๐ ๐๐๐๐๐ $๐๐๐๐, ๐๐ฎ๐ญ ๐ฌ๐ญ๐ข๐ฅ๐ฅ ๐ฆ๐๐๐ ๐๐๐๐๐ฑ ๐จ๐ง ๐ ๐ฉ๐ซ๐จ๐ฃ๐๐๐ญ ๐ญ๐ก๐๐ญ ๐๐ข๐๐ง'๐ญ ๐ก๐๐ฏ๐...
Ernest๐งฉ๐ค@Ernestofweb3
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Jan 21, 2025
~12 min read
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1
๐ ๐๐๐๐๐ $๐๐๐๐, ๐๐ฎ๐ญ ๐ฌ๐ญ๐ข๐ฅ๐ฅ ๐ฆ๐๐๐ ๐๐๐๐๐ฑ ๐จ๐ง ๐ ๐ฉ๐ซ๐จ๐ฃ๐๐๐ญ ๐ญ๐ก๐๐ญ ๐๐ข๐๐ง'๐ญ ๐ก๐๐ฏ๐ ๐ฌ๐จ ๐ฆ๐ฎ๐๐ก ๐ก๐ฒ๐ฉ๐.
How?
Research Methodologies!
Here's a hack to knowing real investments from noisy ones in DeFi.
The last one remains my ultimate method โค
How?
Research Methodologies!
Here's a hack to knowing real investments from noisy ones in DeFi.
The last one remains my ultimate method โค
2
Before we move on,
You can show support by โผ
Liking ๐ค
Reading ๐
Commenting โ๏ธ
Reposting ๐
and Bookmarking ๐ท๏ธfor reference and visibility.
๐๐๐ฅ๐ค ๐ฐ๐ข๐ญ๐ก ๐๐ โฌ๏ธ
You can show support by โผ
Liking ๐ค
Reading ๐
Commenting โ๏ธ
Reposting ๐
and Bookmarking ๐ท๏ธfor reference and visibility.
๐๐๐ฅ๐ค ๐ฐ๐ข๐ญ๐ก ๐๐ โฌ๏ธ
3
๐๐๐๐๐ง๐ญ๐ซ๐๐ฅ๐ข๐ณ๐๐ ๐
๐ข๐ง๐๐ง๐๐ (๐๐๐
๐ข) is revolutionizing the financial world by offering innovative and decentralized alternatives to traditional banking.
While DeFi offers exciting opportunities, it also comes with risks due to its fast-paced and unpredictable nature.
To navigate this space effectively, itโs essential to understand how to research on DeFi projects.
Good research helps you identify trustworthy projects, avoid scams, and make informed investment decisions.
This thread will cover basic research methods, such as examining the project's fundamentals, analyzing on-chain data, and understanding market trends, to help you make smart choices while investing.
So let's get into it.
While DeFi offers exciting opportunities, it also comes with risks due to its fast-paced and unpredictable nature.
To navigate this space effectively, itโs essential to understand how to research on DeFi projects.
Good research helps you identify trustworthy projects, avoid scams, and make informed investment decisions.
This thread will cover basic research methods, such as examining the project's fundamentals, analyzing on-chain data, and understanding market trends, to help you make smart choices while investing.
So let's get into it.
4
๐๐ก๐ ๐ญ๐ก๐ซ๐๐๐ ๐ฌ๐ฒ๐ง๐จ๐ฉ๐ฌ๐ข๐ฌ;
What we'll be talking about in this thread include;
โฏ Website
โฏ White paper
โฏ Team and partnerships
โฏ Social media
โฏ Audits
โฏ The Seed Sale/Private Sale Price
โฏ Token Unlock periods and Token Unlock Size
โฏ Tokenomics (Token Distribution, Supply and Demand)
What we'll be talking about in this thread include;
โฏ Website
โฏ White paper
โฏ Team and partnerships
โฏ Social media
โฏ Audits
โฏ The Seed Sale/Private Sale Price
โฏ Token Unlock periods and Token Unlock Size
โฏ Tokenomics (Token Distribution, Supply and Demand)
5
๐ ๐๐๐๐ฌ๐ข๐ญ๐
Every project has a website.
The interface of their website is like the face of the project, therefore, it should be a good first impression test for the project.
