WHAT TO KNOW BEFORE INVESTING IN A CRYPTO PROJECT
Everyone has what they consider before investing in the crypto project, be it coins, tokens, or NFTs, but it all boils down to fundamentals and community. If a project has an excellent fundamental or a great community, it's worth buying because any of the two factors could make a project succeed in crypto; If a project has both a solid fundamental and a massive community, it's most likely going to succeed. But if a project doesn't have good fundamentals or a massive community, it's better to stay away.
(1). Fundamentals: this has to do with what a project was built to do -- its utilities and use cases. But most crypto projects don't launch with viable utilities and use cases already built, but the whitepaper will tell you what they'll build and what problems it will solve. And with that information, you'll know if the problem they're targeting to solve is worth your money.
The next step is to go through their roadmap and see if they are already doing the things listed there, and in the order they said they would be done. This is because once the team behind the project starts to default in executing what they said they'd do, it is a sign that it might not be worth your money. But if everything is going well, then there's no problem.
Another essential thing to check out is the founders of the project. Check the projects the founders have been involved with in the past and how those projects are going. Go to their social, especially Twitter, to check their page and read comments about them because if many people complain about a guy, something might be wrong.
(2). Community: This is about how popular a project is among the crypto community. Meme coins started to boom in 2021, but before their success, many thought it was only an excellent fundamental that could make a project succeed. If a project is doing something useful, it'll most likely attract users, which is true.
But Meme coins has shown that by just having a massive community, a project can do very well and even be among the top 10 cryptos by market cap. So people now take community very seriously because, in a good community, a project is most likely to succeed than one with sound fundamentals. Also, as of now, only a few NFTs have any meaningful utility, so basically, the community is what makes NFTs successful.
To check if a project has a huge community or not, focus on its Twitter page, telegram channel, or discord server. On Twitter, check their followers and the reactions they get from posts that are not talking about give-away. As for discord and telegram, check how many people are on their server and channel and how much genuine interaction is in the group. And anything terrible you see or hear on their Twitter, Telegram, or discord, investigate it properly, so you don't fall for fud.
(3).Additional point: NFTs are illiquid, and their platforms are peer-to-peer, which means anyone can list and sell assets on them, so this won't apply to them.
But with coins or tokens which can be listed on exchanges, there's an additional way to know if you should invest in a project.
If a coin is only listed on decentralized exchanges, it isn't advisable to buy, but there's nothing wrong with them because they can still enter centralized exchanges. , But If a coin is already listed on Binance, OKX, FTX, and other decent exchanges, it means that the exchanges have done some research on those projects and it has passed many of the tests that will make them likely to be successful in the future -- that's if they are not already successful.
Finally, buying a project in its early stages, like decentralized launch pads, can be lucrative. You can make huge money as other investors come into the platform after launch, but it's very risky. Wait for the project to last a little in the market, so you can find data to do proper research with.
This piece is NFA and always DYOR