Many times we find a project that really catches our attention, but for nothing in the world should we enter without doing a previous investigation. Why? Well, we will be investing not only time, we may need to invest a considerable amount of money that we should afford, but because it is something that can be extended indefinitely, we will probably waste money and we will not qualify for the rewards that the project has planned, because everything is based on what position we are in relation to the other participants.
And it is necessary to observe some criteria that make that project promising and that it has a certain potential at the time of launch. In most cases we focus on projects that are in their testnet stage, which suggests that participation is totally free (to a certain extent). Sometimes, the scarcity of test tokens means that we have to resort to other ways of acquiring them, as they are not only a way to exchange tokens and access DeFi, but also the token that has the most value, simply because it is the way to cover gas expenses.
What criteria are the most relevant when analyzing the potential of a project and whether we should participate or not? I would possibly mention the following:
1. Transparency and security
The first thing I would see would be that the project is run by real people so as not to fall into scam projects. Also, it would be a good way to know who is involved in the development process, which is divided into stages in which the project itself matures. With respect to security, it is essential that the project has gone through rigorous phases of security testing, so there should be at some point a firm that audits its technology and thus certifies that the standard security standards are covered. This undoubtedly offers the user enormous peace of mind, especially if they can verify that there is a certain presence in social networks, where they can monitor the activity, growth and scope of the project to the world.
2. Growth through funding rounds
I think this is the most important section, especially if we are talking about a blockchain in which large participation is expected. With this in mind we can ensure that large investments are a great incentive for users to experiment with the project's network, because there is likely to be an airdrop where a percentage of that funding is distributed. The funding itself is likely to be earmarked for improving the technology being built, but also for other uses, such as marketing access and obviously paying developers.
What I am starting to consult are sites where I can interpret the data that makes a project of interest to my expectations. I have come across two very good sites that highlight vital information to decide whether to start or continue our activity.
On the one hand we have Crypto fundraising, which gives us direct information about which are the social networks of the project, its official website, in which category it is (something very important to consider) because if it is based on Ethereum, it is possibly compatible with EVM, as we can also know how much funding it has reached and which are the firms and participations with which it has been contracted. In addition to an introduction that synthesizes what we should know about the project, which serves us to compare against other projects of similar technology, but perhaps less funding or popularity.
In this example I chose MONAD, which is going through its testnet stage, in which we are actively participating. As of today we are almost close to 60 million participants, which shows how scalable this first layer project is.
The good thing is that the site also offers us details about these funding rounds, through news that drastically complement our information. So in a way we have more tools with which to decide our participation.
Currently MONAD has managed to reach $244 million in funding, thanks to a round led by the firm Paradigm, with the participation of investors such as Coinbase Ventures and Electric Capital among others.
On the other hand Crypto Rank has the possibility to see the fundraising of a large number of projects, but we may not find the one we are looking for. However, this is compensated by the fact that we can find important information about it. It is even possible to find a guide on how to participate in a testnet, as well as relevant news in a feed that shows how a project is evolving, and what partnerships it has achieved over time. Partnerships, or collaborations, allow a project to exchange technology with another, implementing a substantial improvement in the whole ecosystem that is developing and expanding.
In this case I have opted for Soneium to see what the site where we consult information has to offer. This project has also launched its testnet, although I don't think it will have the same impact that MONAD has achieved, due to its relationship or similarity with the great Solana ecosystem. Some even say that it could be the next “Solana Killer”.
The information we need to consult will bring us closer to the final decision. For example, in Soneium there is a mainnet in which we will have to allocate an amount of funds in the use of the various existing protocols to date, generating activity and transactions directly with smart contracts. We may have to provide liquidity through DeFi contracts, which means that we must perform several operations, such as approving the contract, making swaps, adding liquidity, etc. Also fulfilling tasks where we receive badges are a significant expense, but in many cases they are a faster way to qualify, because we make sure we are doing well.
3. A community that supports the project and promotes it
There will be many participants, but what is essential is that there is someone who can promote its presence through social networks. Also externally, through meetings and informative talks, exhibitions; that is to say, to represent a visible face of the project and why it can aspire to have great potential.
It is also helpful to create infographics, videos produced by influencers, who, with their production, impact the perception of hundreds of people. This is something I like to verify; the presence of people who support a project or protocol, to know that it has some support from the community, although I know that not everyone is committed to its development or evolution, some take advantage of the opportunity without "falling in love", so I conclude that it is something of utmost importance that I should take into account when investing time or part of my capital.
- Main image edited with Ideogram (AI) and edited in Canva.
- Complementary images obtained in crypto-fundraising.info and cryptorank.io.
- Translated to English with DeepL.