๐๐ก๐ข๐ง๐ ๐ฌ ๐ฒ๐จ๐ฎ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ฅ๐จ๐จ๐ค ๐จ๐ฎ๐ญ ๐๐จ๐ซ ๐ข๐ง ๐ญ๐ก๐ ๐ฐ๐๐๐ฌ๐ข๐ญ๐ ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โซ Does it appear legitimate or show any signs of being fkae?
โซ Is there bad grammar or awkward formatting?
โซ Do the website links work?
(Most times if they don't, check using a VPN as most websites don't support certain regions or countries)
Every project has a website.
The interface of their website is like the face of the project, therefore, it should be a good first impression test for the project.
๐๐ก๐ข๐ง๐ ๐ฌ ๐ฒ๐จ๐ฎ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ฅ๐จ๐จ๐ค ๐จ๐ฎ๐ญ ๐๐จ๐ซ ๐ข๐ง ๐ญ๐ก๐ ๐ฐ๐๐๐ฌ๐ข๐ญ๐ ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โซ Does it appear legitimate or show any signs of being fkae?
โซ Is there bad grammar or awkward formatting?
โซ Do the website links work?
(Most times if they don't, check using a VPN as most websites don't support certain regions or countries)
6
โซ If this is an older project, how up-to-date is the website?
The appearance and general look of the website is always one of the first impression tests for a project.
So the after checking the website and it's good to go, the next thing you check is...
The appearance and general look of the website is always one of the first impression tests for a project.
So the after checking the website and it's good to go, the next thing you check is...
7
๐ ๐๐ก๐ ๐ฐ๐ก๐ข๐ญ๐๐ฉ๐๐ฉ๐๐ซ
It is very important for crypto projects to release a whitepaper and/or roadmap to detail the plans and estimated forecast of their projects progress.
๐๐ก๐ ๐ฐ๐ก๐ข๐ญ๐๐ฉ๐๐ฉ๐๐ซ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ข๐ง๐ญ๐ซ๐จ๐๐ฎ๐๐;
โThe tokenomics of the coin and the features of the project upon release.
โRoadmaps that help to understand what a crypto project wants to achieve over time.
It is very important for crypto projects to release a whitepaper and/or roadmap to detail the plans and estimated forecast of their projects progress.
๐๐ก๐ ๐ฐ๐ก๐ข๐ญ๐๐ฉ๐๐ฉ๐๐ซ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ข๐ง๐ญ๐ซ๐จ๐๐ฎ๐๐;
โThe tokenomics of the coin and the features of the project upon release.
โRoadmaps that help to understand what a crypto project wants to achieve over time.
8
๐๐ก๐ข๐ง๐ ๐ฌ ๐ฒ๐จ๐ฎ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ฅ๐จ๐จ๐ค ๐จ๐ฎ๐ญ ๐๐จ๐ซ ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โบ Does the Project have unrealistic roadmaps and projections?
Beware of smaller roadmaps that seem unreachable and extremely ambitious goals in short periods of time.
Really solid projects will be those with an edge on the industry and something new to provide, or an improvement on an existing successful project/tokenomics
A perfect example was when RISE brought the buy-back Whale (Kraken) from Stocks to Crypto and improved upon the Safemoon redistribution tokenomics.
Once you're done checking the whitepaper, the next thing you should be looking at is...
โบ Does the Project have unrealistic roadmaps and projections?
Beware of smaller roadmaps that seem unreachable and extremely ambitious goals in short periods of time.
Really solid projects will be those with an edge on the industry and something new to provide, or an improvement on an existing successful project/tokenomics
A perfect example was when RISE brought the buy-back Whale (Kraken) from Stocks to Crypto and improved upon the Safemoon redistribution tokenomics.
Once you're done checking the whitepaper, the next thing you should be looking at is...
9
๐ ๐๐ก๐ ๐๐๐๐ฆ/๐๐๐ซ๐ญ๐ง๐๐ซ๐ฌ๐ก๐ข๐ฉ๐ฌ
It is very essential to get to know the team and developers behind the project.
You can check them on LinkedIn.
๐ง๐ต๐ถ๐ป๐ด๐ ๐๐ผ๐ ๐๐ต๐ผ๐๐น๐ฑ ๐๐ฎ๐ธ๐ฒ ๐ป๐ผ๐๐ฒ ๐ผ๐ณ ๐ถ๐ป๐ฐ๐น๐๐ฑ๐ฒ;
โบ If they have worked on any other coins/tokens?
