What are the key factors to evaluate a new cryptocurrency project?

Majority of new projects in the crypto space lacks clarity of idea and what makes them stand out. Within few minutes reading most pitch deck and project whitepaper you can clearly see that most of the project are usually money grab schemes riding on the back of “bull run euphoria”.The basic most important factor for me is the usability of the project. Ethereum was able to succeed because projects can easily build on it, create token, write smart contract or build DAPP. It isn’t sufficient to come up with innovative idea or the next ethereum killer, what I am most interested is can this project be USED by a specific market target audience.If yes, can the team deliver or do they have the right mindset?If yes, then what is the community like?

While it cannot be denied that vision and mission statements always hold a fundamental place in many projects, in the realm of blockchain projects, these points often become a double-edged sword for investors. Numerous projects, despite having substantial funding and extraordinary concepts, ultimately crumble and appear to be nothing more than scams. A prime example of this phenomenon is the LUNA project, which quickly captured the attention of many investors but, within a matter of months, wrought havoc across the entire cryptocurrency industry.

Sharing some helpful hints and common misconceptions. 1) The "purpose" of a brand is the “why” behind your existence. Your values, define the soul of your org and engage emotionally through a series of shared beliefs, solved problems, and inherent meaning. 2. Start with "What?" As this is usually easily answered and focuses more on the technical & and product side. Then move towards more soft things like "Why?" and "How?" 3) Vision vs Mission The vision statement focuses on tomorrow and what the business aspires to become. The latter focuses on today or the near future and what the business does. 4) The first replies to the "Why?" might be a bit more broad at first. Try to pinpoint those down by working on the reasoning behind

The vision and purpose of a cryptocurrency project are crucial. Key aspects to consider include the specific problem the project aims to solve and the unique value it offers to users and society. Look for what makes the project stand out from similar ones. A clear vision indicates the level of innovation and ambition, reflecting the team's commitment to making an impact. Projects with a strong vision attract and retain a loyal community, essential for growth and longevity. At Consensus 2024, I spoke with many projects. Most couldn’t clearly articulate their vision. When asked what sets them apart, they buzzed about AI and decentralization. How many of these will we see next year? You can probably guess. :)

When evaluating a cryptocurrency project, it's crucial to examine the team and advisors behind it. Relevant experience in the industry they aim to impact is essential. For instance, if a project proposes a new Layer 1 solution, having team members with a proven track record in developing such solutions is vital. Additionally, the team should include experts in marketing, finance, and other critical areas. Transparency is key. A credible project will have a public team with verifiable backgrounds. Serious projects prioritize clear and open communication, building trust with stakeholders. While Bitcoin's success as an anonymous project is notable, it remains the exception rather than the rule.

In the blockchain space, the presence of renowned IT experts within the team can bring a wealth of knowledge and experience, potentially elevating the project's credibility and chances of success. However, it's equally important to ensure that all stakeholders, including public figures and advisors, are aligned with the project's core values and objectives to avoid potential conflicts and concerns over motives.

Assess the project's team members, their experience, and their track record in the blockchain and cryptocurrency space. A credible and skilled team is crucial for success.

Examine the underlying technology and blockchain protocol. Is it innovative or a build off of an existing blockchain? Look for technical features that provide advantages.

Key points include the project's technical features, innovations, and how they compare to industry standards. Look at scalability, security, efficiency, and how it handles consensus, governance, interoperability, and privacy issues. Don’t fall for empty promises; verify the technology. Good projects often have detailed Gitbooks or similar documentation. Check who is developing it. Precise deadlines can be a red flag – milestones by months or quarters offer better insight. Ensure the project undergoes a testnet phase before any public release, as errors are inevitable. A robust and advanced technology and roadmap show the project's feasibility, functionality, and competitiveness, giving a clear picture of its progress and future direction.

The first question you should ask and learn to answer in detail is: How to generate value within a blockchain network? The lack of information on this topic shows how complex this is. As this article space is limited, I only touch the surface. 1) Token Price is the manifestation of the Token Value. The Token Value is the combination of the speculative and the fundamental components. 2) Speculative Components are subject to market forces and include topics like sentiments which are mainly driven by market forces. 3) Fundamental Components is split into Protocol Services (e.g. the Tech Layer) & Token Architecture (What type of token is it?) and Value Mechanisms (e.g. What utility and distribution mechanisms does it offer?)

Look at the token's role and utility in the ecosystem. Check supply, allocation, and circulation – how fair and transparent are they? Consider scalability. Is there a risk of a sudden influx of sellers? Unlimited supply can trigger sharp sell-offs. Also, check who controls the tokens – is the team holding too much? Abrupt price swings can kill a project, no matter how good the tech is. Balanced tokenomics ensure economic viability and attract users and investors. In GameFi, think of it as a game of supply and demand. Too many tokens, and you might end up with a player exodus faster than you can say "pump and dump." So, ask yourself: is the tokenomics a well-designed game plan or just a game over?

In the world of blockchain, the community plays a pivotal role in shaping the direction and outcomes of a project. A blockchain project can be seen as a community-driven initiative for the benefit of society, where developers play a role in representing the community's interests and managing the project. Their active participation, alignment with the project's goals, and dedication to its growth are instrumental in driving positive outcomes and ensuring that the project truly serves the broader interests of society.

Another factor to consider is the readiness of the market where this project aims, especially in terms of Web3 integration. How primed is this segment for blockchain technology adoption, and what are the prevalent attitudes, opportunities, and barriers within it? Are there prior examples of successful Web3 implementations, or is the segment largely untapped and nascent in this context? For instance, while sectors such as finance have seamlessly integrated blockchain through DeFi platforms, industries like healthcare remain on the fringes due to regulatory complexities. Understanding a segment's Web3 readiness can offer insights into the project's potential to pioneer, compete, and establish a foothold in an ever-evolving landscape.

In a very simple nutshell: Identify relevant market developments & expected future developments. Derive the key questions dealing with taking advantage of these developments. Questions to ask include: 1) What developments have characterized the market segments so far? 2) What developments can be expected in the relevant market segments in the near future? 3) Which opportunities do these developments offer? 4) What are your core competencies? Defining these sounds simple but they should be answered and sorted according to importance for market success and own performance strength. After that (and some), you will be able to classify the different markets and segments according to the own competitive strength existing there.

A topic most experts oversee and leave out due to it being very strategic in nature, and therefor ... a lot of work! Brand & Positoning The brand represents the core of the corporate strategy - a targeted positioning based on insights from the target segments often determines the success or failure of a project. The attributes of a brand form the decisive basis for the fundamental potential for success in the market. Distinguishing which of these attributes are most relevant to the targeted clients and against key competitors paves the way to identifying the optimal strategic positioning. The positioning of a brand is carried out by taking into account the needs of potential users and the positions already occupied by competitors.