Don't say you don't know how to evaluate a project; it's quite simple if you know where to start. Some may ask how to determine if it's good or not; this can be easily done by comparing it to leading projects in the same sector or other impressive projects in the same field for reference.
1. Project Agreement Itself (Fundamentals)
1. Why does it exist, and what problem does it aim to solve?
2. What is the market size, and where are the application scenarios?
3. What advantages and weaknesses does it have compared to similar competitors?
4. Is the on-chain interaction smooth?
5. How has the project's roadmap been executed so far?
6. Growth of daily active users
2. Founding Team (Partially Determines Project Quality and Sustainability)
1. Team's resume and past experience
2. Who are the early investors? Have they received any notable seed investments?
3. Which projects are they partnered with?
(23 is very important; make good use of VCs' selection mechanisms)
3. Financial Indicators (Revenue is Necessary for Survival and Growth)
1. TVL
2. Trading volume
3. Revenue and profit
4. Composition of capital reserves; avoid having too many of your own tokens
5. Are there any short-term incentive programs like airdrops, competitions, or tasks?
All of these can be checked through dashboards like Dune, Token Terminal, and DeFiLlama. 🔗 Check the comments for access!
4. Token Economic Model (Crucial)
1. Token supply: supply quantity, circulating quantity, current market value, fully diluted market value, burning mechanism
2. Token utility: how is gas consumption, is there staking and voting for value accumulation?
3. Token distribution: is the launch method pre-mined or fair distribution, distribution ratio, lock-up, and release time?
5. Risk Management
1. What is the audit status of the protocol contracts?
2. Does the treasury have multi-signature and sufficient capital reserves?
3. Are there any potential regulatory risks?
6. Speculative Economics
1. Is there a narrative that sounds impressive?
2. Is there a good brand image and impressive spokesperson?
3. What is the quality of the community?