will be best performed by a technologist or an analyst with a deep understanding of blockchain technology. Several factors will need to be taken into considerations.
The Team
The team is an important aspect of any successful startup. Therefore, deep analysis and research into every member of the team will be made. Potential Things to consider:
Who is working on this project? Is there a community? For FOSS (Free and Open Source Software), who contributes how when and why? Is it open or controlled? For corporate, non open-source projects, who is the team and what is their track record? Who are the executives behind this? What have they done before? Have they ever managed similar amounts of money and numbers of employees successfully?
Existing Progress and Roadmap
- ●●** Beta or Prototype / Company's Operating History**
What progress, if any, has the company made in building the product that they promise? How many users do they have? Is it just a demo or is it fully functional? Is their code open source? How secure is their prototype?
- ●●** Partner and investor profile**
Who has the company been able to convince to partner together? What is the profile of the partners? Are the partners reputable and credible in the respective industry? Are corporations or vcs participating? Do exchanges list this token or coin? Do companies build businesses around this? Does the project have any major industry or non-industry partners? What is the overall market direction? How about for this type of project? What's the state of the industry? Who is the competition? What is this project's leadership in the space for this use case?
Transparency
- ●●** Token Distribution**
Is supply fixed or limited? How many coins or tokens will be issued? How? Who can change this? Who controls large amounts of coins? What is the real market strength and market cap value?
- ●●** Use and Allocation of Funds**
This is to determine whether the company actually needs the funds that they are raising. Questions to consider: How will the funds that the company raises be used? Is the burn rate too high? Are the costs reasonable?
- ●●** Escrow**
An important consideration while assessing risk is how the funds will be distributed. Are they using a third party escrow agent? Are they using a multisig wallet? If not, do they give a reason?
- ●●** Vesting**
Do the founders and advisors vest their tokens? How long is the vesting period? When is the earliest time after the ICO that the team and advisors can sell their tokens?
Legal Compliance
Is the token a security or is it a utility token? How are holdings calculated? On a public, open blockchain or by a central party? What, if any, is the corporate structure of this project? Is it open source? Are there significant legal risks for any key contributors, managers or entities involved in this project? Is this project legal in the jurisdictions important to you? What user rights (if any) are a natural part of the code?
Compnay Potential (1 - 10)
The Company Potential is a measure of the long term potential of the company. This section will evaluate the likelihood that a company launching an ICO will be successful in their respective market. This section of the analysis will be best performed by a Financial Analyst. Several factors will need to be taken into considerations.
- ●●** Valuation or Market Cap**
- ●●** Size of the Market**
- ●●** Growth Prospects/Development Timeline**
- ●●** Business Model**
- ●●** Product disruption and usefulness**
Community Awareness (1 - 10)
The Awareness and Community score is a measure of the traction that the company has been able to gather. This will gauge the potential of the ICO's success in the short term. This section of the analysis can be performed by both a Financial Analyst and a Technologist. Several factors will need to be taken into consideration.
- ●●** Size of Community**
- ●●** Engagement**
- ●●** Media Mentions**
Analysts are to personalize the factors that they consider while evaluating an ICO.
Score Conversion
The score will be one of five: Very Low, Low, Medium, High, Very High which will be obtained by converting the percentage score to a five point scale.
More information on the next page
Final Rating
The final rating will then be an average of all the different scores. Here is a sample breakdown of an ICOs final rating.
Risk Assessment Score 76%
- ●●** Team 80%**
- ●●** Existing Progress and Roadmap 90%**
- ●●** Transparency 50%**
- ●●** Legal Compliance 95%**
- ●●** Token Utility 75%**
Company Potential Score 79%
- ●●** Valuation 75%**
- ●●** Size of the Market 65%**
- ●●** Growth Prospects/Development Timeline 80%**
- ●●** Business Model 95%**
- ●●** Product Disruption and Usefulness 80%**
Community Awareness Score 85%
- ●●** Size of Community 80%**
- ●●** Engagement 90%**
- ●●** Media Mentions 85%**
**Final Score: 80% **
Risk Assessment: Low
Company Potential: High
Community Awareness: High
Types of Analysts
On ICOToday, there will be two types of analysts: Professional Analysts and Regular Analysts. Following the launch of our public beta and the announcement of our analyst program, we received a lot of applications for the analyst position. However, of the applicants that were qualified, there was a difference between the professional analysts' reports that were relatively longer and had taken 20+ hours of research to those that were about 3-4 pages and had only taken 2-4 hours of research. Both types of evaluations had value depending on what type of user it was. However, the skill and effort that went into both evaluations was significantly different. Professional analysts should be rewarded relatively more than the regular analysts. Furthermore, the application requirements and the barrier of entry to becoming a professional analyst should be relatively higher than that of an ameteur analyst.
Professional Analysts
A professional analyst will be an experienced professional will be one of three types of people: Lawyers, Financial Analysts and Blockchain Experts. They will be experienced individuals in their respective industries with proven track records. Their evaluations will also be significantly longer and take more time to prepare that those of the analysts. Their research will take about 30-40 hours.
