The advice from blockchain developers and engineers who are using tokens to incentivise growth of the networks they are building is to avoid the hype.

The initial coin offering (ICO) is exploding and many people think we are entering bubble territory, with SEC intervention imminent. Industry insiders who are building new networks and using various forms of tokens to raise capital and incentivise users were on hand to discuss best practice at the packed out Token Summit at NYU.

It's hard to say how much speculative fiat money is pouring into ICOs right now, but while it's an exciting honeymoon period, many projects being backed by millions of dollars in minutes will ultimately fail.

With this in mind, Richard Craib, CEO of Numeria (a hedge fund that uses a token to incentivise data scientists to do machine learning and predict stock price movements), said: "I think it's great to have things instantly funded and finacialised. I think it's the investors who should get smarter."

Ankur Nandwani, CEO, BAT, who was on the same panel, listed some things to watch out for. He made the point that some projects have more advisers than developers. Typically, startups will start asking around the Ethereum community for advisers to add some gravitas to their proposal; the potential adviser might ask for 3 or 4% of the tokens in return for their services. "And if someone is offering to be an adviser to your project, say no; you don't want those type of guys," he said.

Another thing to watch for is reservation contracts, which means there will be X tokens billed for a sale but some are reserved for people in the crowdsale, said Nandwani. "I think continuous distribution of tokens is important; you can sell a fixed amount and then slowly distribute the rest."

It is an exciting time; the panel agreed that the token sale world was reimagining the whole venture capital domain. Andy Milenius, founder of Maker, said: "We live in a capitalistic society where for a long time VCs have been the ones who know how to capitalise on good ideas. Now the public can also learn what makes a good idea worth investing in – possibly learn the hard way."

On a previous panel, Joey Krug, lead scientist at decentralised prediction market Augur (one of the earliest token sales to take place after Ethereum) said they had decided on a token sale rather than VC routes because the latter would mean ultimately compromising the consensus of the system.

He said: "If we sold to VCs – not so much at the seed round but later at Series A and B, these companies would have ownership and we need a more distributed ownership."

However, Krug said the same sort of stringency that applies when looking for funding from VCs should apply in the token sale world. "Like with VCs, if you turned up with just a white paper they would laugh you out the door – it should be the same with crowdsales."

Juan Benet of the iconic IPFS decentralised storage platform announced that his team had surveyed the legal landscape around token sales and was launching SAFT (Simple Agreement for Tokens), and CoinList, which will help startups progress with a sale (earlier in the week at Consensus, Anthony Di lorio, the CEO of Jaxx, also talked about a grading system for ICOs with three tiers that he would be announcing soon with Bitcoin pioneer Charlie Shrem).

When asked about the marketing channels and strategy for doing a crowdsale, Milenius said that most appropriate place to find out about interesting projects is probably Reddit, to which the rest of the panel agreed. Any project that is tweeting aggressively at the early stages, you should be sceptical about; the likelihood is that it's a bot.

Milenius pointed out that Maker chose not to do a crowdsale. He said much of the speculation that comes with sale is not about the underlying technology. "It's important to be sure the right sort of people are attracted to technology, and not the hype. For us, lack of hype was a deliberate strategy. I think it's important that people are in this for the long haul."