1. First Clarify: What are the Core Standards of 'Quality Altcoins'?
'Quality' essentially means 'supported by real value', not 'short-term price surges'. Altcoins that genuinely possess long-term value must meet two core conditions: 1. Solve real industry pain points; 2. Have a sustainable ecosystem and landing capability. Coins that rise in the short term due to speculation, pumping, or community marketing do not belong to the 'quality' category.
2. Five Core Dimensions for Screening 'Potential Quality Altcoins' (Extremely High Risk, Proceed with Caution)
From the perspective of 'Risk Control' and 'Value Assessment', one can preliminarily investigate from the following dimensions (not 'stock picking standards', merely 'risk avoidance tools'):
1. Project Fundamentals: The Core to Exclude 'Scam Coins'
Project fundamentals are the cornerstone for judging whether it is 'quality'; 90% of altcoins can be directly excluded based on this dimension.
Authenticity and Logic of the White Paper:
Reject 'Wishful Thinking' White Papers: If a white paper merely piles up trendy buzzwords like 'Metaverse', 'Web3', 'AI + Blockchain' without specific technical paths, landing scenarios, or cost assessments, it is likely a scam coin.
Focus on the Matching Degree of 'Problem - Solution': The white paper must clearly state 'what industry pain points it addresses' (e.g., slow traditional cross-border payments, difficulty in supply chain traceability), and the blockchain solution must be a 'necessary remedy' (not 'blockchain for the sake of blockchain').
Verify Team Background: Team members must have public blockchain, technology, and industry-related resumes (can be verified through LinkedIn, GitHub), and reject projects with 'anonymous teams' or 'celebrity endorsements without actual participation'.
Community and Ecosystem Activity:
The community is not a 'Pump Group': A quality project's community (such as on Discord, Telegram, Twitter/X) should discuss technical progress, product issues, and ecosystem collaborations, rather than just 'showing profits' or 'sloganeering'.
Developer Ecosystem: Check if the project code is open-source (e.g., GitHub repository), if there are continuous code submissions (at least weekly updates), and if there are third-party developers involved (e.g., ecosystem DApp development).
2. Market Data: Avoid 'Liquidity Traps' and 'Manipulation Risks'
Market data for altcoins is often manipulated by market makers, so attention should be paid to the following indicators:
Market Cap and Circulation:
Avoid 'Ultra Low Market Cap Coins': Altcoins with a market cap below $100 million have extremely poor liquidity and can be 'pumped and dumped' by market makers, making it difficult for regular investors to sell.
Focus on 'Circulation Rate': If a project has a high total market cap but the circulating market cap is below 10% (large amounts of tokens not unlocked), beware of 'unlock dump' risks (a surge in circulation post-unlock may lead to a price crash).
Liquidity and Trading Volume:
Only Choose Coins Listed on 'Mainstream Exchanges': Prefer altcoins listed on compliant mainstream exchanges like Binance, Coinbase, Kraken (small exchanges often face issues like 'pump and dump' or 'unable to withdraw').
Exclude 'Abnormal Trading Volume': If an altcoin suddenly experiences a trading volume spike of more than 10 times in a single day without any positive news, it is likely market makers pumping, and it will subsequently drop.
3. Technical Strength: Reject 'Copy-Paste' Projects
The core value of blockchain is technological innovation; 'copying code + renaming it' altcoins have no long-term value.
Core Technological Differentiation:
Reject 'Hitching a Ride on Trends to Modify Code': If a project claims 'Ethereum Fork + AI Features' but only changes the token name and total supply without substantial technical improvements, it is 'pseudo-innovation'.
Focus on Technical Implementation Progress: If a project claims 'supports 100,000 transactions per second (TPS)', verify if there is public testnet data, if there are real application scenarios in use (e.g., a certain e-commerce platform using it for settlement), rather than just staying at 'theoretical TPS'.
Safety and Auditing:
Code should be audited by a third party: Quality projects will have their smart contracts audited by reputable institutions like CertiK or OpenZeppelin and will publish the audit report (projects without audit reports are prone to 'hacker theft' risks).
Historical Security Record: Check if the project has a record of 'hacker attacks' or 'contract vulnerabilities'; if so, assess the team's emergency response capability (e.g., if they compensated promptly or fixed vulnerabilities).
4. Landing Capability and Business Closed Loop: 'Making Money' is Long-term Value
Cryptocurrencies must ultimately return to 'practical value'; projects without landing scenarios will inevitably go to zero.
Are there real users and revenue:
Avoid 'Pure Concept Projects': If a 'Metaverse altcoin' only builds a simple 3D scene, has no active users (daily active users below 1000), and lacks any revenue (e.g., virtual item sales, service fees), it is an 'empty shell project'.
Focus on 'Ecosystem Cooperation and Payment Scenarios': For example, for a DeFi altcoin, is there real demand for lending and exchanging (daily transaction volume, stable lending volume); for a supply chain traceability coin, are there real enterprises (e.g., logistics companies, brand owners) using its services.
Token Economic Model Rationality:
Governance Rights: Token holders can vote to decide on project upgrades, fund usage (like Uniswap's UNI);
Ecosystem Incentives: Users must pay with tokens to use project services (e.g., Filecoin's storage fees);
Dividend Rights: Project revenue is proportionally returned to token holders (with transparent financial disclosure).
Tokens are not 'pure speculation tools': Quality project tokens must have 'practical functions', such as:
5. Regulatory Compliance: Avoid 'Policy Zeroing' Risks
Regulatory policies for cryptocurrencies are important risk points; projects that do not comply with regulations may be directly delisted or banned from trading.
Project registration location and compliance qualifications should preferably be projects registered in regions with clear cryptocurrency regulatory frameworks such as Singapore, the USA, and the EU, and have corresponding compliance qualifications (e.g., MSB license in the USA, MiCA compliance in the EU).
Avoid 'Regulatory Sensitive Areas': Projects involving 'anonymous transactions' (easily used for money laundering), 'illegal financing' (such as non-compliant ICOs), or 'pyramid schemes' (recruiting people for token rewards) are likely to be targeted by regulations and should be directly excluded.
3. Summary: The 'Principles of Altcoin Participation' for Regular Investors
The risk of not participating in altcoins far outweighs the potential rewards. Regular investors should allocate over 99% of their positions in mainstream coins like Bitcoin and Ethereum, treating altcoins merely as 'extremely high-risk speculative attempts' (positions no more than 1%).
Reject 'Chasing Highs and Selling Lows': If an altcoin has surged 10x or 100x, re-entering is likely 'catching the falling knife', beware of 'FOMO (Fear of Missing Out) emotions'.
Set Strict Stop-Loss: If the altcoin price drops 20%-30%, decisively stop-loss to avoid losing all principal due to 'holding the position'.
Do not be superstitious about 'Insider Information': 99% of 'insider information' in the crypto circle are signals released by market makers to lure in buyers, and trusting such information will likely lead to losses.
Lastly, reiterate: The cryptocurrency market has no regulatory protection; the 'quality' of altcoins is a relative concept, and there is no such thing as a 'sure win'.