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Have you ever invested money in a project and found out all the information about it yourself? Or just listen to this or that person or KOLs call bets on this or that without knowing what that project is about, what technology and products are like?
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Okay, in this article I have summarized for you 10 steps that I think are necessary before you spend money to buy anything, any project or even if it is a Cz call. At least understand for yourself the overview of the project you are preparing to spend money on, and be responsible with your budget. Please consider the odds on social networks as just reference information to have more resources, or find out for yourself so that at least you can be confident and clearly understand what you are putting money down for, what number to bet on, how...etc.
Okay, let's go
STEP 1: CHECK CHART, PRICE, CAPITALIZATION
In my opinion, this is the first and most important step before you spend money on a project. No matter how great and good the project is, if the price is too high, or is climbing, or is overpriced, then ignore it, go find another project, definitely don't buy, don't spend money. Or at least, if you like this project so much, put it on your whatch list for long-term monitoring. Wait for BTC to collapse, reach the buying price that you feel is reasonable, then enter the next line.
"Green give up, red buy" just do it, don't do the opposite :D
This part you can understand is:
+ price is on the way to the top => ignore it or put it on whatch list to monitor later
+ price is creating a new flashy green peak => ignore it or put it on whatch list to monitor later
+ price is moving sideways and accumulating over a long period of time => put it on whatch list to monitor later
=> View charts you can see anywhere, on exchanges like Binance, Pancake, coinecko, coinmarketcap, or Tradingview if you want. In short, you have to check the chart and price, don't listen to what other people tell you. Check it out yourself and feel it...etc
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STEP 2: DETERMINE THE PROJECT PIECE AND BUSINESS MODEL
See which piece of the puzzle the project belongs to in this Crypto market, Layer 1, layer2, AMM Dex, Lending-Borrowng, Launchpad, etc.
If you don't understand, read this series of articles by Uncle Lee Nhat.
After determining it, go to Google to read articles, terms, and information related to that project, go to that area to get an overview: "Ah, this guy works on that area. do it like that..blah blah)
What is the product of the project, where does the revenue come from, who are the target customers (to predict the possibility of success)
For example: In a Lending/borrowing project, the main product is lending tokens or USD depending on the platform, the target audience is users who need cash urgently, want to pledge assets as collateral or abcxyz..etc.
If the project is new, has a unique model, and is expected to develop, give it 1 plus point and put it on the whatch list...etc.
=> You go straight to the project's website, see what it's about, what it's about. If it's too difficult, google it and translate it. Once you've determined it, read more from other sources about that field. Somewhere you don't understand => go on tele to ask, post questions, like this and that..etc. At least you have to understand what the project you are checking is about, at least like that. Avoid waiting until it's time to put down the money and then come back and ask, "Can I have this one, can I cut my losses, can I close it, can I have a dca...etc.
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STEP 3: DEVELOPMENT TEAM, ADVISOR (Team, Bakers & Partners)
See who they are, do they have a lot of experience, are they famous, have they worked on any projects in the past, are they involved in any fud, etc.
See how many members there are, Bakers' influence, whether there are enough personnel to develop, etc.
For example, Bakers, Coinbase or Binance are much better than other small funds. From there we can have different levels of confidence.
If it can be verified that the team is full of skilled names, consider it a plus point and put it on the watch list. Maybe you don't know, but building a GameFi project requires much less human resources than a layer 1 blockchain platform. So, if in step 2 you have determined the project's catelogy Whatever type of project it is, you need to have a forward-looking view of the dev team. For example, building a Layer 1 project like NEAR cannot be done in a hurry with just a few developers. It must be a strong team of experts, consultants, software engineers, programmers, technology...etc. Only then can a good project be built. Okay, if you feel the project has a strong and reputable workforce, give the project 1 plus point, but if not, temporarily put it aside and continue monitoring.
Tips: In this section, most media pages of all projects show the dev team, bakers. If the project is anonymous, the dev team can be skipped or put in the "LOTTERY WINNING" category because if Dev doesn't show his face but shows a chibi image, so I'm not impressed.
Once you know the Dev's name, your job is to vertify it by typing it into Google, checking out the dev's linkedin pages, and going to Crunchbase to see more broadcasts. Follow their twitter, see what they share, mention...etc. If it looks good, give it a plus point, if the dev is anonymous or a chibi meme or has fud, give this a minus point. Just check it out, you'll get used to it in some projects, once it becomes a skill, you'll occasionally see interesting things like: This project's devs building for another project is a no-brainer, I'll get used to it right away.
Do the same with bakers, go to Messari, cypherhunter, crunchbase to check bakers, these are reputable sources that can be double checked.
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STEP 4: FINANCE AND TECHNOLOGY
The total amount of money that the project has raised through the rounds, more or less, combine the bakers' information from step 3 to find out. For example: A layer 1 project that raises capital for only a few million dollars will be very difficult to build successfully. Strong finances are also a plus point, because the team has plenty of money to inflate prices and create marketing effects. As for projects that have raised little capital, perhaps surviving the downtrend season is difficult every day, not to mention explosive development in the future.
Go to project media pages (medium, tele, tw, etc.). Go on crunchbase, Messari find this information..etc.
