Last week we released the first part of the crypto fundamental analysis trilogy, which focused on which financial metrics you should pay attention to when evaluating fundamentals of a crypto project. In case you haven’t yet read it, we recommend you to check it out first and then come back to go over the second part.

The second part will focus on project metrics, which can be found in the whitepaper and the upcoming roadmap. In contrast to financial metrics, which resemble traditional stock market indicators, project metrics are a little different. These metrics deal with the development side of crypto, looking at how it works, what problem it promises to solve and how it solves it. Unlike financial factors, project factors are qualitative rather than quantitative, but not all are difficult to find or measure. Let’s take a look at these factors and how to evaluate them!

What is the background of the team working on a project?

It all starts with opening the project's website and finding a list of team members. You should pay close attention to who these people are. In case the project doesn’t have either full names or pictures of people working on the project, it should put your guard up. Why would the project refuse to share their identities? What are they up to? It doesn’t mean that the project is necessarily a scam, but it does signal that you’re dealing with a more risky potential investment. Sometimes team members are public, you just can’t find them on a website, but rather on Twitter or Telegram, so make sure you check out these two social media platforms in case a list isn’t present on a website.

Once you’ve got their names and surnames you should do some background analysis on them. Who are they? What’s their history? What is their expertise and experience? Does it seem sufficient to reach their projected milestones? If there is a skilled team with a wealth of experience, that’s definitely a sign that the team is capable of bringing the project to fruition. Past experience and accomplishments should be well documented. If the list is short (or even worse, non-existent), it is probably because team members lack them. Who wouldn’t like to pride himself with past achievements?

Another bad sign is if any team members (or more) have a shady past. Unfortunately, the shady past is usually well-hidden and difficult to uncover. Consequently, you’ll have to put in some work to be really sure you’re looking at a trustworthy team. You can also consider validating any early backers or advisors to the project in order to assess credibility, as well as people singing praises about the project. You wouldn’t believe how often so-called influencers telling you to buy a certain cryptocurrency are doing so only because they got paid for it, just like people commenting that it is ‘going to the moon’.

What is the purpose of the cryptocurrency?

The most critical project metric to consider is a crypto’s whitepaper. A whitepaper is a document released by developers that explains the technology and purpose of the project. It tells you how the cryptocurrency was conceived and highlights its purpose. First thing you need to look for is motivation behind the creation of a project, which will help you understand the problem it is trying to solve. The solution comes through the so-called utility (or utilities) of a coin - a real world use case(s). Your job is to determine how ‘real’ and ‘revolutionary’ it is, as well as whether that utility is something that the wider market will recognize, and how much it would likely value the utility at.

Another key thing to look at is the initial distribution of coins. In case founders and the team kept a significant portion of the initial coins, it means that they have the ability to significantly affect the price. This could be a sign of a pump and dump or at least a very risky investment. Anyways, keep an eye on proportions of initial coins that went towards development of the project and try to judge whether it seems appropriate when taking into account project’s goals. 

A crypto project should also have a roadmap that shows the timeline for the upcoming releases, tests and other developments. It can prove very useful for two reasons. On the one hand it reveals how successfully and rapidly the team has been moving until now, while on the other hand it shows how ambitious the team is with their future plans. Keep in mind that ambition is a virtue, but there can be too much of it, signaling that the team might be trying to over-hype their project.

Who are the competitors?

It is beneficial to also look at competition. In the long run, the end result of direct competition among projects is going to be winners and losers. Losers will fail, while winners will prevail. As the saying ‘Where there's smoke, there's fire’ suggests, lots of competition indicates that there is a real problem (some projects create tokens as a solution looking for a problem) to be solved. Nevertheless, it also makes it more difficult for any of the competing projects to gain adoption. 

Your job is to pick a winner, therefore it is of utmost importance to identify the landscape in which a project must compete. If possible, fundamental analysis of competing projects should be just as rigorous in order to really get a grasp on any competitive advantages (by whatever project). Make sure you compare the projects with one another looking at the same variables and by applying the same indicators, to get a feel of areas where one project could be weaker or stronger in comparison to the other. Conclude which of the competing projects is fundamentally weaker or stronger to maximise your chances of picking up a winner.


While it is true that project factors are to some degree subjective because metrics are qualitative rather than quantitative, they still give you confidence in your investing decision to a certain extent. We agree that these evaluations can be a little intimidating if you’re new to the game, but over time (with experience), once you get more confident in your judgement and conquer the outlined techniques, they will prove immensely valuable.