(Maybe other technology ventures )
โบ Do they have transferrable skills?
โบ What happened to their previous projects?
It is also not uncommon for crypto developers to leap from project to project and essentially abandon projects for new ones under new names.
Be Vigilant of this as they could be cash-grabbing.
It is very essential to get to know the team and developers behind the project.
You can check them on LinkedIn.
๐ง๐ต๐ถ๐ป๐ด๐ ๐๐ผ๐ ๐๐ต๐ผ๐๐น๐ฑ ๐๐ฎ๐ธ๐ฒ ๐ป๐ผ๐๐ฒ ๐ผ๐ณ ๐ถ๐ป๐ฐ๐น๐๐ฑ๐ฒ;
โบ If they have worked on any other coins/tokens?
(Maybe other technology ventures )
โบ Do they have transferrable skills?
โบ What happened to their previous projects?
It is also not uncommon for crypto developers to leap from project to project and essentially abandon projects for new ones under new names.
Be Vigilant of this as they could be cash-grabbing.
10
๐๐ญ๐ก๐๐ซ ๐ญ๐ก๐ข๐ง๐ ๐ฌ ๐ฒ๐จ๐ฎ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐๐ก๐๐๐ค ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โ How big is the team.
โ Are they Anonymous?
๐ฃ๐: This is not always bad as it takes courage to put yourself out there to the world however, the top projects usually don't mind this.
๐๐ก๐๐๐ค ๐ญ๐ก๐๐ข๐ซ ๐๐๐๐ค๐ข๐ง๐ /๐ข๐ง๐ฏ๐๐ฌ๐ญ๐จ๐ซ๐ฌ
Partnerships are typically displayed on a projectโs website and can be announced through social media.
When you check the team and partnerships and have verified them, the next thing you look out for should be.....
โ How big is the team.
โ Are they Anonymous?
๐ฃ๐: This is not always bad as it takes courage to put yourself out there to the world however, the top projects usually don't mind this.
๐๐ก๐๐๐ค ๐ญ๐ก๐๐ข๐ซ ๐๐๐๐ค๐ข๐ง๐ /๐ข๐ง๐ฏ๐๐ฌ๐ญ๐จ๐ซ๐ฌ
Partnerships are typically displayed on a projectโs website and can be announced through social media.
When you check the team and partnerships and have verified them, the next thing you look out for should be.....
11
๐ ๐๐ก๐๐ข๐ซ ๐๐จ๐๐ข๐๐ฅ ๐๐๐๐ข๐
It is very important to check beyond the website and verify the projects visibility and effective communication with their audience.
๐๐ก๐ข๐ง๐ ๐ฌ ๐ฒ๐จ๐ฎ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ฅ๐จ๐จ๐ค ๐ข๐ง๐ญ๐จ ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โHow many Twitter followers do they have?
๐๐: Don't just go off this as the project may be new and/or might have just gotten their new twitter page set-up.
โCheck when the page was set up and how engaged they are.
โDo they get good engagement on posts (likes,
retweets, comments etc).
๐/๐: Be aware as Developers are known to give out gifts/incentives to people who shill (promote) their tokens or coins.
So just because a project may have a following, doesnโt mean it is warranted.
Check the followers or members of TGs to see if they seem like BOTs or genuine people.
Devs can pay for BOTs to fill up the community.
It is very important to check beyond the website and verify the projects visibility and effective communication with their audience.
๐๐ก๐ข๐ง๐ ๐ฌ ๐ฒ๐จ๐ฎ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ฅ๐จ๐จ๐ค ๐ข๐ง๐ญ๐จ ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โHow many Twitter followers do they have?
๐๐: Don't just go off this as the project may be new and/or might have just gotten their new twitter page set-up.
โCheck when the page was set up and how engaged they are.
โDo they get good engagement on posts (likes,
retweets, comments etc).
๐/๐: Be aware as Developers are known to give out gifts/incentives to people who shill (promote) their tokens or coins.
So just because a project may have a following, doesnโt mean it is warranted.
Check the followers or members of TGs to see if they seem like BOTs or genuine people.
Devs can pay for BOTs to fill up the community.
12
๐๐จ๐ฎ ๐๐๐ง ๐๐ฅ๐ฌ๐จ ๐๐จ ๐ฐ๐๐ฅ๐ฅ ๐ญ๐จ;
โซ Check other social media like Discord, Telegram, and blog sites like Medium.
