{"id":479789,"date":"2022-07-31T19:03:53","date_gmt":"2022-07-31T16:03:53","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/"},"modified":"2022-07-31T19:03:53","modified_gmt":"2022-07-31T16:03:53","slug":"dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/","title":{"rendered":"#Don\u2019t fall for the hype \u2014 6 ways to evaluate a crypto project"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a26b526b7ec4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a26b526b7ec4\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/#%E2%80%9CDont_fall_for_the_hype_%E2%80%94_6_ways_to_evaluate_a_crypto_project%E2%80%9D\" >&#8220;Don\u2019t fall for the hype \u2014 6 ways to evaluate a crypto project&#8221;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/#Algae-made_glass_and_cows_blood\" >Algae-made glass and cow\u2019s blood?<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/#1_Media_sweet_spot\" >1. Media sweet spot<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/#2_Advisory_board_and_project_support\" >2. Advisory board and project support<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/#3_State_of_the_project\" >3. State of the project<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/#4_Team_composition\" >4. Team composition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/#5_Long-term_vision\" >5. Long-term vision<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/#6_Token_economics_Tokenomics\" >6. Token economics (Tokenomics)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/buradabiliyorum.com\/en\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CDont_fall_for_the_hype_%E2%80%94_6_ways_to_evaluate_a_crypto_project%E2%80%9D\"><\/span>&#8220;Don\u2019t fall for the hype \u2014 6 ways to evaluate a crypto project&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/img-cdn.tnwcdn.com\/image?fit=796%2C417&amp;url=https%3A%2F%2Fcdn0.tnwcdn.com%2Fwp-content%2Fblogs.dir%2F1%2Ffiles%2F2022%2F07%2FUntitled-design-2-4.jpg&amp;signature=a0284b33837c38421efb54bb32ee45ee\" \/><\/p>\n<div id=\"article-main-content\">\n                            <em>This <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/cult.honeypot.io\/reads\/6-ways-to-evaluate-a-crypto-project\/\">article<\/a> was originally published on .cult by <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/cult.honeypot.io\/contributors\/michiel-mulders\">Michiel Mulders<\/a>. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/cult.honeypot.io\/\">.cult<\/a> is a Berlin-based community platform for developers. We write about all things career-related, make original documentaries, and share heaps of other untold developer stories from around the world.<\/em><\/p>\n<p>So you\u2019ve spotted an eye-catching crypto project, but you\u2019re wondering if it\u2019s safe to actually take the leap and invest?\u00a0Analyzing crypto projects for investment purposes is an actual skill. You can compare it with fundamental or technical analysis on the stock market.<\/p>\n<p>Often, we come across a shiny new crypto project that tries to draw your attention. But isn\u2019t it too shiny or too eye-catching?<\/p>\n<div class=\"inarticle-wrapper channel-cta\">\n<div class=\"ica-text\">\n<h4><span class=\"ez-toc-section\" id=\"Algae-made_glass_and_cows_blood\"><\/span>Algae-made glass and cow\u2019s blood?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Experts and artists discuss the future of sustainable material design<\/p>\n<\/div>\n<\/div>\n<p>Don\u2019t invest blindly because you might end up empty-handed. After more than ten years of existence, the crypto industry still sees occasional crypto scams and these scams continue to evolve!<\/p>\n<p>This article guides you through six core elements you should look at when evaluating a crypto project. Some elements require more technical knowledge than others. However, we\u2019ve added tips that can help you verify these aspects without needing in-depth blockchain knowledge.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"1_Media_sweet_spot\"><\/span>1. Media sweet spot<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Red flag projects often try to be featured across as many publications as possible to gain credibility. However, that\u2019s just their marketing engine running, which can be a positive sign as well.<\/p>\n<p>To further investigate this, take a look at the publications the project\u2019s website lists. Often, companies hire PR agencies that try to add backlinks or short mentions about a new crypto project to <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> articles. If that\u2019s the case, it doesn\u2019t count as a full feature. It only shows that the project is trying to raise awareness artificially.<\/p>\n<p>A project that does things right will naturally gain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a> attention. If you see tens of publications publish the same piece about a project, it\u2019s most likely paid content. That\u2019s a red flag.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Advisory_board_and_project_support\"><\/span>2. Advisory board and project support<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Take a look at the project\u2019s partners, backers, and advisory board. This can provide you with a lot of information about the maturity and professionalism of the project. High-quality projects often form partnerships with industry-leading non-blockchain companies or try to receive funding from well-reputed venture capitals (VCs) in the blockchain space.<\/p>\n<p>For instance, Pantera Capital is the first cryptocurrency fund in the US, founded in 2013. They invested in many successful crypto projects and tools that shape the blockchain space nowadays. It\u2019s always a positive sign if you can spot such partners.<\/p>\n<p>Other well-known <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/medium.com\/blockchain4all\/what-top-vcs-invested-in-blockchain-in-q4-2019-and-q1-2020-65fc849b1fb0\">VC funds<\/a> include:<\/p>\n<ul>\n<li>ConsenSys Labs<\/li>\n<li>Coinbase Ventures<\/li>\n<li>Ethereum Foundation<\/li>\n<li>Gitcoin Grants<\/li>\n<li>PolyChain Capital<\/li>\n<li>Binance<\/li>\n<li>Blockchain Capital<\/li>\n<\/ul>\n<p>Make sure to look out for them.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_State_of_the_project\"><\/span>3. State of the project<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>We\u2019ve already covered the marketing and business engines. What about the project\u2019s current state?<\/p>\n<p>Try to determine if the project has already built a proof of concept, MVP, or if they\u2019re already running a blockchain test network. It\u2019s a positive sign if they\u2019ve already started developing the product and gathered a small community of beta testers. If people voluntarily sign up to try out a product, they see value in the project.