You have to understand the basics, what technology the team uses, no need to go into too much detail (that's more dev-oriented), but at least have a basic grasp, for example: POS, POW, etc. Or layer 2 uses Plasma, Zk rollup, etc. Just know the basics, at least a rough understanding, you don't have to be too in-depth like the Devs
STEP 5: TOKENOMICS (important)
See how much the marketcap is, see what level it is at, whether the cap is big or small, divide the milestones to put it in which category (low cap, mid cap, large cap) to predict the future. This part is very basic because for a project like SOL, the market cap is around 11 billion dollars. To X5 this number is actually much more difficult than a project in the same field but with potential and cap of 1 billion USD. Something like that, but you can't hold ETH and expect it to be x10 like low cap small cap stocks. The level of profit is small but in return it is safe and secure.
For this part, you can use coinecko or coinmarket cable. There's nothing special or sublime.
Know the total supply and circulating supply to evaluate and forecast. (total supply, circulatory supply), top holders, project shark wallet, see if it's released yet, are you collecting or doing anything...etc.
prices of seed, private, IDO rounds, current prices...etc
After determining which segment the project is in, check the token release schedule (usually future projects are pre-minted).
This means, you have to check how much token holders are allocated to groups, is it reasonable, what is the schedule for unlocking and paying coins...etc.
(I have written a very detailed series about tokenomics in this part, please read it carefully)
Basically, you have to understand that if the team holds more than 30% of the tokens, they must immediately set a warning warning, which means allocating too much to the dev, making it easy to abandon the project early when the price is right. Holding too little is also not good due to loss of motivation..etc.
You should not buy when private or seed coin payout rounds are taking place. Easy to swing the top to meet high discharge pressure...etc. For example: When the C98 project recently unlocked tokens to pay investors, the price dropped quite a bit. About the future if the project does well. It may increase again, but what I want to say here is, you should wait for the VCs, funds, KOLs to receive the tokens and release them all, it's not too late to buy. Don't aim to buy and then swing to the top.
=> this goes to veslab, icodrop, etc.
One more thing for tokenomics is to check the USE CASE. The more uses a token has, the more motivation it has to increase its price. For example, BNB will increase in price in the future because the use case is practical and useful, holding BNB is increasingly beneficial, so in the long run more people will hold BNB to serve different purposes.
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STEP 6: COMMUNITY & MARKETING
If the project wants to be successful, of course it must have a large community. The more the better to spread and grow. It's impossible for a big project to have a few chatters on Telegram. Join media channels like tele, tw, discord, medium..etc. to see what they discuss, whether there are many virtual bots or not... See if the quality of members is good, whether members are discussing the project or cursing, whining, etc.
=> In this part, just join and experience it, practice doing a few projects and you'll get used to it right away, it's not difficult at all, all the project communication channels are pinned on coingecko.
Go to github to see if the project has any new updates. It's okay if you're not an IT person. Just check to see if it works by going directly to the project's github page to see. There are projects that don't bother updating github for half a year => Warning.
Experience for yourself to see if the CM, Dev, team takes good care of members, ask for any information about the project, see if they are enthusiastic. If you take your child to the market => wanring. If it's quiet, give it 1 plus point.
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STEP 7: COMPETITORS
Create a list of competitors to include in your sights and comments. See where it ranks in that segment, is there anything special compared to the remaining projects.
For example: NXM is a large project in the insurance sector. If you invest in Insur b, you need to have a comparison to forecast the potential. Or Uniswap, Pancake are the number 1 DEX exchanges today, if you invest in REF, RAY you also need to look at these big guys. That's why in step 2 I said you have to know what field that project is in and what it does :D
Compare the upside potential between them, estimate the expected price if the project goes on the right track, will the cap be equal to the others... etc.
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STEP 8: DEVELOPMENT ROADMAP (ROAD MAP)
Look at the project roadmap, see if they work quickly or slowly, do they stick to the plan, are there any changes???..etc.
If you see something wrong, go to the media channels to ask about problems that arise (if any). See what the project admins say...etc.
=> Roadmap is a project that must be made public, it can be on a white paper, on medium or website, etc.
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STEP 9: KNOW THE PROJECT'S ON-CHAIN DATA PARAMETERS
Total value lock (TVL), Dapp, puzzle pieces, users (active or not, how many)..etc. (use Defillama, Defipulse)
View the number of wallets, holders, transactions (Go to project explorer or update pages on twitter, for example Celo has a Celo daily update page every day)
Know the daily volume of the project (coingecko)
See how much or how little the project's revenue is (using the tokenterminal website)
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STEP 10: OTHER RELEVANT INFORMATION (if any)
Find out if the project has been AUDIT or purchased insurance from any party, if so, then go through that website to vertify it. For example, you can go to CTK's website to see their list of audited projects.
See if the project belongs to the hot trend: M2E, P2E, Metaverse...etc
Does the project have any fud, any drama, etc.
=> I follow these things on Twitter a lot, KOLs, sites specializing in Crypto and all that, there are dramas they post all over there. Since then, I've been looking forward to catching trends every day.
Okay, so I have compiled 10 basic STEPS to check projects for newbies according to my personal understanding. Please take your time and practice checking, or save it when needed. Every criterion is important, but you need to have an overview and harmonious combination to make a judgment.
It's really not simple to find a potential project among more than 20 thousand projects on the market. However, if you research hard, you will at least eliminate quite a few Scam projects, take money from users, and improve your reading comprehension skills a lot.
If you have any good tips, please share, or if there are any errors, please add them to the article to serve as a resource for everyone.
Thanks for your support.
