Early crypto gems: How to discover them first
To identify early crypto gems, focus on five critical checks: builders, usage, liquidity, token design, and security. Builders are evidenced by active teams with consistent updates, recognized through hackathons and grants. Secondly, assess usage by evaluating fees and retained revenue, ensuring that real users are engaging with the product and not just chasing incentives. Liquidity is vital; it’s more important to look at depth and spreads across trading venues rather than raw trading volume, indicating true tradability. Token design requires scrutiny of circulating supply versus total supply. Verify the unlock schedule to avoid supply overhang risks. Lastly, security goes beyond audits; understand who conducted them and the governance around upgrades to ensure the protocol’s integrity. Be cautious about incentivized programs that may create temporary user spikes. A disciplined approach is crucial for discerning genuine opportunities from mirages in the crypto space.
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