Some key traits can help you to determine the validity and overall quality of a particular crypto project. The market has seen an influx of new platforms, with each offering unique services. All of these new projects help to expand the market’s overall reach by improving adoption. However, this growth can be seen as a double-edged sword as it can make it more difficult o determine if a project is a good move for your trading strategy or not.
Learning what traits make a project a good idea can be a great way to help remove emotion from the process of determining your next move. Take a measured and systematic approach to avoid FOMO (fear of missing out) another common pitfall traders encounter when they are new to the market. Here are the 10 traits that make a crypto project the right choice for you.
You Understand the Product
You need to understand the products and platforms you trade. This vital step is often overlooked by new traders who sometimes will make movements based on the charts without understanding the product offered by the firm. This style of trading is gambling at best as they are attempting to catch market movements purely off of gut instinct. In most cases, your gut lacks the experience to make the right call. As such, it is wiser to leverage proven methods.
When you understand the product or services offered by companies you trade, you gain the advantage of understanding their true value. You can see exactly the need that the service fills and how it can correlate to profits. The business system shouldn’t be a mystery to you. You need to understand how the technology works if it’s already in use, and what issues could potentially arise.
You also need to understand where the product sits within the greater market. Niche assets often see more usability. It is not smart to make large trades in firms that have not started the technological aspects of their model. Trading companies that are still in the drawing board stages can lead to big promises that never get fulfilled.
You will very easily see if a network offers a service that is in high demand. You should also be able to explain how the product works, how it creates returns, how those profits are used, and what stage of the network’s development it’s in. All of these factors can make it easier to determine the true value of a service.
A Crypto Project is Secure
It doesn’t matter how many returns you are promised when a company fails due to security concerns. Sadly, there are a lot of hackers in the crypto sector. These malicious users seek to separate you from your crypto using a plethora of methods they have developed over the years.
It’s your responsibility to learn to protect your crypto from attacks such as phishing strategies. The same goes for projects you trade. They need to make the effort to ensure your security. One of the best steps they can take to build confidence in the security of the network is via a code audit.
Auditing firms are more popular than ever. These companies will go over the code and test it using ethical hackers t ensure it can withstand any attacks in the real world. The best networks will conduct multiple code audits and make the results public to the community. Adiontally, these networks are usually open source which enables you to review the code or to have their code reviewed by a third party.
It’s recommended that you stick to non-custodial platforms. This designation means that you can trade and participate in the features of the network without uploading your crypto to their wallet. Currently, most people use custodial platforms such s page CEXs (centralized exchanges) like Coinbase and Binance.
These networks require you to upload funds and personal information which can lead to possible identity theft in the future if their systems are breached. A better solution is to leverage a DEX like the META Exchange that doesn’t take your data. Users can trade on DEXs simply by connecting a network wallet. It’s faster and safer.
Another great sign that you are dealing with a noteworthy project is their development team. You want a team that has worked in the sector before. Many of the most popular projects in the market come from developers that worked on other popular projects previously.
It’s not easy creating a good reputation in the market and developers that achieve this status are not going to throw it away over a startup. For example, Polkadot was cofounded by an English computer scientist named Gavin James Wood (born in 1980). The project leverages many of the lessons learned from his experience working with Ethereum.
You should take the time to see what the developers say about their project’s overall goal. Some developments seek to fulfill a technical niche such as improving efficiency and others take a more lofty approach like providing an open economy to the world like Bitcoin.
A good example of how the development and founders of a project focus can steer its features is the META 1 Coin. This next-gen safe haven token was created to provide the world with a more transparent and fair economy. The tokens founder, Robert P Dunlap researched the main reasons why people are unable to achieve financial freedom. His research helped to create a unique approach that combines stability and passive income for users.
The best crypto projects will have long-term potential. These networks provide real service and usability above speculative returns. They often service certain niches like Chainlinks oracle system or STORJ’s decentralized cloud computing services. Everywhere you look there are tokens built to service long-term ailments of industries.
You can see this strategy even when discussing making cryptocurrencies more stable. The meta 1 Coin leverages a basket of gold-related assets to remain decoupled from the network volatility. The developers wanted to use a basket of gold-related assets to diversify their reserves and to provide long-term storage of value characteristics to the token.
