In this article, we will introduce how to judge whether a blockchain project is of high quality and some evaluation methods before investing in blockchain projects to help readers better invest in blockchain projects to protect your property security.
Poor-quality blockchain projects usually use factors such as greed in human nature and unprofessional investment methods to commit fraud. So how to avoid stepping on the pit and make your judgment stronger? First of all, it is necessary to identify what false propaganda the poor-quality project will have, which usually has the following characteristics:
Promise high returns
Blockchain scam projects often promise very high returns, such as yields of more than 100%, Daily Fixed Income, etc. Such high returns are often unsustainable and unrealistic in order to attract investors' attention.
Lack of transparency and information disclosure
Fraudulent projects usually do not disclose complete project information and financial reports, nor do they disclose information about team members, making it difficult to assess the true situation and credibility of the project.
The technology is immature or there is no technical support at all
Many blockchain fraud projects claim to have leading technical support, but in fact these technologies are often immature or non-existent. Investors need to carefully understand technical solutions and white papers and other technical docs to judge the technical strength and feasibility of the project.
Mandatory marketing and recruitment offline
Fraud programs usually force investors to recruit more downlines, thereby obtaining more investment and profits. This forced marketing and recruitment of downlines is very dangerous and may lead to losses for investors.
False propaganda and speculation
Many blockchain fraud projects will attract the attention of investors through false publicity and speculation, such as false coverage, fake social media accounts, malicious advertisements, etc., to create false market heat and investment enthusiasm.
In short, investors need to be vigilant, carefully understand the real situation and risks of blockchain projects, and avoid being defrauded by inferior blockchain projects. If investors encounter suspicious blockchain projects, they should report to the police and regulatory authorities in time.
Therefore, the evaluation of blockchain projects has become particularly important. More professional skills and knowledge are needed. Next, I will introduce some methods of evaluating blockchain projects to help investors identify and avoid investing in inferior or fraudulent projects, and achieve safer and more effective investments.
I. Core Team: The first rule is that the core team cannot be anonymous. We want to see people who own the job and are accountable to it, and want to see some kind of track record - whether in Web2 or Web3. Basically, we are looking for great people who are suitable for long-term investment.
II. Supporters: Who funded the project? What is their reputation? Are they involved in the industry for a long time? What percentage of tokens do they get? How long is their lock-up period? Do they have other investments in this area? Do they work with the core team, provide resources and help as needed?
III. Product/Market Fit and Business Model: What is the business model and why is it better? What is the product? What blockchains is it deployed on? Who is using it and why? Are there other services integrated with it to complement the project? Are the economic incentives on the market supply side sound?
IV. Economic Model: How many tokens are in the market? What is the total supply? What is the allocation ratio of tokens to insiders and the public? How long is the lock-up period for insiders? Does the token have utility beyond governance votes? How does the value of the token accumulate? Does the network buy back or destroy tokens based on usage? Can users pledge assets to provide services and earn income? Can users vote to redirect a portion of the protocol revenue back to the treasury or token holders when appropriate?
V. Security Audit: Is the smart contract audited? By whom? What type of audit was conducted? Are there any unresolved issues? Do they have a white hat bounty program to incentivize outsiders to field test the code?
Community Governance: Does the project have a strong community? Are people talking about it on Twitter? Does the founder have a large Twitter following? Is there an active Discord server? What are its community members discussing? These things are important.
Volume/Liquidity: How much trading volume does the project receive per day? Which trading platforms is it listed on? Many small cap tokens have low trading volume.
To sum up, judging the pros and cons of blockchain projects needs to consider multiple factors. Investors need to comprehensively consider factors such as the project's technical strength, team background, supporters, business model, economic model area, competitive advantage, market potential, security and stability, community governance, and liquidity to make wise investment decisions. The mission of X Exchange is to provide users with a safer, more efficient and convenient digital asset trading experience through intelligent technology and Web2.5.
Finally, considering industry prospects and regulatory environments is also an important factor in evaluating blockchain projects, and understanding the development trend and future potential of the industry where the project is located. In the article " A collection of ultra-practical blockchain project analysis tools ", several blockchain project analysis tools are introduced from different angles, which can help investors judge blockchain projects more conveniently.
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