Will the token you choose be the next big hit?
Few things are as sweet as the release of a token or coin but how can you be a part of it? Almost every listing of a token or currency is positive (don’t believe it? Check out the new listings on coinmarketcap). This is because it becomes available to the public and anyone can grab it — usually those that couldn’t get in before the launch.
Smart investors in the crypto space have a recurrent theme when it comes to initial releases. Let’s check it out.
The team
Why is the startup success rate so abysmal? Because people harmonise with people and if you don’t have the people it is not going to translate into the project’s balance sheet. Business is a 3 step process: problem -> solution -> business model. 85% of business’ start developing a solution (web platform) and adopt a business model (‘lets use a subscription model, it is really popular right now!’). These types of projects usually get thrown into the gutter since they deliver no value. They don’t deliver value because there isn’t anybody they could give it to.
The idea
Hypothesis, Concept, Proof
The audience and community
If you are an entrepreneur, the first adopters that come to the project are your gods. You treat them well, listen to them and give them priority over any other task that comes on your schedule. Your first customers will be the GPS upon which you know what direction to go when you come up to a crossroad. If you don’t know the end goal, how could you know where to turn?
Transparency
The level of needed transparency for a project has increased over the last couple of decades. In a crowded market branding is necessary to distinguish your products from the competition and to target a customer segment. However, the crypto space is riddled with failed projects and scams. The wild west of online digital startups requires that a project should provide a lot of updates and it should do it frequently. Names, dates, legal info, company info, regulatory verification etc.
Hidden information
You can imagine information of a company to be the same as the Chinese proverb — the 1st face is the face we show to the world, diplomatic and perfect. The 2nd face is the one we show to our family and friends, semi-real but not the truest. Lastly, the 3rd is the one we hide from everyone, we never show this to anyone and that is the truest reflection of who we actually are. A similar observation can be applied to companies.
Closing word
There may be a disconnect between your perceived value of a token and the initial release price. If it is, you should identify with what purpose a project chooses tokenization. Is it to grant voting rights (DAOs)? Is it a way to attract investors and guarantee returns with staking? Is it to access an alpha or beta? Is it just a road-map plan for the revolutionising idea? All of this should be clear from the communication that the project releases.
