Read time: ≈ 19 min • Last updated: September 16, 2025
Let me be brutally honest about IDOs: 95% of launchpad projects will fail, and most are designed to separate retail investors from their money. I learned this the hard way after losing $14,200 across four failed IDOs before hitting a 27x return on my fifth attempt.
After participating in 23 IDOs across 12 different launchpads, I've developed a rigorous evaluation framework that helped me avoid 19 obvious disasters and identify 3 legitimate gems. In this guide, I'll share exactly how I evaluate launchpad projects in 2025—from detecting red flags to identifying potential winners.
1. My IDO journey: From $14,200 lost to 27x returns
My launchpad investing journey began in early 2023 like most people—filled with excitement about getting in "early" on the next big thing. I allocated $20,000 to spread across 5 different IDOs that all looked promising.
My first investment was $5,000 in a DeFi protocol promising "revolutionary yield farming." The token launched at 3x the IDO price, then immediately crashed 98% over the next week when the team dumped their tokens. I salvaged just $217.
That's when I stepped back and developed a systematic approach to evaluating IDOs. My next investment was $2,500 in a AI-powered trading infrastructure project. I applied my new framework, identified it as high-potential, and watched it deliver a 27x return over 9 months.
The lesson wasn't that IDOs are all scams—it's that 95% are poorly conceived or outright fraudulent, and you need a rigorous process to identify the 5% worth betting on.
2. Launchpad types: Understanding the landscape
Not all launchpads are created equal. Understanding the different types helps you assess the quality of projects they host:
Tier 1 Launchpads
These platforms have rigorous vetting and high-quality projects:
Focus: Established projects with traction
Vetting process: Extremely rigorous
Average ROI: 3-8x (my experience)
Requirements: High staking requirements
My take: The gold standard for serious projects
Focus: Cross-chain projects
Vetting process: Very good
Average ROI: 2-10x (high variance)
Requirements: Moderate staking
My take: Excellent for Polkadot ecosystem projects
Tier 2 Launchpads
These platforms have good projects but less rigorous vetting:
Focus: Diverse projects
Vetting process: Good but some misses
Average ROI: 1-5x (more volatile)
Requirements: Low to moderate staking
My take: Solid but requires your own due diligence
Tier 3 Launchpads
These platforms host riskier projects with higher potential but more scams:
Focus: BSC ecosystem projects
Vetting process: Minimal
Average ROI: -80% to 20x (extremely volatile)
Requirements: Low staking requirements
My take: High risk, high reward—many scams
Key insight: The launchpad itself is a signal. Tier 1 launchpads reject 19 out of 20 applications, while tier 3 platforms accept almost everything. A project on DAO Maker has already passed significant vetting.
3. My 50-point evaluation framework
After my early failures, I developed this comprehensive framework for evaluating IDO projects. I now apply it to every potential investment:
Team Evaluation (15 points)
- ✅ Founders' background and experience
- ✅ Team completeness (technical, business, marketing)
- ✅ LinkedIn verification of team members
- ✅ Previous startup experience
- ✅ Crypto-specific experience
- ✅ Advisory board quality
- ✅ Team token allocation and vesting
Tokenomics Evaluation (15 points)
- ✅ Total supply and distribution
- ✅ Initial market cap valuation
- ✅ Vesting schedules (team and investors)
- ✅ Token utility beyond speculation
- ✅ Inflation mechanisms
- ✅ Treasury management
- ✅ Investor allocation percentages
Product Evaluation (10 points)
- ✅ Working product or MVP
- ✅ Technological innovation
- ✅ Competitive advantage
- ✅ Roadmap realism
- ✅ Technical documentation quality
Market Evaluation (10 points)
- ✅ Total addressable market size
- ✅ Competitive landscape
- ✅ Traction and early adoption
- ✅ Partnership quality
- ✅ Community engagement
I score each category out of 10, then multiply by the weight. Projects need at least 70/100 to consider investing.
