What is your strategy for learning from successful and failed blockchain projects?

It's evident in hindsight that most projects in the previous waves were attempts to ride the hype and make a fast buck. Many unsophisticated and new investors lost money to clever marketing. The next set of failed projects were those looking to enter the sector by quickly building products not based on first principles, leading to poor design and useability. Most successful projects have focussed on painstakingly identifying real-world problems affecting many businesses or people and then building products that meet the needs of their intended market, are cost-effective, faster, and safer. Accordingly, teams must spend time carefully analyzing the problem, its scope, and potential solution before taking steps towards building the solution.

Many projects in blockchain tech fail to solve everyday problems and don't yet appreciate the needs of the customer. As for how to solve a problem, many blockchain projects listen to their community and while that's very important, their most vocal community members aren't necessarily business customers, rather token investors. Their is a huge lack of appreciation for proper user research across the industry. As vital as your community may be, they shouldn't speak for your next billion users. The next billion users will only want one thing: convenience. Proper user research is required.

Ensure the problem is not a solution in search of a problem but a genuine market need! For me, a blockchain project's worth is judged by its value proposition. Does it bring something unique to the table? Perhaps it offers cost savings, increased security, or unprecedented transparency. Gauge the project's competitive advantage in comparison to existing solutions.

Many projects would benefit from taking a cold hard look at the problem they're trying to solve. If you can't answer that question you're probably either working on a cash grab or an experiment. I like experiments but i think the blockchain world has seen enough cash grabs.

The blockchain is simply a data structure that was invented by Dr. Stuart Haber and his colleagues back in the early 1990s. At that time, the blockchain data structure was only meant to assist with digital document time-stamping. The internet during the 90s was in its early stages of development. Fast forward to late 2008, when Satoshi Nakamoto cited the work of Dr. Stuart Haber in the Bitcoin whitepaper. Now, in 2023, there are thousands of projects claiming to leverage blockchain tech. However, a successful blockchain project has real-world use-cases. The initiative must provide a real value proposition. Blockchain or distributed ledger technology (DLT) can be used to streamline cross-border transactions among many other use-cases.

Make a clear distinction between whether the research is using blockchain data or human data. Is the data based on verifiable on-chain data? Or subjective human reports. Both have strengths and weaknesses, but they are fundamentally different types of data which can be used to draw different conclusions. Blockchain Data: Given that blockchain is a decentralized ledger, consider how data was extracted. Were full nodes used to get the data? Was a specific API or tool employed? Was the data extracted directly? Or was a third party service used? Surveys and Interviews: If human perspectives were collected (e.g., for understanding blockchain adoption, attitudes), were the samples representative? Was the survey validated before deployment?

Remember, the blockchain environment is less forgiving than traditional systems. Every deployment comes with a cost, and errors can be irreversible. This necessitates a rigorous testing phase. What I prioritize most when I analyze a blockchain project is the quality and coverage of the test suite. I ensure they employ various testing methods, such as fuzzy testing, and that they achieve full test coverage of their code before official deployment.

One of the main challenges in this nascent sector is the lack of adequate tools to measure success, leading to poor performance indicators gaining wide acceptance and harming long-term progress. For instance, one current measure of success in DeFi is the TVL, a very poor indicator as projects thrive when transactions happen, not when funds are locked. So, a good measure in this case would be #transactions. Other aspects include ensuring financial sustainability, implementing performant tokenomics, having a sought-after incentive program, having an engaged community, seeking community feedback and implementing it, implementing transparent governance structures, fostering partnerships, and many more.

Something that I find extremely useful is to assess how projects handle unexpected crises, whether it's security breaches, regulatory changes, or technical issues. I also evaluate their risk mitigation strategies, such as whether the code undergoes security audits.

Understand who the intended audience is for the report, to understand what the likely biases are in the report. Is it a report from a project or protocol trying to raise funding? Attracting investors or customers? The framing of the problem may be significantly influenced by the intended audience. It's also useful to check the funding sources. There are large groups, consortia and think tanks that fund this kind of research, so it can be useful to look at the biases there. Some funding sources may be political think tanks, groups representing payments companies, or tech giants. This doesn't necessarily invalidate the results, but gives a good insight into why the research was conducted and how the results are framed.

The problem with this is that 99% of user feedback is focussed on how to increase the asset price rather than the quality of the product. It's important to incentivise the right type of feedback by rewarding early adopters who actually use and engage with your product.

We are, [Blockchain Project Name Here], and our goal is to disrupt [Name of Industry Here], a $3 trillion industry (with a team of 2). I cannot count how many times I saw that statement from budding blockchain startups. Ambition is commendable, but unrealistic expectations and a lack of understanding of the industry nuances can derail even the most promising projects!

Many blockchain projects have ambitions that don't match reality. The first thing to check is how clearly they differentiate their current progress from their future objectives and aspirations - if that line is blurry, or they haven't clearly differentiated between their aspirations and reality then additional skepticism is needed. Like in scientific research, it's good to check if they have a realistic acknowledgement of the challenges, limitations and tradeoffs made in their approach. No project or tech is perfect, so any project that isn't able to acknowledge limitations is less likely to be grounded in reality. They should be able to outline the limitations of their approach, and explain the decision-making process behind that.

Most projects take too long building a product and then attempt to suddenly attract a community of users. Community building needs to start early and the early adopters should be allowed to shape the roadmap and be rewarded for doing so. True co-creation creates ambassadors for your product in a way that is vary rare in web2.

Experimentation is hard in blockchain because most experiments fail and when they do users lose money. To avoid this where possible projects should launch their tokens after they've achieved some level of product market fit.

In my experience, the application of blockchain is not always the right technology fit. Here are additional reasons for failure, which aren't exclusive to the blockchain space and can be mitigated. - They realised why they had chosen blockchain, influenced more by its buzzword status than actual need. - Their timing was off. - They didn't address a real-world problem. - A simple centralised internal database would have been more cost-effective and efficient. - They faced challenges processing transactions at necessary speeds during scaling. - The technology didn't match their objective, but they forced the fit. - They failed to build a robust community around their project, leading to decreased support and engagement.

One thing most new entrants to this space still have trouble digesting is how ‘interoperability’ is supposed to function in a “multi-chain world”. The rest are still in denial, for want of ‘competing’ with Bitcoin, or just to make themselves more FIAT. Going from FIAT standard to a FIAT standard because they have a FIAT mindset and are just here to extract devaluing value for themselves, so…they act delusional about what the purpose of the space is, not here for the change, but here for the change (see what I did there, ha!) until they get that short sharp shock and realise that, even after almost 15 years, all roads still lead to Bitcoin (BTC)! If anything to learn is putting Bitcoin first as the absolute cornerstone of new economy.

Leadership & Synergy. That seems to be the major difference between projects that have tremendous success juxtaposed to those that fail. Because the technologies and “solutions” for the most part are both sound and similar. The true “thought leaders” move around with a Midas touch; whereas conversely some personalities are like a plague. And the best projects are the best at communicating with each other; working effectively with remote teams. They have a Developer Intelligence who bridges the technical minded team members with community ambassadors to marketing and sales teams.

Don't use blockchain if it's not necessary. There are many risks and complexities when using blockchain/crypto in a project: (lack of) regulation, banks don't play nice, tech stack might evaporate, immutable means you can't undo fat fingers, privacy concerns, investors think crypto's a scam, etc etc In my experience, most projects don't need to blockchain anything and are simply trying to capitalize on the buzz around the tech and it bites them later. Don't do this.