โซ What does the Discord Channel look like?
โซ What about the Telegram?
โซ Are these channels well maintained?
โซ Is there marketing?
โซ Any influencer/celeb backing?
Note that this can be a good or bad thing.
Top Tier backers have the biggest followings and usually get early info so you may get a gem.
However, they have their own interests in mind and usually get in on presale so don't ape loosely unless its a small amount you can lose happily.
If a random celeb is all of a sudden pushing something and does not seem to know anything about crypto, be vigilant.
They most likely have been paid to shill and have made money regardless.
They may not even have invested.
You can usually tell the people who know what they are talking about compared to the random social media influencer.
Just be smart and don't FOMO blindly.
Next you have to check for....
โซ Check other social media like Discord, Telegram, and blog sites like Medium.
โซ What does the Discord Channel look like?
โซ What about the Telegram?
โซ Are these channels well maintained?
โซ Is there marketing?
โซ Any influencer/celeb backing?
Note that this can be a good or bad thing.
Top Tier backers have the biggest followings and usually get early info so you may get a gem.
However, they have their own interests in mind and usually get in on presale so don't ape loosely unless its a small amount you can lose happily.
If a random celeb is all of a sudden pushing something and does not seem to know anything about crypto, be vigilant.
They most likely have been paid to shill and have made money regardless.
They may not even have invested.
You can usually tell the people who know what they are talking about compared to the random social media influencer.
Just be smart and don't FOMO blindly.
Next you have to check for....
13
๐ ๐๐๐ฑ๐ถ๐๐
Smart contracts pose risk to all DeFi projects.
Legit projects will seek out audits from top firms like Certik.
Projects with audits have increased security as they are scanned for some of the most common exploits.
๐/๐: This does not guarantee anything.
Smart contracts can still be subject to lesser-known exploits, but it is definitely better to invest in a project that has a genuine audit from a top firm.
Now this is where things get more practical....
Read on...
Next is.....
Smart contracts pose risk to all DeFi projects.
Legit projects will seek out audits from top firms like Certik.
Projects with audits have increased security as they are scanned for some of the most common exploits.
๐/๐: This does not guarantee anything.
Smart contracts can still be subject to lesser-known exploits, but it is definitely better to invest in a project that has a genuine audit from a top firm.
Now this is where things get more practical....
Read on...
Next is.....
14
๐ ๐๐๐๐ ๐๐๐ฅ๐/๐๐ซ๐ข๐ฏ๐๐ญ๐ ๐๐๐ฅ๐ ๐๐ซ๐ข๐๐
Understanding the seed or private sale price is crucial when researching a new project.
This information should be one of the first things you consider.
Knowing this early on helps you determine whether it's worth investing time into researching a project further.
Seed sale and private sale prices are more important than presale and IDO prices.
Remember, seed and private investors are the earliest backers of any project.
Often, these investors include major players such as;
โบ Whales
โบ Hedge funds
โบ And Venture capitalists
๐๐จ๐ฆ๐ ๐ฏ๐๐ง๐ญ๐ฎ๐ซ๐ ๐๐๐ฉ๐ข๐ญ๐๐ฅ๐ข๐ฌ๐ญ๐ฌ ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โฏ lFenbushi Capital
โฏ Pantera Capital
โฏ Alameda Research
โฏ Morningstar Ventures
โฏ Animoca Brands
โฏ YGG Games
โฏ Hashed
โฏ a16z and others.
Understanding the seed or private sale price is crucial when researching a new project.
This information should be one of the first things you consider.
Knowing this early on helps you determine whether it's worth investing time into researching a project further.
Seed sale and private sale prices are more important than presale and IDO prices.
Remember, seed and private investors are the earliest backers of any project.
Often, these investors include major players such as;
โบ Whales
โบ Hedge funds
โบ And Venture capitalists
๐๐จ๐ฆ๐ ๐ฏ๐๐ง๐ญ๐ฎ๐ซ๐ ๐๐๐ฉ๐ข๐ญ๐๐ฅ๐ข๐ฌ๐ญ๐ฌ ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โฏ lFenbushi Capital
โฏ Pantera Capital
โฏ Alameda Research
โฏ Morningstar Ventures
โฏ Animoca Brands
โฏ YGG Games
โฏ Hashed
โฏ a16z and others.
