DESCRIPTION: A detailed guide on how to properly evaluate a crypto project’s significance, sustainability, and value
TL;DR
A lot of uncertainty comes with investment, especially when associated with the crypto space. Cryptocurrencies are known to be very volatile, and the number of projects springing up every day makes investment choices more challenging. As a beginner, risks are inevitable and sometimes losses, but a good understanding of the qualities that make any crypto project succeed can ease the burden of decision-making and make venturing into the crypto space much easier. This article will provide detailed summaries of the essential things to know to make informed decisions on investment in crypto projects… Learn more in the body of the article.
WHAT TO EXPECT.
Since the success of Bitcoin, many crypto projects have sprung up, causing society to debate on the “next big thing” constantly. Crypto investors find it challenging at times to know what cryptocurrencies to invest in that will generate yield because not all coins that look promising can make it big in the crypto space. This article will explain the important things to look at when evaluating the sustainability of a project.
For the most part, there are some critical features all crypto projects must have; Whitepaper, Litepaper, community, and a host of others. So we will start with these.
WHITEPAPER
The whitepaper is simply a structured guide on how the project will function, the problems it aims to solve, and how it plans to solve them. An effective Whitepaper should be easy to read, containing minimal jargon to ensure a reader understands the project’s aim. When reading a very technical or confusing whitepaper, it is advisable to either do more research or refrain from investing hastily to avoid losses. The most important things to look for in a whitepaper document is the problem(s) the project looks to solve, i.e., if they indeed exist and have not been addressed by another project—how they plan to go about solving them. The whitepaper is usually found on the project’s official site.
LITEPAPER
A Litepaper is a concise version of a whitepaper document. It summaries and simplifies the contents of the whitepaper but pays attention to crucial points of the document.
PROJECT COMMUNITY.
A project’s community refers to the developers, miners, users, and followers of that project. A project is greatly affected by its community. A crypto community can be judged based on the engagement and interest of the followers. How active are the followers on social media, and how much does the community know about the project? These are questions to mull over when screening for a strong project community because it usually consists of the first people to acquire that cryptocurrency.
PROJECT PLATFORM.
A project’s platform refers to the technology on which the project is built and thrives. For example, Bitcoin is built on the Bitcoin blockchain, aka Blockchain, while Solana operates on the Solana blockchain (SOL). Each platform has advantages and shortcomings, and it is crucial to research a project thoroughly before investing.
TEAM
The team can be regarded as the essential part of any successful (or unsuccessful) project. When getting informed about a crypto project, it is crucial to know the experience of the team members, their interest in the project, and how transparent the team is with the community.
Every project relies on the team for progress, as the team determines what problems to address and how to do so. The transparency of the team is necessary because a confident team will most likely update the community regularly on the progress of the project to show that the plan is advancing as it should. Not doing so might mean a lack of confidence in the team in the project. The team determines the whitepaper, roadmap, and vision of a project.
ROADMAP
Roadmap/Image Courtesy: Pixabay.com
The roadmap refers to the overview of the project’s goals, milestones, and the major steps needed to reach it on a (flexible) timeline. The road map does not contain technical details, and it represents the project’s scheme in a brief, possibly graphical format to display how the team plans to execute the project.
A roadmap is likely to contain the use case, consensus mechanism, and design for the project
TOKENOMICS
Tokenomics refers to the economic value and factors that make a cryptocurrency valuable or interesting to crypto investors. The goal of tokenomics is to understand the potential value of a crypto project by considering the tokens supply, allocation, distribution, and market value. The tokenomics of any crypto project will provide insight into how the token will be used in the economy and how stable the value will be.
Usually, coins that are used to power Decentralized applications (DApps) are likely to be more stable than coins that are only used as a means of exchange.
SUSTAINABILITY
The sustainability of a project refers to the length of time in which the project will be significant. The problem it is attempting to solve: how important is it? Is the solution presented by the project unique? In general, how important is the project, and how long can it remain important given the solution it brings to the table. The answers to these questions will determine how much of an effect such a project will have on the crypto space and its value in the long run.
MARKET CAP.
Market cap is the total value of all the coins that have been mined at a given time. Market capitalization helps to gauge the scale of a project. As for projects that have not mined any tokens, It is an excellent way to assess the value of a project, given that cryptocurrency can be very volatile.
APART FROM WHITEPAPER, HOW ELSE CAN ONE RESEARCH A CRYPTO PROJECT.
There are platforms that provide information on high-quality crypto projects to invest in and also allow potential investors to invest in said projects. Such platforms are called IEOs (Initial Exchange Offering); a good example is the Gate.io startup platform. IEOs exhibit new crypto projects with a high potential to be valuable, and so they provide information to assist possible investors in making informed decisions. IEOs bank their reputation on new projects they exhibit; therefore, it is projects with very high potential that make It onto such platforms.
WHAT MAKES A PROJECT REVOLUTIONARY?
The crypto industry has been the center of attention for years, with new projects being created and developed almost daily. Each one being advertised as ‘revolutionary.’ Now how does one identify a genuinely revolutionary project?; Let us take a case study of the cryptocurrency with the highest market value at the moment, Bitcoin. Bitcoin could be referred to as revolutionary because it addressed a very pressing problem of trusted banking. Bitcoin made it possible for users to make transactions without having to trust or rely on intermediary bodies like banks.
Another example could be Solana, a blockchain that solved a problem that Bitcoin and Ethereum had not. Solana provides quicker transactions through a proof-of-history consensus algorithm. A project must be addressing a pressing issue or improving on an already existing solution to be revolutionary.
Investing in a crypto project is very risky if one is not properly informed. These few areas will ease the burden of decision-making when it comes to investing.
This article was researched and written by Thecapstone Mogbolu.
JustCryptoWeekly 
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