What questions and confusions do you have about investment research? Top VCs, researchers, and traders will answer them on-site!
On June 6, 2025, Binance's Chinese community DC Freedom Voice Activity held the 107th session, specially planned by 137Labs, with the theme 'What questions and confusions do you have about investment research?' Inviting partners Tracy from Waterdrip Capital, Howie, co-founder of RootzLabs and founder of 137Labs, and Oneone, a researcher at 137Labs, to engage in in-depth discussions around investment research systems, emotional management, data judgment, narrative analysis, and other core topics.
In this event focused on 'building underlying capabilities in investment research,' the guests not only systematically sorted the key paths from novice to investment researcher based on personal experiences but also detailed practical techniques for judging the authenticity of narratives, identifying inflated communities, and assessing project value. Whether for industry newcomers hoping to engage in professional investment research or individual users wishing to establish stable investment strategies in a bear market, this discussion provides a highly valuable cognitive framework and actionable advice.
Q1
For crypto investors who are just entering the field of investment research, what core knowledge reserves do you recommend establishing first? What is the most important ability to develop further to become an investor with basic research capabilities?
Tracy believes that as a novice entering the field of investment research in crypto, the first step is to clarify whether one is participating as a retail investor or a professional investor. The two have significant differences in the stages of project engagement and resources. Retail investors mostly engage with projects that are already trading in the secondary market, while professional investors may come across very early-stage projects, or even just a preliminary concept. Therefore, understanding one's role is very important.
For retail investors, it is advisable to start from the basics in accumulating knowledge reserves. First, it is necessary to understand the reason for the birth of Bitcoin, which will lay a solid foundation for understanding the entire crypto industry. Secondly, one should understand the different tracks in the industry, such as DeFi, Web3, NFT, etc., each of which has its unique characteristics and development potential. Then, analyze each project's potential through multi-dimensional research on white papers, tokenomics, team backgrounds, etc. Especially for public chain projects, in-depth research on their protocol mechanisms and security measures is essential.
Moreover, Tracy emphasized that practical operations are very important, especially for projects in the DeFi field. Investors should personally operate wallets, participate in staking, and engage in practical operations, and deeply understand the changes in on-chain data through on-chain platforms (such as DefiLlama). On-chain data is an important basis for investment decisions, and understanding how to interpret this data is crucial.
Lastly, Tracy emphasized the importance of continuous learning. As crypto investors, it is necessary to constantly update one's knowledge and information base, pay attention to the latest industry trends and insights from KOLs, and maintain interaction and learning within the community. These daily learnings and practices can help investors enhance their capabilities in the field of investment research.
Q2
When evaluating some projects, what indicators or dimensions do the guest speakers consider most important? For example, the technical team, token economic model, market demand, etc., how to balance these factors?
Tracy shared that when assessing crypto projects, the most important consideration as an experienced VC investor is 'people.' She emphasized that investment is essentially an investment in people, particularly the capabilities of the founder and the stability of the team. She mentioned that during project evaluation, it is crucial to understand the background and stability of the project's founders and their team, as team stability is one of the key factors determining the success or failure of a project. She also shared her experience, illustrating some reasons for the failure of startup projects—team instability, superficial cooperation between the founder and team members, and a lack of ability to face challenges during the entrepreneurial process.
Regarding factors such as technology and market demand, Tracy believes these are also very important, but they also need to be combined with the stability and execution ability of the team. She thinks that during the entrepreneurial process, founders not only need vision but must also be pragmatic, capable of collaboration, and possess practical problem-solving skills.
Tracy further explained that in the crypto space, investment research capabilities are crucial, but for ordinary investors, successful investment often relies on risk diversification and reasonable asset allocation. She mentioned that while a person may gain returns through strong investment research capabilities, it requires time and deep experience accumulation, and the probability of failure is also high. For long-term stable success, Tracy suggests that investors should ideally find their opportunities in the crypto investment research process, joining research teams or VCs, which will aid in personal growth and financial stability.
Q3
In investment research, the narrative-driven market is often discussed. How do guests discern whether a narrative is a genuine demand catalyst or merely short-term speculation? What models or methods assist in evaluating the sustainability of narratives?
Howie believes this topic needs to be framed within a scope, as institutions operate primarily within a level one and a half to level two TGE deadline. Given the current cycle, the market has not yet undergone large-scale liquidity injections, differing from the previous cycle, making the judgment of narratives particularly important.
