How to Know a Good Crypto Project
Blockchain is the most innovative technology of the past decade and with the advent of decentralized applications, there has been a proliferation in the number of projects on the blockchain. As many as these projects are, they propose different values to users that range from reasonable to outrageous.
- There are several projects on the blockchain and many more are being developed
- Project use cases are some of the most important things to consider in any crypto project
- Other factors to consider in a good project include the project team and the project milestones
A Legion of Projects
With the advent of decentralized applications, there are now a large number of projects on the blockchain that seek to offer different solutions ranging from finance to insurance, record keeping, and more. Most of these projects offer users unique solutions to real-world issues in an innovative way.
There are already thousands of these projects and amid all the fanfare, it is worth mentioning that value proposition has been a major issue. Thus, rug pulls and other forms of scams have become prevalent in recent years. This is not surprising as the industry is still developing with lots of improvements and standardization still on the horizon.
It is not uncommon for projects to offer insane returns to investors who could get blindfolded by rewards while leaving out the need to do due diligence.
Value Proposition is Non-Negotiable
If you are seeking to invest in a crypto project, it is important that you do not overlook the project’s value proposition. This is the most important aspect of any project development (even outside crypto).
Be sure to read through the project’s whitepaper to understand its product and its innovative approach to solving existing problems. If you find it hard to make a connection between value and existing problems, this is a red flag and it could be an indication of a scam.
Ensure that you fully comprehend what is on offer, read through the pitch deck and project whitepaper, check the project out on social channels to understand its narratives, and ensure that its solutions are clearly communicated. It is quite easy to unravel a scam from its product and value offering.
Equally Important Checklist
There is no project without a project team. It is your responsibility to do due diligence in this regard. Check out the project to confirm the project team, then proceed to evaluate the team online. Check them out on professional platforms like LinkedIn to confirm their track record. Having a face behind a project is an indication of a solid project in the making. However, if there is little to no information about the project team (especially the top-ranking project developers), you might be set up for a scam.
Additionally, check out the set milestones for the project. What is the project roadmap? What are the timelines? And how realistic are they? If you can conveniently answer these questions, you are on the path to investing in the next big project on the blockchain, otherwise, you might be in for a scam.
Other things you should factor in your research include the exchange listing, partnerships, and social media presence, among others.
Crypto scams are becoming more prevalent, and it is your duty as an investor to conduct due diligence before making any form of commitment or investment in a crypto project. We have outlined some of the factors that you can put into your consideration in this post.
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