4. Team analysis: The most important factor
In early-stage investing, the team is everything. Here's how I analyze IDO teams:
Background Checks
I spend hours researching every team member:
- ✅ LinkedIn verification: I check that profiles are real and match claimed experience
- ✅ Previous projects: I research their past ventures—successes and failures
- ✅ Social media history: I review their Twitter, GitHub, other socials
- ✅ Video interviews: I watch any available interviews to assess competence
- ✅ Reputation checking: I ask in private crypto circles about their reputation
Red Flags
These team red flags immediately disqualify a project:
- ❌ Anonymous teams: In 2025, anonymous teams are almost always scams
- ❌ Fake profiles: Stock photos or stolen identities
- ❌ No technical founder: Projects without technical founders can't execute
- ❌ History of failures: Multiple failed projects without lessons learned
- ❌ Overemphasis on marketing: Teams heavy on marketers but light on builders
Green Flags
These team green flags get my attention:
- ✅ Previous exits: Founders with successful previous startups
- ✅ Relevant experience: Domain expertise in their project's area
- ✅ Technical depth: Engineers with impressive GitHub histories
- ✅ Advisory board: Well-known, legitimate advisors
- ✅ Transparency: Willing to do AMAs and share progress
My rule: I won't invest in any project where the founders haven't built successful products before. First-time founders have a 90%+ failure rate in crypto.
5. Tokenomics: Spotting red flags & green flags
Tokenomics make or break projects. Here's what I look for in 2025:
Allocation Red Flags
These allocation patterns signal trouble:
- ❌ Team allocation >20%: Too much team allocation leads to dumping
- ❌ Investor allocation >40%: Concentrated investor ownership
- ❌ No community allocation: Projects that don't reserve tokens for community
- ❌ Short vesting periods: Team vesting less than 2 years
- ❌ Large initial circulating supply: >40% circulating at launch
Valuation Analysis
I compare pre-sale valuations to similar projects:
• Pre-seed stage: Should be under $10M fully diluted valuation
• Seed stage with MVP: $10-20M valuation
• Product with traction: $20-50M valuation
• Significant revenue: $50M+ valuation
Any project asking for more than these ranges without extraordinary traction is overvalued.
Token Utility
The token must have real utility beyond speculation:
- ✅ Governance rights: Real voting power on important decisions
- ✅ Revenue sharing: Mechanism to share protocol revenue with holders
- ✅ Product utility: Required to use the product or get discounts
- ✅ Staking rewards: Sustainable yield generation mechanism
Key insight: The best tokenomics align incentives between team, investors, and users. Everyone should benefit from the token appreciating, not just early investors dumping on later entrants.
6. Product assessment: Real vs fake innovation
In 2025, most "innovative" projects are just slight variations of existing ideas. Here's how I separate real innovation from fake:
Technology Evaluation
I look for genuine technological advancement:
- ✅ Novel technology: Actual patents or unique technical approaches
- ✅ Technical documentation: Detailed whitepapers with specific implementation details
- ✅ GitHub activity: Active, original code development (not forks)
- ✅ Protocol-level innovation: Improvements at blockchain protocol level
- ✅ Scalability solutions: Real scaling breakthroughs, not just claims
Product-Market Fit Evidence
I look for evidence of real product-market fit:
- ✅ Early traction: Real users, not just community members
- ✅ Revenue: Actual revenue, not just "potential" revenue
- ✅ Partnerships: Real integrations with established projects
- ✅ Pilot programs: Successful pilots with real customers
- ✅ Customer testimonials: Verifiable testimonials from real users
Roadmap Realism
I assess whether roadmaps are realistic:
- ❌ Overambitious timelines: Complex features delivered too quickly
- ❌ Vague milestones: "Improve platform" instead of specific deliverables
- ❌ Feature bloat: Too many features without focus
- ❌ No technical challenges: Roadmaps that don't acknowledge technical hurdles
My approach: I prefer projects that are already generating revenue with a working product, not ideas that might work someday. The risk is significantly lower.