Howie suggested a differentiated approach. When assessing the sustainability of narratives, focus on demand rather than pure market speculation. He particularly emphasized that narratives of technological iterations are valuable, such as parallel processing technology and Oracle technology, modular narratives, RWA, and demands with genuine revenue logic, as these technologies are supported by real needs. In contrast, artificially created narratives can be misleading, and the most crucial aspect is not the track, halo, or name, but to strip these away and study the specific problems they solve and the clarity of market demand. The sustainability of such demand can usually ensure the long-term development of the project in the market.
In evaluations, Howie further mentioned that investors should pay attention to the project's market share and growth potential. He cited examples where certain technological narratives occur, such as upgrade narratives, and investors should assess how much market share the technology or project can occupy in the current market, and whether it has the capability to further expand its market share in the future.
Moreover, Howie emphasized that for long-term investment targets, assessing product strength and innovation capability is very crucial. He believes that the market's hotspots change rapidly; short-term speculation can drive price fluctuations, but if a project can continue to innovate and meet market demands, it is more likely to gain market share and investment returns in the long run. Therefore, investors should center their judgments on demand and prudently assess the long-term value behind narratives.
Q4
How to assess the real activity level of a community, especially when there are phenomena of inflated numbers and empty operations within the project community? What indicators or behaviors can reflect the intrinsic value of the community, rather than just speculative hype?
Howie believes that when assessing a community's real activity level, it is most important to distinguish between 'hype' and 'real activity level.' He thinks that one should not merely chase hype but should evaluate a project's true value from a more systematic perspective. The project's hype is typically a process, usually starting from the project's birth, the launch of technological directions, the publicity of institutions and investment rounds, and then social media promotion. Community hype often reflects this series of processes in the later stages, allowing ample time for follow-up and judgment.
Howie stated that from the perspective of institutional investment, hype is often uncontrollable and difficult to gauge accurately. Investors can only predict whether a project has sustainable viability through long-term observation and data accumulation. Therefore, judging the authenticity of a community cannot solely rely on hype data, but requires more forward-looking analysis. For instance, in the early stages, investors need to pay attention to the team's background, the founder's experiences, the marketing department's capabilities, etc. Whether the team has Web3 experience and whether its members have successful entrepreneurial backgrounds are key indicators. For many emerging projects, Howie particularly emphasized avoiding interference from Web2 teams, as these teams may lack the foundational genes for Web3.
When evaluating projects, Howie mentioned that clues can be obtained through some data platforms, such as rootdata. These platforms provide a lot of valuable fundamental data that can help investors grasp a project's potential and resource accessibility before the TGE. By combining this data with background investigations, investors can more accurately assess the project's technological innovation capabilities, market capabilities, financing capabilities, and the sustainability of the resources behind it.
The project will have opportunities to showcase activities like exchange wallets before TGE. It is more feasible to select projects worth following up on for research based on the aforementioned judgment criteria than to rely on market hype.
Overall, Howie emphasized avoiding chasing short-term hype, and instead focusing on assessing a project's long-term development potential. Through detailed analysis of team backgrounds, community behavior, and support from data platforms, investors can more rationally judge whether a project has a genuinely active community and intrinsic value.
Q5
How to evaluate the validity and reliability of on-chain data, especially when faced with vast amounts of data, how to avoid creating a 'data illusion'? Specifically, what data metrics are most critical in investment research? How to determine whether the data genuinely reflects user behavior or is merely inflated or manipulated?
Howie shared several key points when evaluating on-chain data. Firstly, he mentioned that the ecological development of a project takes time to accumulate. For a project, it may take nearly a year from its birth to TGE, allowing investors to conduct long-term monitoring and in-depth research. Through observation, investors can sense the ecological vitality of the project and whether the team has innovative thinking, especially if they have the Web3 mindset.
Howie emphasized that in investment research, some key data indicators are indispensable, especially TVL, active addresses, and the number of token holders. These indicators can effectively reflect a project’s level of activity and participation in the DeFi ecosystem. However, he also pointed out that investors should remain highly vigilant about the sources of data, as a large amount of data can easily lead to a 'data illusion.'
After TGE, the project's focus is on how to retain users, and the foundation for retaining users is profitability and operational capability, even the long-term incentive methods and effects adopted are worth observing more.
Regarding how to judge whether data reflects real user behavior, Howie proposed that the key is not whether one can distinguish between manual operations and automated machine inflations. He emphasized whether the project has genuine profit logic or survival capability.
Q6
For crypto investors just entering the field of investment research, what core knowledge reserves should they establish first? And what is the most important ability? How to determine the three key core points when researching a new project?
