Evaluating a Crypto Project
Top 10 criteria to evaluate a project
I highlight the top 10 criteria to consider during your evaluation for any Crypto Project.
Use-case. Look at the website and documents (whitepaper, gitbook, medium etc.) to determine the use case. Is it solving a problem? Does it provide value? Do people have a need for this product? Does the project have partnerships with existing projects?
Investors/advisors. Who are they? Do they have a good track record for supporting projects and don’t use other people for exit liquidity? Does their expertise fit well with the project? Anon vs doxxed is meaningless because reputation is attached to the sum of one’s actions.
Core team. Who are they? (Again, anon vs doxxed is also meaningless). Do they have the right skill set for the project? Do they engage with the community? Being on the project’s Discord helps you get a feel for the team and what they are like.
Marketing. Today, marketing is just as important as product development. Is the team present on social media and use available channels (AMAs, Twitter spaces, etc) to advertise the project? Do they communicate well and effectively?
Tokenomics. What is the token distribution? Do the investors and core team have enough percentage of total supply? This helps maintain token price health. What is the vesting schedule? Most importantly, does the token provide income or utility for the project instead of simply being a governance token that will be dumped? If it is a governance/rewards token, are there mechanisms in place to prevent it from being farmed and dumped?
Valuation model. When buying a token early, you want to make sure that the current value of the token is fair when considering the circulating supply vs the fully diluted valuation.
Community. Is there an active community? Does the community actively engage with the project? Does the community act as ambassadors for the project? This shows that people believe in the project enough to share it with others.
Competition/Niche. If this isn’t a new idea, how are the competitors performing? What edge does this project have over the competition? How did competitors perform from the initial release to the present day? Is the niche popular and something that users want?
Use the product! If the product is already released, go use the product and get a feel for it. If the product isn’t released, projects sometimes allow Discord members to test out the Beta version in order to get feedback - so be sure to look out for these opportunities.
Regulatory Risk. You should evaluate the regulatory risks of a project considering that government conversations are currently taking place around the rules regarding the classification of tokens as a security.
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