𝐑𝐞𝐬𝐞𝐚𝐫𝐜𝐡 𝐢𝐧 𝐃𝐞𝐅𝐢 𝐢𝐬 𝐝𝐫𝐚𝐢𝐧𝐢𝐧𝐠! But the same research has made...

13 views Jan 21, 2025 ~10 min read

𝐑𝐞𝐬𝐞𝐚𝐫𝐜𝐡 𝐢𝐧 𝐃𝐞𝐅𝐢 𝐢𝐬 𝐝𝐫𝐚𝐢𝐧𝐢𝐧𝐠!

But the same research has made millionaires on the space.

What did they do differently?

What's that secret research method that you overlook?

I'll show you the hidden research methods they used.

The last one is the ultimate method!

🧵

Before we move on,

You can show support by ▼

Liking 🤎

Reading 📖

Commenting ✏️

Reposting 🔁

and Bookmarking 🏷️for reference and visibility.

𝐖𝐚𝐥𝐤 𝐰𝐢𝐭𝐡 𝐌𝐞 ⬇️

📑 𝐈𝐍𝐓𝐑𝐎𝐃𝐔𝐂𝐓𝐈𝐎𝐍

I promised to deliver a part two to this research methodologies thread so if you're seeing this and you haven't read the first then use the link below 👇 🖇️

If you have then let's continue....

Ernest🧩🖤@Ernestofweb3

𝐈 𝐟𝐚𝐝𝐞𝐝 $𝐃𝐎𝐆𝐒, 𝐛𝐮𝐭 𝐬𝐭𝐢𝐥𝐥 𝐦𝐚𝐝𝐞 𝟏𝟎𝟎𝟎𝐱 𝐨𝐧 𝐚 𝐩𝐫𝐨𝐣𝐞𝐜𝐭 𝐭𝐡𝐚𝐭 𝐝𝐢𝐝𝐧'𝐭 𝐡𝐚𝐯𝐞 𝐬𝐨 𝐦𝐮𝐜𝐡 𝐡𝐲𝐩𝐞.

How?

Research Methodologies!

Here's a hack to knowing real investments from noisy ones in DeFi.

The last one remains my ultimate method ⤓

🌪️ 𝗧𝗛𝗥𝗘𝗔𝗗 𝗦𝗬𝗡𝗢𝗣𝗦𝗜𝗦

Here's an outline of all I'll be talking about in the second part of the research methodologies thread;

➺ Marketing
➺ Utility
➺ Greed Factor
➺ Dips Of Trending Tokens
➺ Determining Your Bias
➺ Conclusion

There were three topics I skipped cause I feel they'd need a particular thread for clearer understanding;

𝐓𝐡𝐞𝐬𝐞 𝐭𝐨𝐩𝐢𝐜𝐬 𝐢𝐧𝐜𝐥𝐮𝐝𝐞;

➺ Liquidity and TVL of a project
➺ Catalysts in Defi
➺ Understanding Trends and narratives

Let's get into it....

📑 𝐌𝐀𝐑𝐊𝐄𝐓𝐈𝐍𝐆

When researching DeFi (Decentralized Finance) projects, evaluating their marketing strategy is crucial for understanding their potential for growth, user adoption, and overall success.

𝐇𝐞𝐫𝐞 𝐚𝐫𝐞 𝐩𝐫𝐚𝐜𝐭𝐢𝐜𝐚𝐥 𝐝𝐞𝐭𝐚𝐢𝐥𝐬 𝐨𝐧 𝐡𝐨𝐰 𝐭𝐨 𝐜𝐡𝐞𝐜𝐤 𝐟𝐨𝐫 𝐚 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬 𝐦𝐚𝐫𝐤𝐞𝐭𝐢𝐧𝐠 𝐩𝐥𝐚𝐧𝐬;

☯ 𝐂𝐡𝐞𝐜𝐤 𝐭𝐡𝐞𝐢𝐫 𝐖𝐞𝐛𝐬𝐢𝐭𝐞 𝐚𝐧𝐝 𝐁𝐫𝐚𝐧𝐝𝐢𝐧𝐠.

Evaluate the project's website for;

↬Professionalism
↬Clarity
↬User-friendliness.

A well-designed website with clear branding indicates a serious approach to marketing.

I Look for consistent use of logos, colors, and messaging, which shows a coherent brand identity.

