The idea of cryptocurrency coins being presold has lured startup projects for viable fundings and people with malicious intent alike. That idea is called ICO, an abbreviation to initial coin offerings in which projects offer units of tokens in exchange against cryptocurencies like Bitcoin or Ethereum (Ameer, 2017). Here are some tips to avoid scam projects, other than studying whitepapers and reviewing the project team.

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Comparing the token distribution plan with other projects is a simple first step. If tokens are distributed disproportionately favoring the development team, red flags should be raised (Kikan, 2018). Also check for plagiarism because cases has even shown whereby scam projects blatantly copied anything from websites to whitepaper (Town, 2018). One should also understand the underlying tokenomics (token economy) of the project by looking at the market model and comparing fund allocation to other successful projects to gauge it's viability (Kikan, 2018).

It is thus important to do your own due diligence before committing yourselves to anything. Never be afraid to scrutinize and double check on information that may seem suspicious.

Reference
1.) Ameer, R. (2017). What is An Initial Coin Offering? Raising Millions In Seconds. Blockgeeks. Retrieved 30 April 2018, from https://bit.ly/2KnQq6t

2.) Kikan, R. (2018). Want to Invest in an ICO in 2018? Here's All You Need to Know. www.entrepreneur.com. Retrieved 30 April 2018, from https://bit.ly/2HZJHkR

3.) Town, S. (2018). The Seven Key Signs of an ICO Scam. CryptoSlate. Retrieved 30 April 2018, from https://bit.ly/2H0EUvS

4.) DeCleene, J. (2018). 6 Ways to Spot an ICO Scam – Data Driven Investor – Medium. Medium. Retrieved 1 May 2018, from https://bit.ly/2rblKgR


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