Tools of Managerial Decision-Making while Investing in Blockchain Projects

Interviews

№1. "10$ Buffet"

* If it is not a secret, how much do you normally invest in blockchain projects? Is that sum differs from the experimental format? Do investments really happen almost every day?

Normally, the amounts invested in the projects differ from what you may see in our experiment. The number of projects invested is also much smaller. We always follow both the projects themselves and their inner workings, as well as the market situation in general and the volumes of trading.

* Did you consider the idea of stopping the experiment during the bear market?

There were no such thoughts. There was a confidence that a fall always is followed by the rise. Markets cyclical, including cryptocurrency.

* Which projects have become the most profitable in your portfolio for all time?

As you probably know, it is very difficult to say about profitability, if to invest more than once. We have invested for example in Ethereum when it traded both $ 80 and 800. Moreover, to take the exchange token BNB (Binance coin) as an example, it has recently managed to return to the levels of the end of 2017 - the beginning of 2018, respectively. As we have invested in it as well also several times maybe BNB is the most profitable in our portfolio.

* What time period is needed for the experiment to look at things in the crypto world realistically?

It is clear that for a couple of months of the experiment the results will not be valid. It takes time. As practice shows, even on the example of bitcoin, it is a period of 2 years at least. Each new cycle by statistics takes a longer period of time than the previous one.

* We know that in addition to investing in projects that are already traded on exchanges, you have also invested in ICO. Is it possible to compare investments in ICO and post-ICO?

As regards our own investments, ICO experience was pretty successful. But it is probably incorrect to compare the profitability of these stages because time periods of tokens` holding usually differ.

* What withdrawal strategy do you use? Are there any differences in strategy ICO and post-ico strategies of investing?

An Important point is the market situation as a whole. Usually, post-ICO stages are more applicable for long-term investments, ICOs, on the contrary, are considered for quick profits, especially during 2017 and 2018 years.

№2. Ian Balina

* What are the key moments in token metrics you pay attention to while investing in ICO projects?

I always try to start my analysis from the team members of a project. I try to find all the data about them, starting from their work experience, ending with the time of working at a certain place. For me, it is crucial what the company is. If it is a company like Facebook, Microsoft or the experience of founders is associated with the blockchain-related sphere, then this is an all-star project from the team's point of view. The idea itself also means a lot. It has to be not only realistic to execute, but also intriguing and important to the ecosystem. Moreover, I prefer not to invest in projects that collect very large amounts of money, even if it is "EOS" for instance, where everything is good for the rest of the metrics. Of course, such things like token unlocks, the percentage of the circulation supply and many others are also necessary to pay attention to.

* Are there any perspectives for ICO and how long do you think this tool will exist?

ICO is alive and has not gone anywhere. It is clear that it has some drawbacks, a very large number of projects using ICO are scams if to look at the full statistics. In any case, at the moment the tool has gone native, new projects constantly appear. In the blockchain-related sphere, everything happens very quickly, but at the moment the situation is just the way it is.

* Is there a priority according to the metrics for projects selection? For example, will you invest in a project with a top team, but a large period of lock or with no lock, but an average team?

Everything is very individual. Probably there is no clear algorithm, often the solution comes intuitively. In any case, every investment is a kind of a lottery, it is impossible to predict everything accurately. Answering your question, I think that the team is one of the most essential criteria for making a decision on investment, and the presence of a lock is even good for a stable ecosystem of the project, especially in the initial stages.

* Will you continue to invest in ICO projects even in the bear market or would you rather switch to other ways of gaining money?

As you may know, I am not only investing in blockchain projects, I also have my own clothing line, my own music label, I even managed to write a book. While investing it is always needed to be able to diversify the portfolio, do not put eggs in one basket. In addition, beyond the cryptocurrencies, there are other markets and other places for activity. It is never too late to switch.

* When top funds invest in a certain project is that a guarantee for you that it will be profitable?