Users have a $5M token limit and only humans can trade the token. No corporations, trading firms, or even governments are permitted to trade META 1 Coins. The network also has a special value-locking mechanism that crosses references to all travel against the current asset value. Only trades that meet or exceed this value are complete.
Sustainability also means addressing environmental issues as well. The world’s first cryptocurrency, Bitcoin requires a large amount of electricity to operate. Some reports put its electrical requirements above developed nations. Today’s advanced networks level PoS (Proof-of-Stake consensus mechanisms to reduce the environmental impact of these systems.
Another consideration should be the entry price of the trade. You are looking for a Cost-efficient asset that has long-term potential. You never want to buy high and sell low. As such, you may find it conducive to your strategy to seeking out promotions and other reduced-priced events like token launches and airdrops.
When you find a reasonably priced asset, you can secure returns during your buy. The same goes for many different assets. For example, it’s often said in real estate, you secure your profits when you buy. That simply means that you need to buy as slowly as possible to ensure you have room to gain profits when you sell. The same goes for your crypto trades.
There’s always risk associated when trading crypto projects. The entire blockchain industry is only 14 years old and many of the most popular projects in the market have been around for less than five years. As such, you need to be diligent in your research and understanding of the technology and offerings provided to users today.
The ideal crypto projects to trade will have a variety of protection put in place to help ease your concerns. For example, the asset protection mechanisms in META 1 Coin ensures that no single trader can control the value of the tokens which prevents whale manipulation.
Another way to reduce your risk exposure is to stick with projects that are already in operation. There are so many stories of blockchain firms promising the world and not delivering anything. Be realistic about what project you support and you will get realistic returns. If you go chasing waterfalls and unicorns, you may find that your strategy turns into gambling.
Another good trait for a project to have is liquidity. Liquidity can come in many forms. One form to review is the firm’s TVL (total value locked). This metric is sued to state how much crypto value is locked in a DeFI protocol. These are tokens that people have agreed to lock into staking, farming, lending, and other pools in exchange for LP tokens and rewards.
It’s vital to trade projects that have decent liquidity to ensure that they can keep the lights on. The best projects will have high liquidity between the community and high liquidity in terms of converting their assets in and out. This strategy ensures that you can access your funds in case of another opportunity or emergency.
For example, the Onramper portal enables you to convert +50 fiat currencies into META 1 Coins in a second. Additionally, the META Exchange provides high-performance trading between blockchain assets and a crypto debit card that enables spend anywhere that accepts MasterCard. Together, these features ensure that EMTA 1 Coin holders can get in and out of the blockchain economy with ease.
The best crypto projects are straightforward. If a project is too complicated and you don’t understand how it generates returns, you are likely to get caught up in a Ponzi scheme. A Ponzi Scheme is the term used to describe when a firm takes funding from new users and pays it to old users acting as if its returns are generated from the business system.
Crypto projects should be straight forwards with easy-to-use interfaces. You need to be able to ace the features promised without delay. The best options will offer options for both new and experienced users to leverage. Keeping it simple also reduces attack vectors as the less code and fewer spots to hack.
Easy to manage
The ideal maneuver will be easy to manage. You don’t want to get into a trade that is going to require you to spend 24/7 monitoring the market. A better alternative is to create a strategy that provides you ample time to enjoy your life. This approach is part of the reasons that DEFi is so popular.
DeFi networks Like the METANOMICs ecosystem offer low-risk passive income to users. These features help you to generate wealth without the risk of losing your original asset. Features like staking and farming are popular in the DeFI market for these exact reasons. Additionally, they are easy to use and require no previous experience to integrate into your strategy.
Diversifies your portfolio
Another sign that a firm might be the right addition to your strategy is that it diversifies your holdings. The crypto market provides a lot of options and opportunities across many different sectors. It’s vital to improve the trading approach that you use out of diversified holdings.
The best traders will hold a balance between cryptocurrencies like Bitcoin, programmable blockchain networks like Ethereum, and stable assets such as META 1 Coin. This diversification helps to protect against loss and improves your ROI chances. Additionally, when you integrate safe-haven assets like META 1 Coin, you gain protection against centralization and whale manipulation.
10 Traits that Make a Crypto Project a Good Idea in 2023
Now that you have 10 distinct traits to look for in your next crypto project, you’re sure to see better results. The market may be moving fast but these traits remain solid as a rock. Stick to the tips in this guide and you will see your portfolio grow without adding to your risk.