<\/p>\n<p>Avoid projects that haven\u2019t started development yet. We\u2019ve seen many crypto projects that promise high-value features such as scalability, interoperability, or low fees but never deliver what they\u2019ve promised.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"4_Team_composition\"><\/span>4. Team composition<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The team composition can reveal a lot about the know-how of the project on running an actual blockchain company. The past has shown us that red flag crypto projects turn up with an extensive marketing engine and a small development team.<\/p>\n<p>Projects that have received funding through VCs don\u2019t have to worry about getting their marketing engine up to speed. Their primary concern is to deliver value as soon as possible.<\/p>\n<p>Therefore, analyze the team\u2019s composition. A pure blockchain project should have a healthy mix of engineering, marketing, design, and HR employees. Yet, look for the following roles that contribute a lot of value to the project and are hard to fill:<\/p>\n<ul>\n<li>Token economy designer<\/li>\n<li>Cryptographer<\/li>\n<li>Distributed systems engineer<\/li>\n<li>Smart contract engineer<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"5_Long-term_vision\"><\/span>5. Long-term vision<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A project must have a long-term vision. Roadmaps have become the standard in the blockchain space to capture a project\u2019s long-term vision. It allows a team to explain how they want to achieve their goals and execute their idea.<\/p>\n<p>However, any project can create a fictitious roadmap. And it\u2019s not always easy for non-technical people to understand if a roadmap is actually feasible or not.<\/p>\n<p>Take a look at the de<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">script<\/a>ion provided for each milestone. It should include how the project believes users will adopt the product. Adoption is the bridge between vision and reality.<\/p>\n<p>Even though projects often host very detailed roadmaps, they frequently miss deadlines, or fail to deliver features. Blockchain is a complex matter, and mistakes can happen.<\/p>\n<p>Don\u2019t shoot a project for missing a deadline. Evaluate how they communicate their failure to the community and if the delay is reasonable. Transparent communication is a crucial characteristic for a successful crypto project.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"6_Token_economics_Tokenomics\"><\/span>6. Token economics (Tokenomics)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Tokenomics are vital for a crypto project\u2019s long-term survival. A strong project with malfunctioning tokenomics can quickly fail making it one of the most important factors that determine a project\u2019s success.<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/decrypt.co\/resources\/tokenomics\">Decrypt.co<\/a> describes tokenomics as, \u201cthe study of how cryptocurrencies work within the broader ecosystem. This includes such things as token distribution as well as how they can be used to incentivize positive behavior in the network.\u201d<\/p>\n<p>Crypto is notorious for its volatility. This often turns a cryptocurrency into a speculative instrument, rather than a functional token. The goal of tokenomics is to reclaim the token\u2019s purpose through complex mechanisms designed by an economist.<\/p>\n<p>For instance, proof of stake networks incentivise users with rewards for staking tokens. Users lock their tokens for a particular period, and they\u2019ll receive a small reward for doing so. It\u2019s a very clever tokenomics strategy as you lock a large part of the total supply, which reduces the token\u2019s volatility.<\/p>\n<p>Proof of stake networks is just one example of tokenomics. For instance, the economy for the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/steem.com\/\">Steem project<\/a> hosts three different tokens that all have unique properties: <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.blockchain-council.org\/blockchain\/what-is-steem-and-how-does-it-work\/#:~:text=STEEM%20Dollars%20are%20highly%20stable,as%20that%20of%20STEEM%20Power.\">Steem coin, Steem Dollars, and Steem Power<\/a>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>With so many crypto projects being launched, it\u2019s essential to be able to evaluate new projects. Try to look beyond the project\u2019s hype and marketing engine.<\/p>\n<p>To get a good first impression of a project\u2019s validity, spend at least two hours researching the project. Read\u00a0their whitepaper, technical explanations, but also media coverage to get a different view of the project. This information will help you draw an initial conclusion. Media coverage can give you a good indication of the project\u2019s intentions.<\/p>\n<p>If a project seems promising, spend additional time investigating the team\u2019s composition, tokenomics, and long-term vision.<\/p>\n<p>A key tip for evaluating projects: If a project has a strong community of early adopters or beta testers, that\u2019s a strong indication of the project\u2019s validity.\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/technology\/\" target=\"_blank\" rel=\"noopener\">Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thenextweb.com\/news\/dont-fall-for-the-hype-6-ways-to-evaluate-a-crypto-project\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Don\u2019t fall for the hype \u2014 6 ways to evaluate a crypto project&#8221; This article was originally published on .cult by Michiel Mulders. .cult is a Berlin-based community platform for developers. We write about all things career-related, make original documentaries, and share heaps of other untold developer stories from around the world. So you\u2019ve spotted&#8230;<\/p>\n","protected":false},"author":1,"featured_media":479790,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/img-cdn.tnwcdn.com\/image\/hardfork?filter_last=1&fit=1280,640&url=https:\/\/cdn0.tnwcdn.com\/wp-content\/blogs.dir\/1\/files\/2022\/07\/Untitled-design-2-4.jpg&signature=5d4febf7b3e1762d520d25be0de34ef4","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-479789","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/479789","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=479789"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/479789\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/479790"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=479789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=479789"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=479789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}