A Newbie 101 Framework for Investing in Crypto/Blockchain Industry

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4 min read

When researching a cryptocurrency project before investing, it's important to consider a variety of factors. These can include the project's funding, team, developers, earning potential outside of the crypto market, tokenomics, community, use cases, roadmap, user base, competitors, and risks. Understanding a project's tokenomics, or the study of its economics is particularly important. A good tokenomic model should be transparent, fair, and feasible, and should demonstrate a clear plan for value accrual for both the project and its token holders. It's essential to thoroughly research and evaluate these factors before investing in any cryptocurrency project.

Funding: A project's funding information can be found by researching the project's website, and social media, and asking the team directly on their Telegram or Discord.

Team: The team's information can be found on their website, social media, and LinkedIn, and can be confirmed by asking on their Telegram or Discord.

Developers: A project's developers can be researched by checking their LinkedIn profiles and GitHub activity. Earning fiat outside of crypto: This information can typically be found on the project's website or whitepaper, and can be confirmed by asking on their Telegram or Discord.

Tokenomics -Value accrual: This can be found on the project's website or whitepaper, and may require some calculations to understand. The community on Telegram or Discord can also be asked for assistance.

Tokenomics - Investors: The project's whitepaper and website can be researched for information about investors, as well as by doing a Google search. It's worth noting that investors may not always participate in presale, and may instead accumulate from the spot market.

Tokenomics is the study of a cryptocurrency's economics, including its supply and demand, as well as how it is used and distributed within its ecosystem. A good tokenomic model for an investor is one that demonstrates a clear and feasible plan for value accrual, has a strong and active community, and is backed by reputable investors. On the other hand, a poor tokenomic model may have unclear or unrealistic plans for value accrual, a weak or inactive community, and lack significant investor support.

It's important to thoroughly research and understand a project's tokenomics before investing, as it can play a significant role in the potential success and growth of the project. Some key factors to consider when evaluating a project's tokenomics include:

Token supply: The total number of tokens that will be created, as well as the distribution of those tokens among stakeholders (e.g. founders, investors, community members).

Token distribution: The plan for how the tokens will be distributed, including through mining, airdrops, initial coin offerings (ICOs), and other means.

Token utility: The use cases for the token within the project's ecosystem, and how it drives demand for the token.

Token burning: Some projects may implement a token burning mechanism, where a portion of the token supply is permanently removed from circulation, potentially increasing the value of the remaining tokens.

Token vesting: Some projects may have vesting schedules for the tokens held by the team or investors, which can help align incentives and prevent tokens from being dumped on the market. Overall, a good tokenomic model should be transparent, fair, and feasible, and should demonstrate a clear plan for value accrual for both the project and its token holders.

Community: The strength of a project's community can be determined by spending time in their Telegram or Discord and observing their Twitter engagement.

Use cases: A project's use cases can be found on their website and whitepaper, and it's beneficial if the use case is applicable in a bear market.

Roadmap: A project's roadmap can typically be found on their website or blog, and can be confirmed by asking on their Telegram or Discord.

Users: Information about a project's user base can be found by spending time in their Telegram or Discord, observing the activity and engagement of the team and community.

Competitors: Competitor research can be done by looking at competitor whitepapers, websites, and communities.

Risks: Risks can be identified through competitor research, by looking at a project's website, whitepaper, and by spending time in their Telegram or Discord.