Regular Analysts
A Regular analyst will be a knowledgeable individual with deep knowledge of the ICO industry. They will have relevant experience in either a technology, finance or legal field. However, their level of experience and deep knowledge in one specific area will not be extensive. Their reports will not have one single focus. Instead, they will provide an overview of the whole project. The time that they spend researching a particular project will only be about 2-4 hours.
Analyst Selection System
Selecting competent, proven analysts will be a necessary step to creating a great platform.
Professional Analyst Application
The standards for professional analysts will be very high. Any community member interested in being a professional analyst will be required to apply with a resume, portfolio and two sample analysis of an active or upcoming ICOS. To submit the application, they will need to pay the ICT equivalent of 10 ETH. This will create a high barrier to entry to ensure only applicants that are confident in their ability and knowledge will apply.
Verified users on ICOToday will then be able to vote on the applicant's competency. If an applicant receives a 75% vote of approval, they will be authorized to become an analyst. The ICOToken equivalent of 5 Ether would then be given back to the applicant and the other 5 Ether distributed to all voters that voted for approval. However, if an applicant does not get enough votes to reach the 75% threshold, then the ICT equivalent of 5 ETH would be distributed to the voters and the other half going to the company pool for community incentivization so that voters aren't incentivized to vote for or against an applicant since their reward is the same either way. This will limit the number of unqualified members from applying.
Regular Analyst Application
Although it will be relatively easier to become a regular analyst as opposed to a professional analyst, it will still be difficult to become an analyst. Any community member interested in being a professional analyst will be required to apply with a resume, portfolio and one sample analysis of a current or upcoming ICO. To submit the application, they will need to pay the ICT equivalent of 2 ETH. This barrier will ensure that only serious members apply.
Verified users on ICOToday will then be able to vote on the applicant's competency. If an applicant receives a 75% vote of approval, they will be authorized to become an analyst. The ICOToken equivalent of 1 Ether would then be given back to the applicant and the other 1 Ether distributed to all voters that voted for approval. However, if an applicant does not get enough votes to reach the 75% threshold, then the ICT equivalent of 1 ETH would be distributed to the voters and the other half going to the company pool for community incentivization so that voters aren't incentivized to vote for or against an applicant since their reward is the same either way.This will limit the number of unqualified members from applying.
Reason for the Application Fee
After launching our public beta and announcing our analyst program, we received over 300 analyst applications within two days. Although this was a centralized process, we realized that this level of interest was unsustainable once the community was truly decentralized following our ICO. Therefore, the fee creates a barrier to entry to ensure only those applicants that are confident of their skill apply. This will ensure that there are a reasonable number of applicants at any given time. Ensuring that the system is never overwhelmed and resulting in chaos.
How Will the Rating Process Work
Professional Analysts Process
After a company applies to get listed on our platform, every professional analyst will get notified. Professional Analysts will then be able to claim a rating for an ICO based on who responds to the invitation the fastest. Initially, there will only be three professional analyst evaluations per ICO by a financial analyst, blockchain expert and legal expert. The spots will be claimed by whoever submits their analysis the fastest. As more and more analysts join the ICOToday platform, the number of professional analyst spots per ICO will also proportionally increase.
Regular Analysts Process
After a company applies to get listed on our platform, every regular analyst will also get notified. The regular analysts will then be able to claim a rating for an ICO based on who responds to the invitation the fastest. Initially, there will only be five regular analyst evaluations per ICO. Similar to the professional analysts, the regular analyst spots will be claimed by whoever submits their analysis the fastest. As the ICOToday platform grows and more regular analysts join the platform, the number of regular analyst spots per ICO will also proportionally increase.
Weight of Score
The weight that an analyst's rating will have will be determined by two things. One, the comprehensiveness of their reports as determined by the community of users on our platform. Two, a quarterly review of the post-ICO performance of all ICOs that they rated. These two factors will contribute to the weight of a particular analysts score.
Final ICO Rating
The final rating for an ICO will an average of all scores from the professional analysts and the regular analysts. However, the ratings from the professional analysts will contribute for 50% of the score. The regular analysts will then contribute to the other 50% of the score.
Compensation
Professional Analysts Compensation
Professional analysts will be compensated in two ways. One, they will receive a percentage of the fee that the company pays to get listed on the ICOToday platform that will be proportional to the weight of their score. Two, professional reports will only be accessible to users who pay using ICT. The reports will have a value of the ICT equivalent 0.05 ETH or around $15 USD which will be distributed to the professional analyst that contributed to the report.
Regular Analysts Compensation
Regular analysts will be compensated by receiving a percentage of the fee that the company pays to get listed on the ICOToday platform that will be proportional to the weight of their score.
Inspiration and some aspects of our rating system were taken from https://github.com/SpacesuitX/spacesuitx/blob/master/README.md