Oneone shared how he views crypto projects from the perspective of a novice in investment research and proposed three core points that are most critical for beginners. Firstly, he emphasized the importance of capital background. Oneone mentioned that projects invested in by reputable investment institutions, such as A16Z, Binance Labs, and Coinbase, generally have a higher probability of success. Beginners can start by looking into the funding background of a project to understand the sources of funding and investors behind it, thereby filtering out projects with greater potential. Especially for early-stage projects, the background and resources of investment institutions can provide significant support.
Secondly, Oneone suggested paying attention to technical capabilities. He pointed out that beginners should focus on the project's technical abilities, especially in the public chain and DeFi fields. The technical core includes consensus mechanisms, product gameplay, and innovation. He recommended that beginners start with the project's technical white paper to deeply understand the technology framework, consensus mechanism, and actual application scenarios of the project. Through this information, investors can better assess the project's technical strength and market appeal.
Finally, Oneone believes that the demand of the project is a key factor in assessing its potential. He emphasized that the project's success ultimately depends on market demand. Besides focusing on the project's technology and capital background, beginners should also pay attention to whether the project can meet actual market needs. User demand is the core driving force behind project development, and whether the project can attract enough users and sustain growth in TVL are all important indicators for assessing demand. Through these, novice investors can better judge the project's long-term potential.
Oneone summarized that investors should avoid blindly chasing market hype and instead focus on whether a project has long-term viability from its fundamentals. He reminded beginners that analyzing from three core dimensions: technology, capital, and demand can help them more rationally evaluate projects rather than being misled by short-term market fluctuations.
Q7
How to identify the authenticity of technology in this non-technical background? Are there materials or frameworks suitable for investment research participants to learn the technical essentials?
Oneone provided several practical methods for how to identify the authenticity of technology in the absence of a technical background. Firstly, he clearly pointed out that individuals without a technical background cannot directly assess the truth of technology but can indirectly judge a project's reliability by discerning the authenticity of the project team and demand. He suggested that the most important thing is to first focus on the founders and teams behind the project, assessing their credibility by reviewing their past successes and failures. For instance, tools like Rootdata can be used to check the founders' past investment records, identify which projects they invested in, and which failed, thereby helping to filter out potential scam projects.
Secondly, Oneone mentioned that the demand of the project is another important factor in judging its feasibility and authenticity. For example, if the demand of a project seems very forced or overly reliant on speculation rather than actual market demand, it may just be a short-term speculative project. Conversely, projects that genuinely have demand will have clear market positioning and sustainable development potential. Therefore, Oneone emphasized the need to evaluate the authenticity of demand to decide whether to invest.
Regarding how to learn technical essentials, Oneone stated that although there is no unified learning platform, the most basic and practical learning materials are the project's white papers and documentation, which can help investment researchers better understand the project's technical architecture and goals. He mentioned that by reading these materials, researchers can gradually accumulate their understanding of technology and form their investment frameworks based on that. Additionally, when encountering technical content that is difficult to understand, AI tools can be used to assist in comprehension.
In summary, Oneone's perspective is that by starting from the founding team, validating demand, and reviewing project documents, non-technical investment researchers can effectively avoid being misled by the complexity of technology and make more rational and scientific investment decisions. Meanwhile, as experience accumulates, investment researchers can gradually build their technical frameworks and enhance their ability to identify the authenticity of technology.
Q8
For investors just entering the field of investment research, what aspects are most easily overlooked when constructing an investment research framework? Are there investment research templates suitable for beginners?
Howie believes this question should be answered from multiple levels, as the investment research framework continues to evolve with the market. Looking back at the previous investment research journey, particularly in the early stages of the market cycle in 2017, the focus was mainly on new concepts, new technologies, and market hype. By the time of the DeFi explosion, the market had begun to gradually pay attention to the construction of demand and infrastructure, at which point investors needed to emphasize the alignment of underlying technology and user needs, rather than just market hype.
As the market matures further, especially at this stage, Howie pointed out that the construction of the investment research framework should focus more on the depth of demand and technology, rather than merely chasing hype. For beginners in investment research, the most easily overlooked aspect is the authenticity of demand and the feasibility of technology, and the market will gradually mature to possess mature models similar to the U.S. stock market.
Howie believes that when constructing an investment research framework, the work should be divided into several key links. First, it is essential to understand the basic structure and ecosystem of the entire crypto market, especially the main tracks: public chain track, DeFi track, AI track, RWA track, depin, etc. Beginners need to understand the market opportunities in each track and the application and development potential of the underlying technologies. The public chain track is a very typical example. Howie mentioned that for public chains, technology, resources, financing capabilities, and operational ecological capabilities are very core.
Howie emphasized that an experienced and stable team can make more appropriate decisions when facing project challenges. Conversely, the instability of the team or lack of professional technical background may affect the project's execution ability, leading to its ultimate failure.
