Methodology of Rating Assignment
ALFA Rating is guided by its independent opinion about the investment attractiveness of the estimated asset during the assignment of investment rating. In this there is an independent and evaluative judgment, reflecting in the investment report. On such aspects as:
- Business - a model of the project;
- Economy of the token;
- Market size and competitors;
- The project team;
- Marketing strategy after project launch;
- Marketing strategy ICO;
- Project Partners;
- The main risks of the project;
- The main risks of the investor
(except legal and technological risks of the project, which exist in all crypto-currency assets described in Warning).
As a result of the judgement, according to the appl #1 of this methodology, there is one of the estimates “-1”, “0”, “1” which is given for all analyzed aspects of the project. During the overall review and rating assignment, the employee of ALFA Rating checks the veracity of all figures, provided by the project team. It is also important to use all topical and authentic sources of information which are freely available for employee.
As a result of the made qualitative analysis, the project is assigned one of 3 ratings: “Spec”, “Invest” or “Flat”.
“Spec” is for projects, not only with high-risk business models, but also with correctly-built token economy and possible high demand for the project services or the token economy, which can promote the increased volatility of the token.
“Invest” is given for the projects, which has no significant legal or implementation risks, expect the risks that all crypto-projects have and if there is expectation of the positive dynamics of the token growth during the development of the project after its commissioning. At the same time, the projects with "Invest" rating, according to the results of the quantitative analysis, get an estimate "+" (the expected profitability of the project is better than the market) or "++" (the expected profitability of the project is much better than the market).
The rating "Flat" is assigned to projects without investment appeal for investors or which projected profitability does not correspond to the risks that the investor will have to accept at the time of purchase this asset. Moreover, this rating is assigned to an instrument which economy does not contribute to the increased volatility of the token.
The method of making a quantitative assessment and assignment of additional rating.
According to the results of the qualitative analysis of the project on the aspects, which we can see in Methodology of Rating Assignment of ALFA Rating, there is an estimate "-1" to "1" for each analyzed aspects of the project, based on the expert opinion, depending on the influence of the analyzed parameter characteristics on the investment the appeal of this token.
"1" - corresponds to the positive effect of the characteristics of the analyzed parameter on the investment appeal of the token.
"0" - corresponds to the absence of a positive or negative influence on the investment atppeal of the token.
"-1" - corresponds to the negative influence of the described characteristics of the analyzed parameter on the investment appeal of the token.
After making quantitative assessments for the analyzed project parameters, these estimates are thought over, according to the effect of each parameter on the investment appeals of the token, and then they are summed to obtain the final coefficient.
The weight of each parameter is established relying on a quantitative analysis of these ICO parameters and their influence on the further dynamics of the price movement of the token.
According to the results of qualitative analysis, all projects with "Invest" rating should have a positive estimate based on the results of the quantitative analysis.
Therefore, the rating can have one of the additional meanings "+" or "++", which expres a positive expectation regarding its investment appeal relative to other projects with assigned investment rating.
The meaning expressing this expectation is assigned based on the meaning of the coefficient obtained as a result of weighing and summing the parametres` quantitative estimate, which we can see in the Table.
|Estimate||< 0,33||0,33 – 0,66||> 0,66|
Confirmation, review and a comment of investment rating
ALFA Rating carries out the procedure of reviewing or revising the investment rating every six months, starting from the end of the semi-annual period after finishing of the ICO procedure of the estimated project.
The comment of the rating is due to the refusal of the project to do a procedure for confirming or revising the investment rating within the prescribed period.
In the process of rating revision, ALFA Rating employees analyze the data with information of the activity and results of the project team's activities within the stated deadlines. Moreover they analyze budgets and goals since finishing the ICO procedure and / or since the previous procedure for reviewing the rating assignment.