A must-have for newbies in the cryptocurrency circle: How to choose value coins, six dimensions to capture them all!
With the growing prosperity of the cryptocurrency market, more and more novice investors are eager to try, hoping to achieve a leap in wealth in this field full of opportunities. However, faced with a wide range of cryptocurrency projects, how to choose truly valuable coins has become the most concerned issue for novices. Today, we will reveal the six dimensions of how to choose value coins to help novice investors find their own treasures in this complex market!
1. In-depth exploration of project protocols
For a good project, first look at its protocol itself. You need to understand why it exists, what problems it solves, and its market size and landing scenarios. At the same time, compare similar competing products to find out its strengths and weaknesses. The execution of the project's roadmap and the growth of the number of daily active users are also important reference indicators.
2. Understand the background of the founding team
The resume and past experience of the founding team directly determine the quality and continuity of the project. You need to understand their background, past experience and partners. At the same time, pay attention to who the early investors are and whether they have obtained well-known seed investments.
3. Master the financial indicators
Only with income can you survive and pull the market. You need to pay attention to the TVL (total locked volume), trading volume, income and profit, and fund reserve composition of the project. Avoid choosing projects where your own token accounts for too high a proportion of the fund reserve. These financial indicators can be queried through tools such as the dashboard Dune, Token Terminal and DeFiLlama.
4. Analyze the Token Economic Model
The Token economic model is the core of the project. You need to understand the supply, circulation, current market value, fully diluted market value and destruction mechanism of the token. At the same time, pay attention to the utility of the token, such as gas consumption, staking and voting. The launch method, distribution ratio, lock-up and release time of the token are also factors you need to consider.
5. Risk management cannot be ignored
Risk management is crucial in the investment process. You need to understand whether the project's protocol contract has been audited, whether the treasury has multiple signatures and sufficient fund reserves. At the same time, pay attention to whether the project has potential regulatory risks.
Six, hype economics can help you
Although it sounds a bit "mysterious", hype economics does play an important role in the currency circle. A narrative that sounds awesome, a good brand image, awesome platformers, and a high-quality community can all add points to the project. Of course, this does not mean that you have to blindly follow the trend, but to make rational judgments based on a full understanding of the project.
Through the analysis of the above six dimensions, I believe you have a deeper understanding of how to select value coins. In the investment process, it is very important to remain rational, cautious and patient. I hope this article can help you find truly valuable projects in the currency circle and achieve a leap in wealth!
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