☯ 𝐂𝐡𝐞𝐜𝐤 𝐭𝐡𝐞𝐢𝐫 𝐒𝐨𝐜𝐢𝐚𝐥 𝐌𝐞𝐝𝐢𝐚 𝐏𝐫𝐞𝐬𝐞𝐧𝐜𝐞

Check platforms like Twitter, Telegram, Discord, and Reddit for the project's activity.

Frequent updates, community engagement, and a growing follower count are positive signs.

Assess the content quality, including posts, threads, AMAs (Ask Me Anything sessions), and community interactions.

☯ 𝐂𝐡𝐞𝐜𝐤 𝐭𝐡𝐞𝐢𝐫 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐲 𝐄𝐧𝐠𝐚𝐠𝐞𝐦𝐞𝐧𝐭𝐬

Strong marketing involves an active and engaged community.

Look at how the team interacts with their community and responds to questions, feedback, and concerns.

Check for community events, such as airdrops, contests, or incentivized campaigns, that encourage participation and growth.

☯ 𝐂𝐡𝐞𝐜𝐤 𝐭𝐡𝐞𝐢𝐫 𝐂𝐨𝐧𝐭𝐞𝐧𝐭 𝐌𝐚𝐫𝐤𝐞𝐭𝐢𝐧𝐠

Analyze the content published by the project, such as blog posts, tutorials, guides, and videos.

Educational content helps attract and retain users by providing value.

Look for partnerships with influencers, content creators that can amplify their message.

☯ 𝐂𝐡𝐞𝐜𝐤 𝐟𝐨𝐫 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬 𝐚𝐧𝐝 𝐂𝐨𝐥𝐥𝐚𝐛𝐨𝐫𝐚𝐭𝐢𝐨𝐧𝐬

Successful marketing often involves strategic partnerships with other projects, influencers, or platforms.

This helps increase visibility and credibility.

Research on any partnerships or collaborations and their impact on the project’s reputation and growth.

☯ 𝐂𝐡𝐞𝐜𝐤 𝐟𝐨𝐫 𝐌𝐚𝐫𝐤𝐞𝐭𝐢𝐧𝐠 𝐑𝐨𝐚𝐝𝐦𝐚𝐩 𝐚𝐧𝐝 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲

A transparent marketing roadmap indicates a planned approach to growth and user acquisition.

Check if the project shares its marketing strategy and goals publicly.

Look for planned campaigns, new initiatives, or upcoming events that signal a proactive marketing approach.

𝐓𝐡𝐞 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐜𝐞 𝐨𝐟 𝐌𝐚𝐫𝐤𝐞𝐭𝐢𝐧𝐠 𝐢𝐧 𝐃𝐞𝐅𝐢 𝐏𝐫𝐨𝐣𝐞𝐜𝐭𝐬

➺ User Acquisition and Retention
➺ Brand Awareness and Trust
➺ Networking Effects
➺ Differentiation in a Competitive Market
➺ Attracting Investors
➺ Crisis Management

By thoroughly assessing a DeFi project's marketing efforts, you can gain insights into its potential for growth, user engagement, and long term viability.

Marketing is not just about promotion

It's about building a robust community, establishing trust, and positioning the project for sustained success in the DeFi ecosystem.

📑 𝐓𝐇𝐄 𝐏𝐑𝐎𝐉𝐄𝐂𝐓𝐒 𝐔𝐓𝐈𝐋𝐈𝐓𝐘

When evaluating a DeFi project, assessing its utility is crucial for understanding certain important things;

𝐓𝐡𝐢𝐬 𝐢𝐧𝐜𝐥𝐮𝐝𝐞;

➺ Its potential impact
➺ Their value proposition
➺ Their long-term sustainability.

𝐇𝐞𝐫𝐞’𝐬 𝐰𝐡𝐚𝐭 𝐭𝐨 𝐫𝐞𝐬𝐞𝐚𝐫𝐜𝐡 𝐰𝐡𝐞𝐧 𝐜𝐡𝐞𝐜𝐤𝐢𝐧𝐠 𝐚 𝐩𝐫𝐨𝐣𝐞𝐜𝐭’𝐬 𝐮𝐭𝐢𝐥𝐢𝐭𝐲 𝐚𝐧𝐝 𝐰𝐡𝐲 𝐢𝐭 𝐢𝐬 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭:

𝐂𝐡𝐞𝐜𝐤 𝐟𝐨𝐫 𝐭𝐡𝐞𝐢𝐫 𝐂𝐨𝐫𝐞 𝐅𝐮𝐧𝐜𝐭𝐢𝐨𝐧𝐚𝐥𝐢𝐭𝐲 𝐚𝐧𝐝 𝐔𝐬𝐞 𝐂𝐚𝐬𝐞𝐬

Understand their Primary Function

➠ What is the main purpose of the project?
➠ What problem does it aim to solve, or what service does it provide?

