Is it worth investing in an ICO to earn passive income?

If you are going to invest in an ICO, first of all be reasonable with your expectations. According to the latest data, in 2018 76% of ICOs held have brought only losses to their investors. Some of these projects turned out to be just scams, others were not able to offer successful tokenomics to the market or simply overestimated their technical or organizational capabilities. Risk of suffering losses in an ICO industry is very high now. If you want to know how to weed out deliberately fraudulent projects and select the most promising from bona fide ICOs, read our article "How to choose an ICO project".

In this article we want to talk about something a bit different: is it worth investing in an ICO in the hope that a simple token purchase will make you rich? And are there other options for interaction with an ICO projects unless simply waiting for it to “skyrock” or not.


Typical investment model in an ICO

Let’s take an example of classic investment in an ICO: one has means to invest and wants to multiply it by buying promising tokens. What can increase value of purchased cryptocoins?

1. If an ICO project has held a good PR campaign and managed to attract interest of many investors, it makes sense to purchase tokens at pre-crowdsale when they are sold with a bonus. Then these tokens can be already resold at a higher price to main crowdsale’s participants. The difference in token’s value on pre-trade and main sale will make up your profit. Approximate time frame for profit-making is about ​​several months.

2. Suppose an investor bought tokens at main sale without a discount. In this case he can take his time and see if an ICO-project would manage to create a well-prepared tokenomics and the demand for its tokens from cryptocurrency community would rise over time then their cost will grow. Investor by himself chooses the moment when to take profit and sell tokens. Approximate periods of profit-making in this case can range from months to several years. And of course, token’s value can’t only grow, more often it decreases.

There are other options for earning passive income from owning tokens: creation of masternodes, transactions approval in blockchain networks basing on "Proof-of-stake" principle, etc. 

All classic options to earn passive income from investments in an ICO are based on shaky "if." If tokens are in demand, if project is successful and so on and so forth. As statistics show 70-80% of ICO projects do not succeed.

One of the global cause of this is contradiction between token's functions as a means of investment and as means of payment. In case of tokens value increase, it’s unprofitable to put them into work. But if they won’t be in circulation, project's tokenomics may be affected which in the long run will lead to token depreciation - a vicious circle.

An "active" investment in an ICO on Rocket ICO platform

RocketICO platform is based on the principles of Decentralized Autonomous Organization (DAO), which brings investor and ICO-project team’s interaction to a fundamentally new level. In DAO each participant has an opportunity and seeks to help other members of community because he benefits from each of his useful actions within platform which is guaranteed by smart contracts. 

Unlike traditional investment model, on Rocket ICO platform micro-investors can get digital assets not only for their financial contribution to project but also for every action that is useful for the team: sharing experience, help in searching the right contacts, etc. Rocket ICO participants are seen as having mutual beneficial activity rather than passive accumulation of tokens, as in classical model.


Advantages of an "active" investment in an ICO

Rocket ICO platform model gives ICO backers the following advantages:

  1. Ability to contribute to the success of a chosen ICO project by helping project team with all knowledge and skills available. This makes backer an actual member of an ICO team rather than a passive observer of market quotes. Really this is a highly valuable experience and great opportunities.
  2. To make a significant profit from classic investment in an ICO you must allocate considerable funds (which by the way not everyone has) to buy tokens and also put these funds at risk. In case of Rocket ICO platform entry threshold is minimal and your further success as a backer or an expert depends entirely on you.

Join Rocket ICO project and become an active backer and community member, participate in the game-changing startups and let the latest technology completely change existing market rules.