Crypto Project Research: The Investor's Guide

I was inspired to write this article because of the requests and questions that I keep getting from my students, friends, and colleagues. Everyone around keep asking what's the BEST Crypto project to buy or invest in? what's your take or projection for this project? Is this a good project? and the rest.

However based on my personal convictions and philosophies I don't like to give straight answers to such questions because My Risk level and Investment Plans, might be totally different from yours, hence the reasons for writing this article.

I strongly believe the Insights, Principles and Knowledge you will get from this article will guide you to make smart investment decisions on any Crypto asset/s of your choice.

We are still early in the game and the Crypto economy will continue to fuel the Web3 Economy, however not all the Crypto assets or project/s will do this...

"Those with VALID use cases shall live and prosper and those without VALID use cases shall perish..."

Crypto Project Use Cases

"What is the Coin/Token going to be used for"

So the big question is, why should you bother about understanding the Use Cases of a Crypto asset, as a Trader or as an Investor?.

The main goal of Crypto assets Research, Use Cases and Fundamental Analysis is to reduce the Investors' risk and evaluate the profit potential of the asset to ascertain if the Crypto assets are Overvalued or Undervalued.

Use Cases answers the questions about "What is the Coin/Token is going to be used for". For you to be a profitable Crypto investor you need to have an in-depth understanding of the use cases of any project that you want to invest in. Use Case is an aspect of Token Economics (Tokenomics). Tokenomics studies the economics and real value of a Crypto token, the Crypto token's objective, functionality, allocation policy, etc.

"Use Cases helps the investors to see the End from the Beginning of any project".

Use Cases is like the investor's microscope. It helps investors to be in the present and enter into the future and see the overall picture of the project.

A good understanding of the Use Cases of any project will help you to make smart decisions on the project in the midst of a crisis or market crash. Use Case deals with the novel solutions that the project is solving in the ecosystem or in the real world. The application of the project or products in the industries, the social and economic impacts, etc. Use Case is all about the Project Potentials, which gives you a realistic overview and ceiling for the project, its applications to the Ecosystem, and insights if the project is tapping into a market that's yet to be disrupted by Crypto (novel project) or how much value will this project really offer versus existing solutions out there.

"To clearly understand use case you need to understand the problem/s the project is solving and determine if their solution is Valid, Novel or Unique"

Evaluation of the Key Metrics

These are some of the key metrics you should look at or pay attention to when studying the Use Case/s of any Project:

• Project White Paper
• Market Capitalization(Market Cap)
• Circulating Supply
• Exchange Listing
• Project Team (Team Quality)
• Development Activity(GitHub)
• Community

Project White Paper

You should look into the whitepaper and documentation (docs) to make sure that the project has a chance of succeeding. You just have to focus on some of the most important points and whether they Make Sense to your as a person.

Some of these include:

• Blockchain technology solutions (Protocol Consensus method)
• Technology Stack (How is the technology designed?)
• Planned features and upgrades
• Token economics and sale information
• Interoperability of Protocol (Can the blockchain be used on other Chains?)
• Scalability of the network (Can it scale/is massive adoption possible?)
• Use cases (What is the coin going to be used for?)
• Project Road map (What can you expect from Them?)
• Team Information

"Studying the whitepaper is your first step towards understanding what the project is all about"

Market Capitalization (Market Cap)

Tells you the strength or the amount of money invested in the Crypto asset at the present time, because if there is so much money, there is less likelihood for failure. As of the time of writing, Bitcoin (BTC) has the Highest Market Cap.

Market Cap tells/shows you how much Private investors, public investors, or individuals currently value the Crypto asset (Coin or Token). Investor's like going "Big" on projects that they believe in, so from market cap you can to an extent know the investor's perspective towards a given Crypto project.

"Price is dependent on market cap, thus if market cap increases, price per Coin or token increases as well"

Circulating Supply

One of the things you must check when choosing Crypto asset/s (Coin or Token) to invest in, is the Circulating Supply. If there are more of the Crypto asset in circulation, then the Crypto asset can be prone to Inflation. As of the time of writing, Yearn.Finance(YFI) is one of the Crypto asset with less circulating supply and good use case, and currently, its Maximum Supply has reached 100%, this will likely give it a head up for the exponential increase, as time goes by...

Yearn.Finance Circulating Supply

"Scarcity gives Crypto asset/s more value"

Exchange Listing

Seeing where a Crypto asset (Coin or Token) is listed is another important metric you should pay close attention to, as you are going to be buying it there and you also want to know that you can easily get your hands off it and liquidate it when you want to.

Personally, if the Crypto asset (Coin or Token) trades only on one exchange I like to avoid it, however if you want to go for it, i will use my short term plans.