𝐅𝐨𝐫 𝐞𝐱𝐚𝐦𝐩𝐥𝐞 𝐭𝐡𝐞𝐢𝐫 𝐮𝐭𝐢𝐥𝐢𝐭𝐲 𝐜𝐚𝐧 𝐛𝐞;

➺ Lending
➺ Borrowing
➺ Interoperability
➺ Mapping technology
➺ Yield farming.

Identify how the project is being used or can be used in the real world.

Are there any tangible applications, or is the utility mainly speculative?

☯ 𝐂𝐡𝐞𝐜𝐤 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐓𝐨𝐤𝐞𝐧 𝐔𝐭𝐢𝐥𝐢𝐭𝐲

Determine what the native token is used for.

𝐂𝐨𝐦𝐦𝐨𝐧 𝐮𝐭𝐢𝐥𝐢𝐭𝐢𝐞𝐬 𝐢𝐧𝐜𝐥𝐮𝐝𝐞;

➠ Governance (voting on proposals)
➠ Staking (securing the network or earning rewards)
➠ Payment (transaction fees)

Analyze the factors that drive demand for the token.

Are there incentives for holding, using, or staking the token?

How do these create value for the ecosystem?

Evaluate the technology behind the project

Does it offer any unique features or innovations compared to other projects in the same space?

☯ 𝐂𝐡𝐞𝐜𝐤 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐄𝐜𝐨𝐬𝐲𝐬𝐭𝐞𝐦 𝐚𝐧𝐝 𝐈𝐧𝐭𝐞𝐫𝐨𝐩𝐞𝐫𝐚𝐛𝐢𝐥𝐢𝐭𝐲

Research how the project integrates with other DeFi protocols and services.

Does it form part of a broader ecosystem, enabling seamless interaction with other platforms?

Most importantly......

☯ 𝐂𝐡𝐞𝐜𝐤 𝐟𝐨𝐫 𝐮𝐬𝐞𝐫 𝐞𝐱𝐩𝐞𝐫𝐢𝐞𝐧𝐜𝐞 𝐚𝐧𝐝 𝐚𝐜𝐜𝐞𝐬𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲

Evaluate how easy the projects utility is to use

Evaluate the user interface and experience.

Is the platform accessible and easy to use for both beginners and advanced users?

Look for metrics that indicate user adoption, such as the number of active users, transactions, or total value locked (TVL) in the platform.

↬𝐓𝐡𝐞 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐜𝐞 𝐨𝐟 𝐑𝐞𝐬𝐞𝐚𝐫𝐜𝐡𝐢𝐧𝐠 𝐚 𝐃𝐞𝐟𝐢 𝐏𝐫𝐨𝐣𝐞𝐜𝐭'𝐬 𝐔𝐭𝐢𝐥𝐢𝐭𝐲

➺ Understanding Value Proposition
➺ Assessing Long-Term Viability
➺ Mitigating Risk
➺ Identifying Growth Potential
➺ Enhancing Investment Decisions

By thoroughly researching a DeFi project’s utility, you can make more informed decisions about its potential for success and how it fits into the broader crypto landscape.

Utility is a core factor that influences user adoption, market dynamics, and the overall impact of a project in the decentralized finance ecosystem.

📑 𝐆𝐑𝐄𝐄𝐃 𝐅𝐀𝐂𝐓𝐎𝐑

There's this popular saying that "Be greedy when everyone is fearful and be fearful when everyone is greedy".

Greed factor can significantly impact your research when evaluating a DeFi project in several ways:

Let's get into them...

☯ 𝗠𝗮𝗿𝗸𝗲𝘁 𝗦𝗲𝗻𝘁𝗶𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝗢𝘃𝗲𝗿𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻

Greed can Influence prices

Greed can drive prices of tokens or assets associated with a DeFi project far above their intrinsic value.

This can create a misleading impression of the project's success and sustainability.

☯ 𝐅𝐎𝐌𝐎 (𝐅𝐞𝐚𝐫 𝐨𝐟 𝐌𝐢𝐬𝐬𝐢𝐧𝐠 𝐎𝐮𝐭)

Greedy behavior can lead to rapid inflows of capital into a project, often driven by hype rather than fundamentals.