Secondly, the authenticity of demand is a key factor in a project's success. Howie pointed out that in the early stages, many projects might attract investors through overly optimistic publicity, but if the project does not address actual market needs, or if the demand does not have sufficient long-term sustainability, then even with significant capital inflows in the short term, these projects are unlikely to go far.
Finally, Howie noted that the core of the investment research framework lies in focusing on the project's technical feasibility, the sustainability of demand, and the team's execution capability. Some aspects may not be easily reflected in the white paper, but institutions can gain insights through in-depth communication and investigation of team members. Secondary investors need to continuously monitor market dynamics and project progress. At the same time, he reminded beginners not to blindly follow the hype but to conduct in-depth analysis from the technical and demand perspectives.
Q9
Many projects now are just to issue tokens, then cash out quickly. How can one judge whether a project intends to develop long-term, or is just in it for a quick profit without further construction? What clues can be found in the publicly available information from the project side?
Oneone mentioned that reviewing a project's roadmap is an important step. The project's roadmap can not only show its short-term goals but also reveal its long-term plans. A project focused on long-term development will clearly outline its development plans for the coming years in its roadmap, rather than just short-term actions like issuing tokens or trading. Oneone suggested using AI tools (like Grok) to examine the project's tokenomics to help assess its long-term viability, thus understanding whether the project's economic model has stable long-term growth potential.
Secondly, Oneone mentioned that as participants in the secondary market, there is no need to have an overly detailed grasp of the technical depths of every project, but one must assess the project's long-term development potential through understanding the fundamentals. With these tools, we can better see whether a project has practical use cases and demand, rather than relying solely on short-term speculation.
In summary, Oneone emphasized that understanding a project's fundamentals and whether its roadmap has plans for long-term development is an important factor in determining whether a project truly intends to build long-term.
Q10
How to avoid the impact of FOMO on investment research decisions? Are there any ways to adjust one's mindset that can help us invest rationally?
Tracy believes it is very difficult to completely avoid FOMO. She shared an example to help us understand how to avoid excessive anxiety over hot projects in the market. She mentioned that a few years ago, they invested in a project called Swarm, and by 2021, when the project was about to TGE, it had very high hype in the OTC primary market because of the strong momentum of Filecoin as a leader in the storage track. Swarm was both a star project in the storage track and backed by the Ethereum Foundation, and the market had high expectations for it, believing there would be huge demand in the future and that its market performance after listing would be impressive, resulting in extremely high FOMO sentiment.
However, even if a project is widely optimistic, the price at which Swarm launched on Coinlist was far below the price in the OTC market, leading to significant losses for many early OTC investors due to excessive market speculation. Tracy mentioned that she had hinted to many investors that the OTC price was already too high, urging them to return to rationality and proceed cautiously, but most still insisted on buying, unable to resist the FOMO sentiment.
From this example, Tracy concluded that investment must return to fundamentals rather than follow market hype. Market trends are often short-lived, like the currently popular meme coins, whose hype usually lasts only a few days. To avoid FOMO, what investors need to do is to remain rational and clear-headed. Specifically, investors need to ask themselves several questions: What is the overall market value of the project? What track is it in? Then compare these metrics with similar projects to assess where the project's ceiling is and whether it can truly achieve long-term growth.
In addition, Tracy also emphasized the importance of the background of investment institutions. Although investment institutions cannot guarantee the success of a project, they can provide individual investors with certain reference value. For instance, some data mentioned by Tracy, the latest statistics conducted by Rootdata on VC investment performance targeting over 50 accumulated investment projects show that many VC investment projects have a mortality rate as high as 30%, with some even exceeding 60%. However, Tracy also added that VCs operate in high-risk, high-return tracks. Even if some VC investment projects have a high mortality rate, it does not mean they are not profitable. Perhaps 60% of the projects failed, but a few projects yielded hundreds of times returns, which brought huge returns to VCs, so the overall probability of making money is still quite significant. Therefore, although one cannot fully rely on VC-invested projects, the reference value they provide should not be ignored.
Conclusion
During this AMA event, guests shared their practical experiences and methodologies around various core issues in crypto investment research, such as knowledge reserves, narrative discernment, data judgment, and emotional management. From 'how to get started' to 'how to advance,' from 'avoiding FOMO' to 'identifying long-term value,' each guest's perspective provided participants with clear directions and practical references. It is hoped that this sharing can help more users establish their own investment research systems in the crypto market and make more rational and robust decisions.
This article is for sharing and discussion only and does not constitute investment advice.
