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ICObazaar Rating System

Overview of Methodology

The goal of the ICObazaar rating system is to be able to provide a rigorous, in-depth, and independent grade for any given project running an ICO in order to help potential investors make more informed decisions. 

Summary

The rating system consists of a weight adjusted formula with five factors, each of which evaluates some separate aspect of the project/ICO -- the weight of each factor was determined by ICObazaar’s experienced blockchain and finance professionals and reflects the perceived relative importance of each one. The sixth factor consists of the rating score (on a scale of 0-5) made by an industry expert advisor/investor separate from the ICObazaar team. Each of the five factors that ICObazaar evaluated is described in detail below in our methodology. 

Disclaimer

Please note, though the ratings provided are based on real, in-depth analysis, they are not intended to be forecasts or predictions. The main goal for establishing this evaluation system is to provide investors with reliable, systematic, independent assessments of each potential investment to help them better understand the risks and potential profits involved and make more informed investment decisions. 

Our rating system is subject change. Any changes or updates to the methodology will be published accordingly.

Rating methodology

The ICObazaar rating system is intended to evaluate the overall quality and viability of the product, team, and technical implementation behind any given ICO. In order to formulate a grade for any project running and ICO, we evaluate each by examining the following five factors:

  1. Project Idea + Whitepaper
  2. Team
  3. Media + Community
  4. Technical Implementation
  5. Website

Each of these five factors are rated on a 0-5 scale and a specified weight is given to each of them. As stated above, the sixth factor is the rating score(s) (also on a 0-5 scale) provided by one or more industry experts according to their individual criteria, independent from ICObazaar’s criteria and methodology. The expert factor also has a specific weight and limit, described below. 

Weight-Adjusted Formula

ICObazaar uses a weight adjusted formula to rate ICOs. Each of the above six factors has its own specific weight (in decimal form), the sum of which is 1. The formula summarizes each of these six factors to produce a single grade for each project running an ICO.

 

The formula is as follows:

Where

W= weight and

R = rating

Below are the descriptions of what we consider in the evaluation of each factor:

 

(R1) Project Idea + Whitepaper

      • Financial plan
      • Roadmap
      • Structure
      • Technical explanation
      • Use of token
      • Product Relevancy
      • Product (is there an MVP)
      • Quality of product/idea presentation (marketing)

(R2) Team

      • Level of experience
      • Publicity/transparency of team members
      • Offline presence
      • Quality of advisors/partners

(R3) Media + Community

      •  Media presence
      • Size of online community
      • Quality Web/Social presence

(R4) Technical Implementation

      • Market dynamics
      • Escrow
      • Accessibility of Smart Contract
      • Type of blockchain

(R5) Website

      • Number of localizations (market reach)
      • Presence of legal terms and policies
      • Overall quality

(R6) Expert rating

      • This rating is created by individual experts in blockchain and finance whose evaluation criteria and methodology is their own and operates independently from ICObazaar.

The expanded formula is as follows:

Grade = ICObazaar rating W1 x Expert rating x W2

or

Where

W1= weight of ICObazaar rating and 

W2= weight of Expert rating

w= weight of each factor, as determined by the ICObazaar team

 

Grades and Rating Descriptions

Grade

Rating

Rating description

5

AAA

Prime

Investment Grade

4.5

AA

Upper Medium Grade

4

A

3.5

BBB

Lower Medium Grade

3

BB

Speculative

Speculative

2.5

B

Highly Speculative

2

CCC

Substantial risk

High risk

1.5

CC

Extreme risk

1

C

Minimum chance to success

Default

0.5

DD

Default

0

D

Description of Major Rating Categories:


Investment grade - Projects within this category have extremely strong potential for short and long term growth. Investments in these projects have a reasonable potential to return profit.

Speculative - The development and positive growth of projects within this category is uncertain. Investment in these projects is considered risky, however there is a chance that said investments will give return. 

High Risk - Projects in this category should be considered very risky investments. Some element of the project, team and/or ICO implementation is severely lacking in quality. The chances of projects in this category developing positively in the short or long term are very low.

Default - Projects in this category are major investment red flags. They have critical problems with their business model and/or technical abilities. There is a minimal chance that projects in this category will develop profitably. 

Full review

Every project listed on ICObazaar receives the above described evaluation. In addition to this systematic evaluation, projects can also chose to receive a full review. A full review consists of an extremely thorough overview and audit of the project, ICO, and Smart Contract(s), the result of which is a 15-20 page report. The review is performed and written up by an industry expert and verified by ICObazaar.