An Investment rating is one of a number of tools that a potential investor can use when deciding to purchase (or not) cryptographic tokens from startups launching their own blockchain-projects.
Such ratings are intended to contribute to the development and functioning of the ICO market. These ratings reflect an independent opinion on projects’ investment potential, an opinion formed using a uniﬁed terminology database. This allows investors to make an as informed decision as possible.
ICOrating provides independent investment ratings and analytical materials that are created by bearing in mind the speciﬁc requirements of a project within a global setting.
From time to time we update and improve the methodology used in the rating process for it to remain in step with the current market changes. This allows us to draw insightful conclusions and help market participants make highly-informed decisions.
A rating scale is the basis for the relative assessment of an investment’s attractiveness, with those who issue a start-up’s crypto-shares then judged based on that attractiveness.
Ratings are prognostic by nature
As a part of its investment analysis, a rating agency examines information that is currently available, as well as evaluates the potential impact of anticipated future events. For example, when determining the rating of a startup, a rating agency can take into account the development dynamics of the sector in which the project intends to implement itself. It should be noted that rating agencies’ projects can be useful to investors and other market participants deciding on long-term and short-term investments alongside other business decisions. However, investment ratings are not a guarantee that the investments will pay off.
Ratings are the reflection of ICOrating’s views about the investment attractiveness of the issuers (blockchain start-ups). The basic characteristics are:
|Investment level:||startups with ratings from this category (Stable, Stable +, Positive, Positive +) have reasonable potential for growth and development, both in the medium and long term. They are attractive for investment||Speculative level:||this category is marked by a high degree of uncertainty in relation to the project’s development dynamics in the medium and long term, due to either individual features of the startups, or, characteristics of the industry (-ies) in which the project is operating.|
|Non-investment level:||projects in this category are characterized by a large number of "red flags" that may affect not only the dynamics of the project, but also its very functioning.|
|Default level:||this category is typical for startups whose projects are not only experiencing a strong downward pressure from market forces or individual structural problems that lead to rapid outflow of users, but a large number of critical problems with their business model or technical base.|
Note: Investment ratings are not an absolute guarantee that the project’s potential will be developed.
As future events and trends are not always predictable, assigning investment ratings can not called an exact science. This is why the opinions of ICOrating’s experts, which underpin the assigned ratings, should not be considered an investment guarantee of quality or a precise deﬁnition of a project’s potential to fail.
JUST AN OPINION
The investment ratings of ICOrating are based on analysis that is conducted by experienced professionals. They evaluate and interpret information received from token issuers and from other available sources, enabling ICOrating to make an informed opinion.
Contrary to the views of a doctor or lawyer, the analysts’ opinions, upon which the investment ratings are based, are not a recommendation or forecast. The main purpose of these ratings is to inform investors and other market participants about the relative level of investment risk which projects that issue cryptographic tokens are exposed.
While determining an opinion on investment risk, we rely on expert conclusions and analytical models. Analysts receive their information from public sources, published reports, as well as when talking with a project’s management team.
To determine the investment rating of a project, ICOrating assesses its ability and willingness to fulﬁll its commitment to the development and promotion of their product. In addition, speciﬁc risk factors that startups are subject to, because of the nature of its activities, are also analyzed: the practice of management, the level of developers skills, quality and structure of the code or prototype, marketing, media and more.
At the same time, there is a big focus on the project’s business model, the professionalism of the development team, the quality of the technical side’s development and the potential audience demand of the product in the medium to long term.
Factors ICOrating considers when determining a startup’s ratings:
Factors that deﬁne the project ratings can be both generic and more speciﬁc, those which are speciﬁc to a particular industry or project. While some risk factors are common to all projects (a growing number of competitors, reduced quality of technical resources), others may only affect a small, niche group of startups.
If ICOrating has information that it believes merits the need to change the rating, it may increase or decrease the project rating.
Modiﬁcation, reverse engineering, reproduction or distribution of content (including ratings, investment analysis results and data assessment, models) completely or partially, in whatever form or by whatever means, and storage of data in databases and search engines, without the prior permission of ICOrating or an active link to the source is prohibited.