In fact, once again, there are no guarantees. It is clear that if the big players believe in a particular project it should definitely give it more confidence, but it is definitely not a guarantee.

№3. Interview with Sergey Chmil, Matrix CIB

· Good morning, could you please tell about yourself briefly?

My name is Sergey Chmil, I am a representative of a Matrix CIB crypto fund.

· Could you describe how funds in crypto-related sphere work?

Everything is pretty simple. Investors` money is collected and a large sum goes to a certain project as an investment. All the details regarding the money back process are negotiated beforehand.

· What projects do you choose to invest?

We have a certain algorithm counting the token metrics and other criteria of the project. If a particular amount of metrics is positive, we decide to invest. Moreover, our experience in decision-making processes helps us significantly to operate in such a business.

· Is it possible that the special algorithm accurately defines the best blockchain project?

Actually, nothing can be predicted in investing. However, based on the analysis certain most preferable results can be anticipated.

· You have mentioned metrics which are analyzed by that special system, what are they?

To be honest, there are a lot of them. Every metric has a certain weight which is counted. All of them together give a result. Nothing can be missed out unless the final number will be not valid.

· If to consider human factor while investing in ICO what do you personally consider before to make a decision? Do you maybe have some special strategies?

I would rather share with you the main metrics I personally pay attention to and when I sell my initial investment. My favorite token metric is circulating supply on the moment after the project listing. If this number is 5-8 % this is superb for me. It means that the number of tokens in the circulation is small and the price consequently should be high. Of course, other metrics such as how much money project raise is also important. Speaking about money back period I am a traditional flipper and do not hold any tokens for a long time.

· Do you personally consider the level of hype around a certain project as an important metric to consider?

It depends from times to times. I personally do not take it into account. For me, "hype" is already when funds invest, however, this can be called a good degree of "hype".

· Could you suggest any personal tips which you use while investing and before investing?

I use social media a lot. To know about a certain project in details it is necessary to search not only on the website. Social media such as "Telegram" afford to have different advantages while investing, for instance, if you are an early group member, you can be called a successful participant in a certain project while people who subscribed later have no such privilege.

Appendix 2.

R Code

#Setting the working directory

setwd("D:/YandexDisk/РЦ/Борис/")

#Loading library with Kruskal-Wallis test

library(pgirmess)

#this part of the code is responsible for reading data

data <- read.table('data_cleaned.txt',sep = '\t',header = TRUE,encoding = "ascii",

fill = TRUE, dec = ",", quote = "\"",na.strings = c("-","не объявлено","",

"none","None","Не объявлено"))

#Common information about the whole data frame

head(data)

str(data)

names(data)

# the function was used for each categorical variable to understand how many categories it contains

summary(data[,18])

# data transformation for easy quantification

data[,4] <- data[,4]*10000

#data transformation to bring to the initial units

data[,5] <- data[,5]*100

data[,9] <- data[,9]*100

data[,20] <- data[,20]*100

# delete rows where the dependent variable is skipped

new_data <- data[complete.cases(data[,20]), ]

#Filter for the linear regression

new_data <- new_data[new_data[,20]<1000, ]

# number of observations estimation

dim(new_data)

# histogram - to estimate the distribution of the dependent variable

hist(new_data[,20])

# Mann-Whitney U test

wilcox.test(new_data[,20] ~ new_data[,19])

# Kruskal-Wallis test

kruskalmc(new_data[,20],new_data[,19])

# Spearman correlation

cor.test(new_data[,20],new_data[,16], use="complete.obs", method="spearman")

# calculating the mean values for categorical variables

aggregate(new_data[,20], list(new_data[,19]), mean)

# logistic regression

model <- lm(new_data[,20]~new_data[,4]+new_data[,5]+new_data[,6]+new_data[,7]+new_data[,8]+

new_data[,10]+new_data[,12]+new_data[,18]+new_data[,19])

# logistic regression results

summary(model)

Appendix 3.

Guide for ICO investors

Appendix 4.

Guide for post-ICO investors

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