Here are the views and steps how to evaluate crypto projects in due diligence.
1. Founder Reference
Always always the most important thing is finding reliable people (Founders). People start and make everything.
Find people you respect who know the founders and ask about founders’ strengths, weaknesses, etc.
Ask yourself: Would I work with this person? If yes, that’s the project you try to find.
2. Size of Opportunity (Market Size)
Size of opportunity would be the size and speed of my profit expansion.
If we select right, the opportunity would be huge aligned with crypto currency fast growth.
But I did some mistakes in the past, I just focused on this market size ignoring the founder and team. So, the project just developed very early stage programs and then nobody used that.
3. Used the Product
If is is possible to use a product, it gives a lot to investors such as the potential of scalability, popularity, value proposition and product offering etc.
After using that, you feel some potential and could explain the potential and differentiated points, it may have some potential.
4. Contact Customer
Utilize discord. Ask the community about the usage, the expectation of growth and compatibility, alternatives, ROI etc. And check if is is sustainable for some time having its own value.
5. Traction Analysis
Through on-chain data, you can see many basic data like volume etc.
6. Is it right time?
Timing could be key. Is it timing dependent project? If yes, why?
Try to figure out why past attempts failed. And why now?
7. Community review & healthiness
Assess the quality of the members
8. Tokens and Value Accrual
The key points are how the token will capture value.
Assess lockups, Issuance rate, release schedule, faucets and sinks, growth loops etc.
9. Competition
Is this project the market leader? If not, is it possible to be the market leader?
Market leader takes all or not?
10. Future Returns and Intuition
Check Sheet
Source: Casey from Paradigm