Establishing a simple framework for rating and classifying the key characteristics of crypto projects is critical.
Although setting out to achieve qualitative information of value may sound a bit intimidating, its meaning is quite intuitive. Qualitative information is subjective, so it is about making decisions based on the qualities that a project may have.
Qualitative factors are more applicable to new projects, because there is no real-world data to measure, while quantitative evaluation is more relevant once the project is underway and provides real data that can be checked against competition and expectations.
Mission and Vision: – What problem are you trying to solve?
Any new project should have a clear sense of mission, as well as a broader vision of the long-term impact it aspires to.
Mission is a core element of a traditional brand architecture but will likely be part of a crypto WhiteList. It should only be a few sentences long and clearly communicate what the project does, why it does it (usually defining a specific problem it solves), and how it works.
If the foundation for value creation is some cool memes and an outlandish APY (Annual Percentage Yield), it’s unlikely a project will sustain through a bear market to achieve that long-term vision.
Team: What is the quality of the people behind the project?
The first major Blockchain project may have lacked a named founder, but in general, the reluctance of founders to put their name to a project can raise a few important flags, most of them bright red: (a) Are worried about legal repercussions; (b) They have bad intentions, for example, performing a rug pull; and/or (c) They do not want to become a weak point for the project, affecting decentralization
Competition: What is the competitive landscape?
Try to get an idea of the competitive landscape of the sector in question. Does the project have the advantage of being the first? If it’s not the first to market, is it faster in terms of innovation? How do they intend to gain market share? Is your product offering differentiated enough to provide a true competitive advantage?
Social and community presence: quality of commitment and acceptance.
It is not often that projects are started solely through organic growth, so care must be taken to distinguish genuine organic growth on social and community channels from acquired, incentivized, or bot-generated growth.
When quantifying the audiences of social networks and communities, you should not confuse the followers and subscribers, who are only paying attention, with the real users, who are risking their money; what is known as leaving or putting the “skin in the game”.
Decentralization and governance – How are supply and network concentrated?
Decentralization is not an absolute, but rather an aspiration impossible to measure objectively. Try to get an idea of how important decentralization is for the success of the project, either in terms of value generation or user adoption. That it is not just an idea of the project.
The same goes for governance, the collective rules by which the project will move forward. Governance can have significant implications, as seen with projects like MakerDAO or Shapeshift becoming entirely community-driven, but think about how governance relates directly to value.
A good criterion for progressive governance is when the motivations of owners and users overlap rather than conflict.
In conclusion, establishing a simple framework to rate and rank the key features of crypto projects on the basis of qualitative information will definitely help your decision making
By Audy Castaneda
