Listed below are the queries used in our web3 project investigations. While not an exhaustive list of questions, we believe this list to be sufficient to objectively gauge the fundamental qualities of a cryptocurrency or NFT project (research questions are subject to change).
General Web3 Project Questions
- What is the URL of the official cryptocurrency project website? This gives a starting point for the cryptocurrency research investigation
- Are there any obvious errors on the website (broken links, misspelling, grammar, etc.)? Simple errors on the website indicate potential oversight issues.
- Is comprehensive documentation available for the project? This acts as a trusted source of information for the cryptocurrency project.
Project Use-Case and MVP
- What problem is the project trying to solve? Identifies the purpose for developing the project.
- What is the project’s solution to the problem the project aims to solve (aka use-case)? This helps determine if the project is useful.
- Is there a working product (MVP)? This helps determine if enough work has been done to go from idea to implementation.
- Is there a known development team for the project? There is a team dedicated to the development of the project and a potential point-of-contact for answers.
- Who are the project’s leaders? Knowing the leadership gives insight into the team’s credibility and ability to follow through with the project’s completion.
- Have the project’s leaders been involved in any other successful web3 projects? Leaders with a track record of success are more likely to succeed in future projects.
- Where is the development team headquartered? This shows the transparency of the development team and allows for further investigation to be conducted if necessary.
- Are there known sustainable incentives to grow the development team/project ecosystem? This gives an incentive to have developers continue developing the project over time.
Audits and Recent Issues
- Has the codebase undergone a 3rd party audit by a reputable company/extensive public testing? Code audits and public testnets are used to test the security of a codebase.
- Does the project have any known, recent (within the last 6 months) technical issues? This gives insight into potential pitfalls of the underlying technology and how issues could be resolved in the future — if the issues were resolved at all.
- Is there a clear roadmap for future development of the project? This shows that a development team for the project is willing to be held publicly accountable for reaching certain production goals.
- Have any significant milestones within the roadmap been reached? Shows if the team is making meaningful progress on the project.
- Which industry or community does the cryptocurrency project aim to serve? This aids in categorizing the project.
- What is the size of the official project social media pages (Reddit, Telegram, Twitter, YouTube)? Helps in determining if attention (human capital) is being drawn to the project.
- Are the social media posts and reactions related to the project recent and do they appear organic? Helps in determining if the community is active and legitimate (not fake/bot accounts).
- Are community members generating their own independent content to promote the project (YouTube, TikTok, Etc.)? This shows the grassroots involvement of the community in the project’s marketing (word-of-mouth propagation).
Partnerships and Investors
- Does the project have any notable partnerships? High-profile business partnerships can increase the project’s perceived legitimacy and potential community reach.
- Does the project have any notable investors? High-profile investors can increase the project’s perceived legitimacy and potential community reach.
- What is the project’s governance process (if any)? This shows who is responsible for the long-term planning of the project.
- What are the most prominent directly competing projects? Identifies projects with similar use-cases and their industry rank by market capitalization.
Cryptocurrency Specific Questions
- What is/are the intended use(s) of the project coin within the project? This helps determine how useful the coin is to the overall project.
- How is consensus determined? This gives insight into the underlying rules of how transactions are validated.
- When was the project’s coin launched? If the coin has an extensive history, this may indicate that the circulating coin supply is more distributed among holders.
- Was there an Initial Coin Offering (ICO)? ICOs present regulatory risk in the USA. Additionally, this helps determine if a project’s coins were made available organically or sold by the developer(s).
- What was the initial coin distribution? Shows if the majority of the ICO coins were given to a few individuals.
- How do coins come into public circulation? Provides the source of coin supply inflation.
- What is the yearly inflation rate of the coin? Gives the speed at which new coins are added to the total supply.
- Are most of the coins in circulation (>50%)? This helps determine the potential for future coin supply inflation shock.
- Are the coins available on a high volume, regulated exchange? Availability on a large volume exchange helps in ensuring that there is sufficient liquidity to enter and exit the market. If the exchange is regulated (ex. Coinbase, Kraken, etc.), there is less of a chance that the volume on the exchange is inorganic.
NFT Specific Questions
- What is/are the NFT asset(s) available for this project? Gives an overview of all the NFTs related to a single project.
- When was the project’s NFT(s) launched? If the NFT has an extensive history, this may indicate that the circulating NFT supply is more distributed among holders.
- How do NFTs come into public circulation? Provides the source of NFT supply inflation.
- What is/are the intended use(s) of the NFT asset(s) within the project? This helps determine how useful the NFT asset is to the overall project.
- How is the NFT asset’s rarity determined (if applicable)? Helps determine the objective difference between one NFT and another in a single collection.
- Does the NFT’s intellectual property rights allow for users to use their NFTs in commercial endeavors? This lets us know if the NFT can be used to make derivative works or merchandise for profit, without legal repercussion.
NFT Validation and File Storage
- Which blockchain infrastructure does the NFT project utilize? This gives insight into the underlying rules of how NFT transactions are validated.
- How are the NFT files stored? Helps in determining the resiliency of a NFTs referenced files.
- What is the ratio of the outstanding NFT supply to NFT owners? Helps provide insight into the NFT distribution amongst holders.
- On average, what is the daily trading volume of the NFT asset(s) over the previous 90-day period? Trading volume gives indication of the liquidity (how easy it is to buy or sell an asset) of a NFT collection.