Crypto for dummies: How to assess a projects success!

There are thousands of crypto projects out there. How can we tell if a project is successful?

1. Market cap:
the most obvious one but not the most accurate. Bigger market cap means more money for that project and more popularity.

Downsides? Not every project with big market cap can be called “all around” success. Some of the biggest coins and tokens out there are meme coins. Also a big market cap does not always mean a project is progressing toward its goals.

2. Market cap growth:
Sometimes a better indicator than the market cap itself. Growing popularity and constantly getting bigger can be a very good sign.
It is also a good indicator for project’s marketing success.

Downsides? Growth in market cap should be a long term trend. And steady. Otherwise it might just be a pump. Also again a project might go up just because of hype. Also in a bear market many great projects might not see that much growth.

3. hitting its targets:

What goals a project is aiming for and how successful it was at reaching them?
Both part are important. A project with huge targets which wasn’t delivered is not a success.
That might be one of the reasons many people here don’t like some famous projects: Cardano for example.
Also a project which aims low, even if successful at hitting its targets can’t be called a big success.

Downside?
Understanding how big or small a target/goal is, and how successful a project was at reaching them can be hard for ordinary people. It is more handy for people with enough knowledge about crypto and underlying technology.

4. Providing actual application and real life use:
This is extremely important for long term prospect of projects:
What uses will they have? Why they are important? How many rival projects trying to do the same thing?
Imagine a project which trying to be a store of value. Can it be relevant with BTC around?
Imagine a storage token. Will there be a storage shortage in the future?

Downsides? We might not be able to predict how essential a specific application might be in future.
Also a project might eventually fail at providing a very promising use case.

5. Partnership and involvement of other developers:
A successful project should attract a lots of other teams and developers to work with/on it.
One of the strengths of ETH, Algo and BNB is about how other teams and developers keep improving and changing them.

Downsides? Sometimes it is not about how usable and technically sound a project is but about how big and popular it is. Also not all partnerships have the same weight.

6. Usability:
How many peoples, companies, developers using it? For example no matter how much you criticize a project like SOL ,you shouldn’t forget how many transactions SOL blockchain does per day. Same goes for MATIC, XRP, XML and…

Downsides? It is not “always” about quality. And some blockchains might be too young or have a very specific use case.

7. Security:
Also extremely important.
Three questions you should ask:
Has it been subjected to attacks and hack attempts?
How many times it has failed at repelling those attacks?
And did they effectively fixed that problem?

Downsides? A chain might not have been around for long enough for its security to be tasted. Or it might not have been popular enough to draw attention from hackers.
Who can say new projects are safer than say ETH when many of them are not really tasted against same amount of hack/attack attempts?

What projects do you think were successful and why?

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13 thoughts on “Crypto for dummies: How to assess a projects success!”

  1. Use protocols, be a user, understand what we need in the space. Invest in that. That’s my basic strategy.

    Place your token/contract in tokensniffer.com or similar sites to scan contracts for a more informed decision.

    Even something with an exploited contracted can have surface metrics designed to make people invest. Be careful

    Reply

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