Project analysis – step-by-step instructions for the investor

If you came to the digital asset market in its growth phase, then any of your investments most likely, brought you a profit. And in the current realities, the picture turned 180 degrees. Any market, most of the time, is uncertain. Therefore, before investing in something, you need to ask yourself whether it is worth doing it and whether this investment will bring profit. To answer these questions, you need to conduct a detailed analysis of the project where you will invest. We present a list of points that must consider in the study.

Checklist of items to consider when reviewing a project

Official source of information

As a rule, this is the site of the project. However, the official website always has up-to-date and understandable information about the project, a more detailed version of which, as a rule, is located in the Whitepaper/Docs section. This document lets you know what kind of project it is, what benefits it brings, what opportunities it provides, and what plans the project has.

Also, on the official website, there are links to the official groups of the project on social networks.

Investors

An important step is to find out who is already an investor in the project. To do this, you find the following information:

• about the funds that have already entered the project;
•  about the past successful experience of these funds;
•  about the interest of these funds in further work with the project.

To do this, you can use the table with the rating of funds.

Project community

The more activity around the project, the more interesting it is to a more significant number of people, investors, and users. And the more scammers who will try to take your money, it attracts. Always double-check the information on the project’s official website or in the project’s official groups on social networks. Define:

• The activity of the social networks of the project (Telegram, Twitter, Discord, etc.);
• Involvement of project representatives in communication in social networks;
• Availability of an ambassador program and its activity;
• The presence of nodes (whether updates and work are carried out).

Project partners

Another stage is the evaluation of the partner network of the project. We find information about how many and which projects support your chosen project and how these projects can be mutually beneficial to each other.

It will not be superfluous to double-check the information about the partnership on the declared partners’ websites.

Project team

Do not trust anonymous teams and those projects without information about the developers and the team. As a rule, project representatives do not write with an invitation to the project. Instead, try to evaluate the personal qualities of the team members; would you trust them with your money. To do this, answer a series of questions:

• What country is the team from?;
• What is the experience of this team? What projects did they take part in?;
• Are our team members interested in the project’s further development, or are they interested in raising money and developing the token?

Competitors

Compare the project with its competitors:

• Does the project have competitors? If there is, who are they?;
• How widespread and exciting are the project competitors?;
• What are the advantages of the project you have chosen?

Main characteristics

Before investing in a project, you need to understand how long the ban on the sale of tokens will last, which tokens will be available on the listing and under what conditions. You also need to understand the following points:

• What is required for a token?;
• How will it be used?;
• Who will receive tokens at different stages of its development and promotion?;
• Total number of tokens?;
• What percentage of tokens belongs to the team?;
• How many tokens were sold in the Seed and Private rounds?;
• What was the price in these rounds?;
• Conditions (locks, vesting)?;
• How many tokens were distributed to users?;
• How many tokens will be used for rewards?;
• How many tokens are planned to be sold in Public sale?;
• What network does the token support?;
• What liquidity will be provided on the listing?

After answering these questions, you must compare them with competitors’ projects. After that, it will be possible to assess the potential of this project.

Acquisition

If, after studying all the above questions, you decide to invest in this project, then you need to know:

• At what stage and under what conditions is it better to enter the project;
• Terms of sale of tokens;
• The platform where the sales will take place;
• A platform through which you can buy tokens;
• How to calculate the fair price of a token if the deal is not on at a fixed price but on Balancer or Mesa.

If the sale is in the form of a lottery, you should consider registering many accounts to increase your chances.

Depending on the condition and format of the sale, you can make purchases to average your price on the listing.

Sale

• Carefully study the timing of the project.
• Determine in advance the target price, upon reaching which, you will exit the project, fixing the profit.
• Also, pre-determine the price level to leave the project; if prices fall, go against you. You can define multiple exit targets, the first of which allows you to withdraw your initial investment.

Outcome

This article presents far from all methods of analysis and evaluation of projects. Use also your methods and remember that:

• You are solely responsible for all decisions;
• Responsibility for the result also lies with you;
• Be sure to observe risk- and money management;
• Do not invest more than 5% of your deposit in the project.

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