If a coin is to rally in price then it has to be listed on an exchange/s with a large User Base. Take your time and look at the Trust code (confidence) and Market depth of the coin in an exchange by using the Coin Market Cap (CMC) or Coin Gecko platforms.

Market depth is a great way to think about liquidity. Coins with a deeper Order book have more Liquidity, thus they are easier to trade with Large block orders

"Liquidity is the availability of assets in the market"

Ether Exchange Listings and Trust code(Confidence)

This is for Ether, the native/dominant currency for the Ethereum network. You can check out the same insight for any Crypto asset of your choice using the CMC platform.

Project Team (Team Quality)

You should also place a large emphasis on the Team when you are initially doing your research. If the Project has "Great Team", then that is a clear head up for the Start-up or project planning and execution itself.

Team/s comprising of individuals who have backgrounds in the space is really important. You should also make sure that all of the information about the team members are publicly available and verifiable because Fake Team information can also be used to promote a Project, as in the case of ICO 2017.

While evaluating the Project Team you should be able to ask and answer these questions about the team yourself :

• Who are they?
• Why are they doing this Project?
• Do they have experience in the field they are targeting?
• Do they have experience and success in their current role?
• Do they have strong leadership?
• Is the team anonymous or public? Why if so? (Fake pictures on their profile)
• Is the team large enough for the problem they are looking to solve?

Look closely at the roles of the CEO, CTO, and COO, the board of Advisors, their experiences, and previous track records.

You can use Linkedin, Twitter, and Github to verify some of the details of the Team Members. Also, it makes a great team to have people on board who have a Business or marketing background, as they can help to source and secure partnerships and that could increase the project adoption and awareness.

Back then, I used this particular metrics (Project Team) to invest in some projects like the Polkadot (DOT) coin, founded by Gavin Wood , former Co-founder and CTO of Ethereum, and also in Theta coin , ChainLink and the rest. I went Big on this project because I already knew the previous experience and track records of the key team players and the novel use cases of the projects.

Development Activity (Github)

I love to dive into the GitHub repository of a project. Personally, as a Blockchain Engineer, this is perhaps one of the most transparent ways for me to ascertain development activities by the developers of the project, in line with the project road map. One of the only ways that an Alt-Coin (any other coin/token that is not Bitcoin) can separate itself from the crowd is to have impressive technology and this needs to be worked on constantly. Through the link to their GitHub, you can go over to the insights section and you will see the various commits, code frequency, issues, and contributors.

Community

The success of any project depends to an extent on the community. How large and active the community is, the caliber and dedication of the project community speaks big about the project's potential.

Understand that "web3 is community-driven", thus the mindset and dedication of the community members to an extent can help in the success of the project.

"Large and Active community can birth large Invested capital, which invariably affects the overall market cap of the Crypto asset"

Other Important Metrics:

The above metrics should give you a head-up about the project/s, however, you can still go further and look at these other metrics as well...

Partnerships

You should evaluate their current partners and sponsors if any. Are there legitimate partnerships where the project will be providing its solution to partners or is the partnership simply used for promotion? Is there continuous creation of relevant partnerships over time or is the project Stagnant?

The Marketing and Branding

Marketing and Branding are paramount to the success of any project, as it helps to create awareness about the project among potential investors.

Does the team constantly release relevant transparent information regarding the project?

What's the elevator speech of the project like?. Is the elevator pitch easy to understand?

Is their website, whitepaper, and all relevant marketing materials look professional?

Competition

This project, does it have a first mover advantage for the specific problem it is solving?

What other Crypto projects are providing the same solution and what is the innovation or uniqueness of this particular project?

How saturated is the broader market looking to solve this exact problem? and Where does this project fit into the broader market and how saturated is the market?

How Is the Tech

Do they currently have a working product and if so is it being used? What is the consensus method/protocol and Why?

What are the largest milestone or hurdles this project will face?

Token Utility

What relevance does the token play on the Web3-Blockchain ecosytem? How has the project incentivized usage and mass adoption? What driving factors will increase the token price?

Spot Scam Projects

You should understand that we are still early in the Game and thus the industry is bound to receive attacks from the Bad actors...

However, an In-depth and clear understanding of the Use Cases of the Crypto assets and the key metrics we have studied above will guide you to do detailed Project Research which will help you to spot and avoid Scam Projects.

I have designed a Template that summarizes the insights I have shared and everything you might be needing for your Crypto Project Research.

Research Template

Disclaimer: This template is based on my personal convictions and experiences over the years and is not really a strict rule or Investment advice.

Till next time, Cheers...