15
๐๐๐ญ ๐ฆ๐ ๐ ๐ข๐ฏ๐ ๐ ๐ฉ๐ซ๐๐๐ญ๐ข๐๐๐ฅ ๐๐ฑ๐๐ฆ๐ฉ๐ฅ๐;
if a projectโs seed sale price is $0.01and the presale price is $0.05, seed investors are already up 5x.
If the token then launches and reaches $0.40, that's a 40x return from the seed sale price.
Even if the market cap is still mid-sized, such rapid gains can be a red flag due to the potential for substantial sell pressure from these early investors.
They're already 40X and won't think twice to dump on your the retailer who decides it's the perfect time to invest then
So be careful not to invest into these kinds of projects.
if a projectโs seed sale price is $0.01and the presale price is $0.05, seed investors are already up 5x.
If the token then launches and reaches $0.40, that's a 40x return from the seed sale price.
Even if the market cap is still mid-sized, such rapid gains can be a red flag due to the potential for substantial sell pressure from these early investors.
They're already 40X and won't think twice to dump on your the retailer who decides it's the perfect time to invest then
So be careful not to invest into these kinds of projects.
16
๐๐ผ๐ ๐ฐ๐ฎ๐ป ๐๐ผ๐ ๐ฎ๐๐ผ๐ถ๐ฑ ๐๐ต๐ถ๐?
Always check how many X's the token has done from its seed sale price and the presale price (if applicable), and compare this to the current market price.
The more a token has increased, the more likely it is that there will be heavy selling pressure from early investors and buyers.
Be cautious of influencers who promote projects without understanding how much venture capitalists are already profiting.
You can usually find information about the seed/private sale price in the project's whitepaper or by asking in their community channels on Discord, Telegram, Twitter etc
In other words, Be Vigilant.
The next thing you should look out for is......
Always check how many X's the token has done from its seed sale price and the presale price (if applicable), and compare this to the current market price.
The more a token has increased, the more likely it is that there will be heavy selling pressure from early investors and buyers.
Be cautious of influencers who promote projects without understanding how much venture capitalists are already profiting.
You can usually find information about the seed/private sale price in the project's whitepaper or by asking in their community channels on Discord, Telegram, Twitter etc
In other words, Be Vigilant.
The next thing you should look out for is......
17
๐ ๐๐จ๐ค๐๐ง ๐๐๐ฅ๐๐๐ฌ๐/๐๐ง๐ฅ๐จ๐๐ค๐ฌ ๐๐ง๐ ๐๐จ๐ค๐๐ง ๐๐ง๐ฅ๐จ๐๐ค ๐๐ข๐ณ๐
Another critical aspect to consider is the token release schedule or unlock periods.
Most people refer to this as the vesting schedules of the project.
This includes details on how often tokens are released into circulation
๐๐ก๐๐ฌ๐ ๐ญ๐จ๐ค๐๐ง๐ฌ ๐๐จ๐ฎ๐ฅ๐ ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โTeam tokens
โseed or presale tokens.
Another critical aspect to consider is the token release schedule or unlock periods.
Most people refer to this as the vesting schedules of the project.
This includes details on how often tokens are released into circulation
๐๐ก๐๐ฌ๐ ๐ญ๐จ๐ค๐๐ง๐ฌ ๐๐จ๐ฎ๐ฅ๐ ๐ข๐ง๐๐ฅ๐ฎ๐๐;
โTeam tokens
โseed or presale tokens.
18
Frequent token unlocks can increase the market cap without affecting the price, leading to lower potential gains and a higher chance of price dumps.
At least 90% of the times news of a token unlock is announced, the price tends to drop.
You should already know why, but incase you don't, when tokens sre unlocked, the holders tend to panic and sell especially if they are in huge amounts.
Understanding token unlock schedules can help you avoid buying at the wrong time, even if you are bullish on a project due to strong fundamentals or unique utility.
If you purchase just before a significant token release, increased supply can lead to a price drop due to decreased demand.
There can also be a scenario where despite an upcoming token unlock, the token might not drop as much as expected.
You might have anticipated a huge dump, but there was minimal dump.
Don't be surprised, something interesting happened and it's not magic.
This is where the token unlock size becomes important.
At least 90% of the times news of a token unlock is announced, the price tends to drop.
You should already know why, but incase you don't, when tokens sre unlocked, the holders tend to panic and sell especially if they are in huge amounts.
Understanding token unlock schedules can help you avoid buying at the wrong time, even if you are bullish on a project due to strong fundamentals or unique utility.
