Author: Isabelle Yeo
With the heavy influx of Initial Coin Offerings (ICOs) rolling in, finding a good project to invest in is akin to finding needles in a haystack.
To invest, or not to invest: that is the question investors often find themselves puzzled with. Luckily, it seems that we can now bypass such a challenge with the help of WINGS.
WINGS is a DApp running on the Ethereum network where people are able to curate ICOs, providing forecasting results to advise investors with accurate valuation forecasts from the community.
Block Asia managed to catch up with co-founder Dominik Zynis yesterday to learn more about the system.
“When we first started out, it was very experimental. The majority were wrong about the valuation of the first ICO project. However, if you look at the top 50 accounts, they were spot on. These were the top holders,” Zynis explained.
He added that after having gone through 30 to 40 ICOs, there is a statistical difference between simply seeking opinions from the entire crowd and asking users with high forecast ratings to predict high-value proposals. The latter is statistically more accurate, he said.
In the future, WINGS also plans to include a feature that enables the crowd to predict the price of an ICO after it has ended. While this may be a volatile category, Zynis believes that the data will only become more precise with time.
Zynis also spoke of the future of ICOs, “I personally believe that by 2025, there will be a million ICO projects per year. The reason for the surge in popularity is because traditional funding markets like banks have given up on funding entrepreneurs.”
“It was their job 20 years ago, but giving micro loans to startups is not as prevalent now. ICOs are like IOUs, and they are filling the gaps of banks.”
When it comes to regulations, Zynis explained that the basic fundamentals of ensuring a registered business are extremely important. However, it is ridiculous to him that some businesses are mandated to have paper trails that cost more than the actual businesses themselves.
“Businesses are being made to do all these paperwork just to establish a website. If there is an outright fraud, investors can go to the police anyway. Coin or not, if you get ripped off, you can report them. With coins, it is at least traceable.”
While it is an idealistic mentality, the problem lies in the fact that not many investors manage to get their funds back. Identifying scam cases can prove to be difficult, especially for greenhorn investors in the making. “Making investments is a risk in itself. Some businesses will flourish, and some will cease to be. This is why educating yourself and keeping up-to-date with news are extremely important,” he responded.
During the interview with Block Asia, Zynis also emphasised on a certain feature that promotes accountability in the forecasting system. Forecasters get rewarded with more forecast points and project tokens the closer they are to predicting the actual outcome and valuation of ICOs. “From an investor’s’ standpoint, one can ignore users with only four forecast ratings and pay attention to someone with 400 forecast ratings instead, especially since all the data is public on the Ethereum platform,” Zynis explained.
A user’s forecast rating increases or decreases after the forecasting rounds, and also based on the token holder’s forecast activity. The higher the accuracy of the forecast, the more ratings a user will attain, and vice versa. There is an equilibrium point for each forecast where the rating will not change at all.
“This provides incentives for users to maintain accuracy in the forecasting system,” Zynis illustrated.