It is advisable for one to conduct their own research regarding ICOs and their limitations or advantages as the internet is not a good financial adviser when it comes to how one should handle their money, however, a quick overview of the way an ICO works, its token economics and its white papers is a good dive into what the ICO stands for.
One of the upcoming ICOs that exist today is LiquidityNetwork that wants to tackle blockchain scalability via an off chain payment ecosystem. There is no hard cap for this project as its doing a Dutch auction. It is going to have a hundred million tokens as its total token supply and 65 percent of those tokens are going to be sold in its crowdsale. What is commendable about this project is firstly the fact that it has a working product with a well designed website that offers loads of perceived value for new investors. Secondly, it serves to offer a decentralised liquidity exchange for off chain atomic swaps. An atomic swap is just a smart contract that enables the exchange of one cryptocurrency for another without the use of intermediaries.
Another thing to be aware of with this project is that payment networks such as a Lightning require collateral that has to be locked up. Unlike Lightning and Raiden Network, liquidity network actually makes use of chain hubs so deposits are not held on chain which can often be quite expensive.
The downsides to this ICO particularly target its token economics and hype. If one analyses its team one finds that it scores quite low on it as they are just a two man team according to their website. The website also states that the project will be releasing information about its future members gradually so that can only be analysed in the future when it is actually out in the open. Moreover, when it comes to token economics they are using a Dutch auction model and the issue with that is the question of why the investors would pay more now when they can simply pay less when it hits the exchanges. Furthermore, another place where they lack is the hype which is confusing as if one takes in consideration the fact that it is a very promising project, why is no one talking about it. The fact they are offering off change scaling solutions should mean that they have a bigger hype. However, their hype has been going upwards in the last few weeks and once this ICO gets on the way, one can definitely expect the hype to increase.
Keeping all that in mind, it is essentially up to one’s own self whether they choose to invest in an ICO or not. Research, analyse and approach with caution. The world of ICOs is your own playing field and whatever way you choose to venture out in it, make sure you are fully equipped and motivated before doing so.