7. Market analysis: Is there real demand?
Even great products fail if there's no market. Here's how I analyze market opportunity:
Total Addressable Market (TAM)
I calculate realistic TAM, not the inflated numbers in pitch decks:
• Serviceable Available Market (SAM): The segment of TAM actually reachable
• Serviceable Obtainable Market (SOM): The portion of SAM they can capture
• Realistic projections: Based on comparable companies' growth
I discount any TAM analysis that claims they'll capture more than 5% of a market in 3 years.
Competitive Landscape
I map all competitors and assess competitive advantage:
- ✅ Direct competitors: Projects solving the exact same problem
- ✅ Indirect competitors: Different solutions to the same problem
- ✅ Competitive advantages: Real, defensible advantages
- ✅ Barriers to entry: What prevents others from copying
- ✅ Market trends: Is the market growing or shrinking
Community Analysis
I evaluate the quality of community, not just size:
- ✅ Engagement rate: Percentage of community that's active
- ✅ Quality of discussion: Technical discussions vs price speculation
- ✅ Community growth: Organic growth vs paid shillers
- ✅ Developer community: External developers building on the platform
Key insight: The best projects create new markets rather than competing in existing ones. I look for projects that are 10x better than alternatives, not 10% better.
8. Launchpad analysis: Which platforms are best
The launchpad itself provides important signals about project quality. Here's my 2025 analysis:
Tier 1 Launchpads
Vetting process: Most rigorous in the industry
Project quality: Generally excellent
Average returns: 3-8x
Requirements: High staking requirements
My allocation: 40% of my IDO budget
Vetting process: Very good, especially for Polkadot projects
Project quality: High but more variable
Average returns: 2-10x
Requirements: Moderate staking
My allocation: 25% of my IDO budget
Tier 2 Launchpads
Vetting process: Good but some misses
Project quality: Mixed bag
Average returns: 1-5x
Requirements: Low to moderate staking
My allocation: 20% of my IDO budget
Tier 3 Launchpads
Vetting process: Minimal
Project quality: Mostly low quality with occasional gems
Average returns: -80% to 20x
Requirements: Low staking requirements
My allocation: 15% of my IDO budget (high-risk portion)
My strategy: I allocate my IDO budget based on launchpad quality. Tier 1 launchpads get the majority of my funds because their vetting does most of the work for me.
9. Post-IDO strategy: When to hold & when to sell
Making money in IDOs requires a clear exit strategy. Here's my approach:
Immediate Action Plan
What I do in the first 24 hours after launch:
- ✅ Price monitoring: Watch order book depth and trading volume
- ✅ Initial sell target: Sell 20-30% at 3-5x to recoup initial investment
- ✅ Team token watching: Monitor team wallets for any selling
- ✅ Market sentiment: Track social media sentiment and news
- ✅ Liquidity assessment: Check if there's enough liquidity to exit
Short-Term Strategy (1-4 weeks)
My approach in the first month:
- ✅ Profit taking: Sell another 20-30% if price reaches 5-10x
- ✅ Fundamental reassessment: Re-evaluate based on post-launch developments
- ✅ Team execution: Assess whether team is delivering on promises
- ✅ Market conditions: Adjust strategy based on overall crypto market
Long-Term Strategy (1-12 months)
For projects I decide to hold long-term:
- ✅ Vesting schedule: Track investor and team vesting schedules
- ✅ Milestone tracking: Monitor roadmap execution
- ✅ Fundamental metrics: Track user growth, revenue, TVL
- ✅ Re-evaluation points: Set specific times to re-evaluate investment thesis
Critical rule: I always sell enough to recover my initial investment within the first month if possible. This means I'm playing with "house money" for the remaining position, which reduces emotional decision-making.
10. Common IDO scams in 2025 & how to avoid them
Scammers constantly evolve their tactics. Here are the most common 2025 IDO scams:
1. The Vampire Attack
How it works: Legitimate-looking project gets listed on good launchpads, then immediately after IDO, the team dumps all tokens and disappears.
Red flags: Short vesting periods, large team allocation, anonymous team members
Protection: Only invest in projects with 2+ year team vesting
2. The Ghost Product
How it works: Impressive-looking product demo that's completely fake—just a frontend with no backend.
