Fundamental analysis of cryptocurrencies. Design indicators

In the previous review, on-chain metrics were considered – “financial” indicators, multipliers and statistical sources that characterize the coin and the behavior of investors. Project indicators are parameters that characterize the essence of a startup and its development prospects. Whitepaper, project team, etc.

Cryptocurrency design indicators

1. whitepaper

This is a technical document that defines the essence of the platform, its roadmap. What to look for:

• The realism of the idea. You can beautifully and convincingly describe the technology of the Internet of Things, but how much blockchain will be able to introduce into it in the next 5 years is a rhetorical question.
• Platform detail. Description of its work, usefulness for society, analysis of competitive advantages.
• Technology used. Is it open source, what is the consensus algorithm, etc. In part, this can provide answers to questions about scalability and commissions within the network.
• Road map. Plans for the introduction of new technologies, network functionality, the launch of individual blocks of the platform, etc. The more detailed the roadmap, the easier it is to control its implementation. For example, a monthly or at least quarterly breakdown of the map would be a plus.
• Coin distribution scheme. Not a particularly influencing parameter, but useful. Burning and distributing coins doesn’t really affect anything. But information about airdrops would be useful.

It is advisable to look at the forums for the opinions of other investors. True, they may turn out to be cheating bots.

2. project team

Behind every startup is a development team. The only question is whether the developers reveal their name. Most of the transparent platforms on the site indicate the contact details of the team in instant messengers and social networks in a separate section. What you need to pay attention to:

• CEO affiliation with other startups. Often, a new startup is led by a person who previously worked on a team at another well-known platform. For him, this is personal growth – managing his own project. For the investor – an additional plus. True, if his first project “went to the bottom” – this is rather a minus. For example, should the former managers of Mt.Gox be trusted?
• Team reality. What prevents you from copying photos of famous or unknown people to the platform website and communicating with investors on their behalf? It is logical that such a startup will be quickly shut down. Therefore, scammers do not install recognizable photos. But it makes sense to communicate with the team. And check the photo in search engines.

What to do if there is no information about the development team? This is common with meme tokens and DeFi. Alternatively, check the existence of the project on the GITHUB hosting portal. Look at the number of startup participants and their activity. There are relatively many participants, the startup community is active, there are updates – a plus platform.

3. Competitors

The roadmap and Whitepaper give an idea of ​​the niche in which the platform is going to work. How successful it is can be determined by analyzing similar parameters of competitors. And although this is still just a theory, in the future you can track the dynamics of the development of several platforms and then “blend” into a more promising startup.

4. Tokenomics

The management of the volume of coins issued immediately or gradually is described in the Whitepaper. In principle, it doesn’t matter to the investor, 20% of the coins are in free circulation, and 80% are frozen to maintain liquidity, or vice versa. Another point is important here: who has the largest part of the coins. If the developers themselves are the largest holders, or more than 60-70% of the coins are placed on 3-5 anonymous wallets, there is a risk of artificial price manipulation.

Output. If you are going to make money on short-term speculation, buy TOP-50 coins on the wave of the general market growth. If you want to make money on non-standard startups in the long term, try to learn as much as possible about the project. And keep an eye on on-chain metrics – they will tell you the moments of growth / fall of optimism of speculative traders.