Initial coin offering participants depend on several sources of information when performing due diligence. The initial coin offering whitepaper is one of the most vital source of information for due diligence. Specifically, the whitepaper of an initial coin offering contains all crucial information such as an overview of the technology, system architecture, and other elements of the initial coin offering as well as the business itself.
In fact, the whitepaper of the initial coin offering is the company’s business plan. Many companies also release different papers that are subjected to further details for people that want to go through the deeper business or technical aspects of the company.
The whitepaper enables prospective investors to examine the legitimacy of the project. Reading the whitepaper of an initial coin offering is one of the very first things you need to do to reduce the risk of losing your investment.
However, with a lot of new cryptocurrency ICOs being held every month, how can you tell if the whitepaper of an ICO covers all the important technical, business, and commercial factors that are needed? So as an ICO supporter, you need to make sure the whitepaper of an ICO covers all the necessary information you need, as this will play a vital role in your decision-making process. Listed below are some vital aspects that should be covered in the whitepaper of an initial coin offering.
- The information of the company
- The problem the company wants to solve
- The proposed solution to the problem
- Description of the product
- Statistics and diagrams
- Token commercialization or implementation
- The value of the token
- The distribution of the token
- The differentiation of the token
- Sale mechanism
- Team composition
- Other stakeholders
- Analysis of competitors
- Use of funds