How to evaluate a new cryptocurrency project in a simplified and useful way, so you don't get deceived by fraudulent projects.

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1. Look at the idea: What problem does the project solve?

Ask yourself: Does this project really provide a real solution that can exist in reality?

For example, does it improve blockchain speed? Does it make payments cheaper? Does it create something new in the market?

If the idea is strong and clear = A positive point.

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2. Supply and demand: Is there demand for the project idea?

Sometimes the idea may be brilliant from a technical standpoint, but it lacks real demand in the market, so the currency ends up dying even if its idea is amazing.

Example:

Project A:

The idea is to build a fast blockchain dedicated solely to storing images in a decentralized manner. Technically, this idea is new, and they have a strong team and open-source code.

But if we come to reality, today most people use Google Drive and have no problem with this.

The result:

There is not enough demand. People are not interested in buying a currency to store their images because the alternatives are easier and stronger so far.

Project B:

The idea is to build a social trading platform where people can see each other’s trades and copy them automatically. The project has a currency used for payments and discounts within the platform.

In reality, people are really looking for easy trading methods, and beginners like to copy professionals.

The result:

There is high demand for this service. This means there is a real market, and the idea serves a large segment.

Always ask these questions:

- Who will use the project?

- What is the incentive that makes the user buy the currency?

- Are there other solutions in the market?

- Why did they choose this project specifically among other projects?

3. The team: Who is behind the project?

Is the team known? Do they have previous experience? Have they worked on successful projects before? Do they have clear social media accounts? Are they visible to the public? Or are they all anonymous?

The professional and clear team = Greater trust.

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4. Tokenomics: How is the currency distributed?

How is the distribution of shares in the currency? What is the share for the project founders? What is the share for the community? What is the share for early investors? Is there a share distribution schedule? Or do all coins drop in the market at once? I look at the total supply of the coin, and whether there is significant inflation or not.

If the share of early investors is large and their share vesting date coincides with the community's share vesting date, or even before the community's share vesting date, this is a very negative signal. It means they will sell their large shares and there will be a strong drop in the currency's price.

Balanced tokenomics = Reducing the chances of price manipulation.

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5. Activity and community:

Do they have Telegram, Discord, or Twitter? Are people interacting with them? How is the interaction, positive or negative? Do they post updates? Do they do live streams and take questions from people and respond to them?

Active communities = A strong driver for project success.

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6. Partnerships:

Do they have real partnerships? With companies, platforms, large blockchains? Or do they just put logos without reliable sources?

In my personal opinion, large partnerships, while being a positive indicator, can also be a potential negative indicator. Because these large entities that give projects partnership opportunities take a large percentage in the form of a share of the project’s currency. These shares are often sold (before the community's shares are distributed) or even when the community receives its share of the currency after the subscription. This issue can cause a severe drop in the currency's price.

Verified partnerships = Real support and maturity in the project.

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7. The actual product:

Do they have a demo version? An app? A working smart contract? Or is it just a project paper and theoretical talk?

A working product = Evidence that the project is not a scam.

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8. Is the currency available on trading platforms?

If the currency is listed on major platforms, this is a sign of market confidence. If it’s not listed, check if it is about to be listed or if they have a plan to be listed on a centralized platform?

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On my Twitter and Telegram account, I’ve provided you with an evaluation template (a ready-made template) that can help you quickly create an evaluation regarding any project you want to research its details.