Red flags: No technical documentation, no GitHub, no live product
Protection: Always test the product yourself before investing
3. The Community Pump
How it works: Massive community building with paid shillers creates hype, then team dumps on retail.
Red flags: Overemphasis on marketing, low-quality community discussion
Protection: Assess community quality, not just size
4. The Valuation Trap
How it works: Project raises at absurd valuation hoping investors won't notice.
Red flags: High FDV without traction, comparables show overvaluation
Protection: Always compare valuation to similar stage projects
My Scam Prevention Checklist
- ✅ Never invest in anonymous teams
- ✅ Always test the product yourself
- ✅ Verify team identities on LinkedIn
- ✅ Check vesting schedules carefully
- ✅ Compare valuations to similar projects
- ✅ Beware of excessive marketing hype
- ✅ Consult with trusted investors
Final advice: If something feels too good to be true, it probably is. The best opportunities are usually boring fundamentally sound projects, not hyped moon shots.
11. Conclusion: Should you invest in IDOs?
After 23 IDOs and developing this framework, here's my balanced perspective:
For most investors: IDOs are probably not worth the risk. The time required to properly evaluate projects is enormous, and most will lose money.
For sophisticated investors: IDOs can generate exceptional returns if you have the time, expertise, and risk tolerance to properly evaluate opportunities.
For beginners: Start with small amounts on Tier 1 launchpads and consider IDOs as lottery tickets rather than investments.
My current approach is to allocate no more than 10% of my crypto portfolio to IDOs, spread across 5-7 projects per year. I apply my 50-point framework to each opportunity and only invest in projects that score above 70/100.
Have you invested in IDOs? What was your best and worst experience? Share your stories in the comments—we can all learn from each other's successes and mistakes.
Disclaimer: I am not a financial advisor. This is my personal experience and research, not investment advice. IDOs are extremely high-risk investments where you can lose your entire investment. Only invest what you can afford to lose.
FAQ — quick answers
A: The amount varies by launchpad, but generally you need at least $1,000-5,000 to make it worthwhile. Tier 1 launchpads like DAO Maker often require significant staking (usually $5,000+ worth of their native token) to access allocations. Additionally, you should never invest more than 5-10% of your portfolio in IDOs due to the high risk. For beginners, I recommend starting with $500-1,000 on more accessible launchpads to learn the process before committing larger amounts.
A: The average return is misleading because of the extreme variance. According to my tracking of 23 IDOs: 15 resulted in losses (average -85%), 5 provided moderate returns (2-5x), and 3 were massive winners (10-27x). The median return is negative, but the mean is positive due to the few huge winners. This is why diversification is crucial—you need to spread your investment across multiple IDOs to have a chance at catching the few that succeed. The top 10% of IDOs generate 90% of the returns.
A: Access to the best IDOs requires: 1) Staking on tier 1 launchpads: Platforms like DAO Maker require significant staking of their native token; 2) Building relationships: Getting to know project teams before they launch; 3) Joining private communities: Many best opportunities are shared in private groups first; 4) Using launchpad aggregators: Services that track upcoming IDOs across multiple platforms; 5) Staying informed: Following launchpad announcements and crypto news closely. The best opportunities are rarely available to the general public—by the time most people hear about an IDO, the best entry has passed.
A: My strategy involves tiered selling: 1) Immediately: Sell 20-30% at 3-5x to recoup initial investment; 2) 1-4 weeks: Sell another 20-30% at 5-10x if price reaches those levels; 3) 1-6 months: Hold 20-30% for medium-term if fundamentals remain strong; 4) 6+ months: Hold 10-20% long-term for projects with exceptional fundamentals. The exact timing depends on the project's vesting schedules (you want to exit before large investor unlocks), market conditions, and whether the team is executing on their roadmap. I never hold through major token unlocks without reassessing.
This article is informational only and not financial advice. IDOs are extremely high-risk investments where you can lose your entire investment. Past performance does not guarantee future results. Always do your own research and consult with a financial advisor before investing.