With more than a thousand coins in the current crypto market, there might be an analytical approach to guide us through its diversity. In brevity, this research identifies the four criteria for successful ICO:
- The Expectation of High Return from the Company
- Flexibility of Regulation
- Availability on an Online Platform and Price Transparency
- Social Responsibility
Besides the qualitative analysis, this research shows the key characteristics that can quantify the ICO success probability. The white-paper factor alone can increase the estimation accuracy by 22.4 times. For fraud detection, a generalized extreme values (GEV) model which tracks the presence of a website and a Twitter account in addition to the number of team members and advisors catches some bad intentions.
Unstructured data can also enhance the prediction. A simple bag-of-words approach on Telegram chats seems to be able to generate identifiable sentiment measure on good ICO.
We look forward to a similar analysis of security token offering (STO).
ICO Success Drivers: A Textual and Statistical Analysis, P. Cerchiello, P. Tasca, and A. M. Toma, The Journal of Alternative Investments, 21 (4)