What Does a Successful Crypto Project Look Like?
Despite the crypto market cooling down in the last two years, there is still a lot of interest in digital currencies. Individual and institutional investors are still buying cryptocurrencies for different uses, including as a store of value and for speculation.
If you are interested in investing, you must be able to distinguish a good project from a bad one because, unfortunately, there are a lot of bad projects that will lead to you losing money. So, what should you look for to ensure a crypto project is successful before investing?
It Has Real-world Utility
Successful crypto projects have real-world utility. The most common are used as currencies and stores of value. They are also used in other ways, such as facilitating exchanges between currencies or as in-game rewards in web3 games.
Cryptocurrencies with real utility are always in high demand (think of Bitcoin and Ethereum) so they are a good investment since you can use them for speculation or trade them for profit by buying low and selling high.
It Has a Strong Community Behind It
Every successful cryptocurrency project has a large community behind it. These could be the developers interested in its development and using it in their own projects or people who are waiting to see the different ways they can use it once developed.
You can easily find out the size of a project’s community by checking online. Start with X and Reddit to see how many times the projects have been mentioned recently. You might even unearth conversations and threads about it that educate you more about its utility and why it could be a good investment.
It Receives Constant Updates
As the technology behind cryptocurrencies and blockchain evolves and matures, developers tend to update their projects to leverage these new developments. A successful crypto project is one that developers are consistently working on and that receives consistent updates.
One of the best ways to know if this is happening is by searching for a specific project’s press releases. Press releases are used by founders, CEOs, and developers to tell journalists and publications about what is going on with their projects. They typically use crypto PR distribution services for this, so it is easy to find press releases if a project is being updated consistently.
If you find a lot of PR activity from a long time ago and nothing from the past few months, that might indicate the people behind the project have abandoned it and that it would not be a good project. However, you should still use other data points to determine if this is true or whether the developers are still working on the projects but have not sent out an update recently.
Longevity
Scammers and malicious actors have released cryptocurrencies in the past that were terrible investments. Such projects typically lasted a few weeks or months because their founders only used them to make a profit and not to benefit crypto as a whole.
If a project has been around for more than a year, there is a good chance it is a good investment and a successful project. However, do additional research to see if this is true and if it would be right for you.
Successful crypto projects tend to stick around for longer, have large communities backing them, have real-world utility, and are constantly being updated. You can use these and other criteria to decide if you should invest in or follow specific projects.