This can distort your perception of the project's real potential.

In fear of missing out on the project, we tend to ape in and invest without properly researching on the project

This can lead to making wrong trading and investment decisions.

☯ 𝐓𝐡𝐞 𝐇𝐞𝐫𝐝 𝐌𝐞𝐧𝐭𝐚𝐥𝐢𝐭𝐲

Greedy investors tend to follow the crowd, which can create echo chambers where only positive information about a project is shared and amplified, while risks and negative aspects are downplayed or ignored.

In some cases, influential figures or groups may intentionally promote a project to drive prices up for their own benefit, misleading other investors.

☯ 𝐑𝐢𝐬𝐤 𝐔𝐧𝐝𝐞𝐫𝐞𝐬𝐭𝐢𝐦𝐚𝐭𝐢𝐨𝐧

Underestimating risks can lead to Ignoring Red Flags

Greed can lead investors to ignore or rationalize potential risks.

For example, they may overlook issues like unsustainable yield farming rewards, vulnerabilities in smart contracts, or questionable team credentials.

☯ 𝐎𝐯𝐞𝐫-𝐋𝐞𝐯𝐞𝐫𝐚𝐠𝐢𝐧𝐠

Greedy investors might also engage in over-leveraging, taking on excessive risk with borrowed capital, which can inflate short-term gains but also lead to significant losses if the market turns.

☯ 𝐏𝐮𝐦𝐩 𝐚𝐧𝐝 𝐃𝐮𝐦𝐩 𝐒𝐜𝐡𝐞𝐦𝐞𝐬

Projects that attract a lot of greedy investors may be more prone to pump-and-dump schemes, where prices are artificially inflated before a sharp sell-off, leaving latecomers with significant losses.

Greedy investors often focus on quick gains rather than the long-term viability of a project, which can screw market dynamics and make it difficult to assess the project's true potential.

☯ 𝐏𝐬𝐲𝐜𝐡𝐨𝐥𝐨𝐠𝐢𝐜𝐚𝐥 𝐁𝐢𝐚𝐬𝐞𝐬

When researching a project, you may unconsciously seek out information that confirms positive aspects while downplaying or ignoring negative information.

This happens especially when there’s a lot of hype and positive sentiment in the market.

↬𝐇𝐨𝐰 𝐜𝐚𝐧 𝐲𝐨𝐮 𝐦𝐢𝐭𝐢𝐠𝐚𝐭𝐞 𝐭𝐡𝐞 𝐈𝐦𝐩𝐚𝐜𝐭 𝐨𝐟 𝐆𝐫𝐞𝐞𝐝 𝐅𝐚𝐜𝐭𝐨𝐫 𝐢𝐧 𝐑𝐞𝐬𝐞𝐚𝐫𝐜𝐡:

➺ Critical Evaluation.
➺ Diverse Information Sources
➺ Focus on Long-Term Vsibility
➺ Verify Data

By being aware of how greed can influence market behavior and distort information, you can conduct more thorough and objective research on DeFi projects.

📑 𝐃𝐈𝐏𝐒 𝐎𝐅 𝐓𝐑𝐄𝐍𝐃𝐈𝐍𝐆 𝐓𝐎𝐊𝐄𝐍𝐒

Capitalizing on dips of trending tokens as a DeFi analyst and researcher requires a strategic approach to both identify the right opportunities and execute well-timed trades.

𝐇𝐞𝐫𝐞’𝐬 𝐡𝐨𝐰 𝐲𝐨𝐮 𝐜𝐚𝐧 𝐝𝐨 𝐢𝐭 𝐞𝐟𝐟𝐞𝐜𝐭𝐢𝐯𝐞𝐥𝐲:

You need to understand Market Cycles and Sentiment

Familiarize yourself with the different phases of market cycles.

➺ Bear Market
➺ Accumulation Stage
➺ Uptrend
➺ Bull Market
➺ Distribution Stage

Recognizing where a token currently sits within its cycle can help predict potential dips and rebounds.

Assess the intrinsic value of the token by looking at the project's fundamentals, including its technology, use case, team, partnerships, and adoption.