If you purchase just before a significant token release, increased supply can lead to a price drop due to decreased demand.
There can also be a scenario where despite an upcoming token unlock, the token might not drop as much as expected.
You might have anticipated a huge dump, but there was minimal dump.
Don't be surprised, something interesting happened and it's not magic.
This is where the token unlock size becomes important.
19
๐ ๐ฉ๐ซ๐๐๐ญ๐ข๐๐๐ฅ ๐๐ฑ๐๐ฆ๐ฉ๐ฅ๐;
If a project has a total supply of 500,000 tokens and a circulating supply of 100,000, an unlock of 40,000 tokens (10% of the remaining supply) increases the circulating supply to 140,000.
With 78.6% of the total supply still out of circulation, the impact on the tokenโs price may be minimal.
And the project would still do well
However, let's reverse the scenario
If a significant portion of the total supply, like 80%, is released into circulation
It can cause FUD and greed as those holding would want to sell to secure capital and at least some profits, leading to a massive sell-off and a significant drop in price.
If you're caught up on this then you'll be used as exit liquidity.
So always research about this to be on the safer side.
The next thing to research about is.....
If a project has a total supply of 500,000 tokens and a circulating supply of 100,000, an unlock of 40,000 tokens (10% of the remaining supply) increases the circulating supply to 140,000.
With 78.6% of the total supply still out of circulation, the impact on the tokenโs price may be minimal.
And the project would still do well
However, let's reverse the scenario
If a significant portion of the total supply, like 80%, is released into circulation
It can cause FUD and greed as those holding would want to sell to secure capital and at least some profits, leading to a massive sell-off and a significant drop in price.
If you're caught up on this then you'll be used as exit liquidity.
So always research about this to be on the safer side.
The next thing to research about is.....
20
๐ ๐๐จ๐ค๐๐ง ๐๐๐จ๐ง๐จ๐ฆ๐ข๐๐ฌ (๐๐จ๐ค๐๐ง ๐๐ฅ๐ฅ๐จ๐๐๐ญ๐ข๐จ๐ง/๐๐ข๐ฌ๐ญ๐ซ๐ข๐๐ฎ๐ญ๐ข๐จ๐ง, ๐๐ฎ๐ฉ๐ฉ๐ฅ๐ฒ, ๐๐ง๐ ๐๐๐ฆ๐๐ง๐)
Itโs important to examine the tokenomics of a project, including how tokens are distributed among the team, seed investors, presalers, the general public, and the liquidity pool.
A healthy distribution is essential for the long-term viability of the project.
If the token distribution isn't healthy, there's no need doing further research as you'd simply be time wasting.
Itโs important to examine the tokenomics of a project, including how tokens are distributed among the team, seed investors, presalers, the general public, and the liquidity pool.
A healthy distribution is essential for the long-term viability of the project.
If the token distribution isn't healthy, there's no need doing further research as you'd simply be time wasting.
21
๐๐ก๐๐ญ ๐๐จ ๐ฒ๐จ๐ฎ ๐๐ก๐๐๐ค ๐ข๐ง ๐ญ๐ก๐ ๐ญ๐จ๐ค๐๐ง๐จ๐ฆ๐ข๐๐ฌ;
โซ Check the total supply of the token.
โซ Is it relatively moderate or high?
Try to understand its supply mechanism.
โซ Is it inflationary or deflationary?
โซ What type of project are we talking about?
Is it
โบ A coin
โบ P2E token
โบ Node token
โบ Reward token
โซ What is the narrative of the token?
Knowing whether a token is constantly increasing in supply (inflationary) or decreasing over time (deflationary) helps you understand the potential for price appreciation.
(Do more research on inflationary and deflationary tokens)
โซ Check the total supply of the token.
โซ Is it relatively moderate or high?
Try to understand its supply mechanism.
โซ Is it inflationary or deflationary?
โซ What type of project are we talking about?
Is it
โบ A coin
โบ P2E token
โบ Node token
โบ Reward token
โซ What is the narrative of the token?
Knowing whether a token is constantly increasing in supply (inflationary) or decreasing over time (deflationary) helps you understand the potential for price appreciation.
(Do more research on inflationary and deflationary tokens)
22
๐ ๐ฉ๐ซ๐๐๐ญ๐ข๐๐๐ฅ ๐๐ฑ๐๐ฆ๐ฉ๐ฅ๐;
If a token is deflationary, its supply decreases over time, increasing its scarcity and potentially driving up its price.