A solid understanding of the project's fundamentals can help you identify whether a dip is a buying opportunity or a sign of deeper issues 😂

☯ 𝐀𝐧𝐚𝐥𝐲𝐳𝐞 𝐭𝐡𝐞 𝐨𝐧-𝐂𝐡𝐚𝐢𝐧 𝐌𝐞𝐭𝐫𝐢𝐜𝐬

Analyze on-chain data like;

➠ Transaction volume
➠ Active addresses
➠ Total Value Locked (TVL)
➠ Token distribution.

These metrics can provide insights into the token’s actual usage and potential for recovery.

☯ 𝐌𝐚𝐤𝐞 𝐮𝐬𝐞 𝐨𝐟 𝐓𝐞𝐜𝐡𝐧𝐢𝐜𝐚𝐥 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬

You can always identify Key Support Levels

Use historical price data to identify key support and resistance levels.

Dips that reach these support levels often provide buying opportunities if they coincide with other indicators.

☯ 𝗔𝗹𝘄𝗮𝘆𝘀 𝗦𝗲𝘁 𝗮 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝗮𝗻𝗱 𝗣𝗹𝗮𝗻

Always have a Trading Plan

Before acting on a dip, have a well-defined trading plan that includes entry and exit points, risk management strategies, and position sizing.

This plan should be based on both your analysis and your risk tolerance.

☯ 𝐋𝐞𝐚𝐫𝐧 𝐭𝐨 𝐃𝐂𝐀 (𝐃𝐨𝐥𝐥𝐚𝐫-𝐂𝐨𝐬𝐭 𝐀𝐯𝐞𝐫𝐚𝐠𝐢𝐧𝐠)

Consider using a dollar-cost averaging strategy, where you invest a fixed amount at regular intervals.

This approach can reduce the impact of short-term volatility and help you build a position over time.

☯ 𝐋𝐞𝐚𝐫𝐧 𝐟𝐫𝐨𝐦 𝐏𝐚𝐬𝐭 𝐃𝐢𝐩𝐬

Always analyze Past Market Behaviors

Study past dips and recoveries of the token and similar assets.

This can provide insights into potential future behavior and help refine your strategy.

By combining these strategies and maintaining a disciplined approach, you can capitalize on dips in trending tokens while managing risks effectively as a DeFi researcher.

We've learnt a whole lot for one day but there's one more.....

📑 𝐃𝐄𝐓𝐄𝐑𝐌𝐈𝐍𝐈𝐍𝐆 𝐘𝐎𝐔𝐑 𝐁𝐈𝐀𝐒

I said this was the most important, but it's just the ultimatum.

𝐀𝐥𝐰𝐚𝐲𝐬 𝐢𝐦𝐩𝐥𝐞𝐦𝐞𝐧𝐭

If you research and do not implement based on what you researched then your research is as good as nothing.

Find a bias based on all you researched on and implement on it.

𝐒𝐞𝐞 𝐲𝐨𝐮 𝐚𝐭 𝐭𝐡𝐞 𝐯𝐞𝐫𝐲 𝐓𝐨𝐩 🔝

📑 𝐂𝐨𝐧𝐜𝐥𝐮𝐬𝐢𝐨𝐧

In conclusion, effective research requires a disciplined approach that prioritizes objective analysis of the project.

By being aware of your biases, relying on data, sticking to a clear strategy, diversifying your investments, staying informed, and regularly reviewing your decisions, you can make more informed and rational choices.

This approach not only helps you capitalize on market opportunities but also protects you from the pitfalls of emotional and biased decision-making, ultimately leading to more sustainable success in the ever-evolving DeFi landscape.

𝐁𝐞 𝐭𝐡𝐞 𝐯𝐞𝐫𝐲 𝐛𝐞𝐬𝐭 𝐚𝐭 𝐰𝐡𝐚𝐭 𝐲𝐨𝐮 𝐝𝐨🏌️

                            20
                        
Finally, I know you just bookmarked this thread 🔖 

But no, that means you're dumping it
Go back and learn, learn so you do better.

You're destined for greatness

I hope you've found this thread helpful.

Follow me @Ernestofweb3 and turn on post notifications for more.

Like/Retweet the first tweet below 👇

Ernest out!🥷

Ernest🧩🖤@Ernestofweb3

𝐑𝐞𝐬𝐞𝐚𝐫𝐜𝐡 𝐢𝐧 𝐃𝐞𝐅𝐢 𝐢𝐬 𝐝𝐫𝐚𝐢𝐧𝐢𝐧𝐠! But the same research has made...

Actions

What You Can Do

Actions

What You Can Do

More in Finance & Crypto

More from @Ernestofweb3