Projects can achieve this by burning tokens or using a negative rebase supply mechanism.
Conversely, inflationary tokens increase in supply, which can lead to lower prices if demand does not keep up.
Research whether the project requires tokens to create nodes, as this can reduce the circulating supply.
Always verify the tokenomics and check resources like;
โฏ CoinMarketCap
โฏ CoinGecko
โฏ DappRadar and
โฏ Blockchain explorers (Bscscan, Etherscan)
For more detailed information.
Also check for the market Capitalization and Token Holders
Always check the market capitalization, as it indicates the overall health and investment level in a token.
Larger market caps are generally considered safer but offer less potential for explosive growth.
Smaller caps may have higher upside potential but come with greater risks, as they can quickly lose value.
Review the number of holders and the distribution of supply among them.
A small number of holders with a large share of the supply poses a risk, as they can dump their tokens at any time.
If the devs or a few holders control a significant portion of the supply, this is another red flag.
Lastly, consider how easy it is to trade the token.
Is it listed on major centralized exchanges (CEXs) like Binance or KuCoin, or is it only available on decentralized exchanges (DEXs) like Uniswap?
Availability on a DEX might indicate that the project is still in its early stages or lacks significant interest.
These days we mainly use bots like maestro bot or Sol trading bot.
You can check the method by which you can get the tokens and how easily they can be bought.
If a token is deflationary, its supply decreases over time, increasing its scarcity and potentially driving up its price.
Projects can achieve this by burning tokens or using a negative rebase supply mechanism.
Conversely, inflationary tokens increase in supply, which can lead to lower prices if demand does not keep up.
Research whether the project requires tokens to create nodes, as this can reduce the circulating supply.
Always verify the tokenomics and check resources like;
โฏ CoinMarketCap
โฏ CoinGecko
โฏ DappRadar and
โฏ Blockchain explorers (Bscscan, Etherscan)
For more detailed information.
Also check for the market Capitalization and Token Holders
Always check the market capitalization, as it indicates the overall health and investment level in a token.
Larger market caps are generally considered safer but offer less potential for explosive growth.
Smaller caps may have higher upside potential but come with greater risks, as they can quickly lose value.
Review the number of holders and the distribution of supply among them.
A small number of holders with a large share of the supply poses a risk, as they can dump their tokens at any time.
If the devs or a few holders control a significant portion of the supply, this is another red flag.
Lastly, consider how easy it is to trade the token.
Is it listed on major centralized exchanges (CEXs) like Binance or KuCoin, or is it only available on decentralized exchanges (DEXs) like Uniswap?
Availability on a DEX might indicate that the project is still in its early stages or lacks significant interest.
These days we mainly use bots like maestro bot or Sol trading bot.
You can check the method by which you can get the tokens and how easily they can be bought.
23
In summary, understanding research methodologies and how to research will help you make informed crypto investments.
Thorough research helps you assess risks and potential rewards.
Thorough research helps you assess risks and potential rewards.
24
Remember this is only a part 1 and the part 2 would have more practical stuffs like;
โฏ Liquidity & TVL of Project
โฏ Marketing
โฏ Utility
โฏ Incoming Catalysts
โฏ Greed Factor
โฏ Trend/Narratives
โฏ Dips Of Trending Tokens
โฏ Determining Your Bias
Anticipate greatness ๐ฅ
โฏ Liquidity & TVL of Project
โฏ Marketing
โฏ Utility
โฏ Incoming Catalysts
โฏ Greed Factor
โฏ Trend/Narratives
โฏ Dips Of Trending Tokens
โฏ Determining Your Bias
Anticipate greatness ๐ฅ
25
Finally, I know you just bookmarked this thread ๐
But no, that means you're dumping it
Go back and learn, learn so you do better.
You're destined for greatness
But no, that means you're dumping it
Go back and learn, learn so you do better.
You're destined for greatness
26
I hope you've found this thread insightful.
Follow me @Ernestofweb3 and turn on post notifications for more.
Like/Retweet the first tweet below ๐
Ernest out!๐ฅท
x.com/Ernestofweb3/sโฆ
Follow me @Ernestofweb3 and turn on post notifications for more.
Like/Retweet the first tweet below ๐
Ernest out!๐ฅท
x.com/Ernestofweb3/sโฆ