The crypto ecosystem and blockchain technology as a whole is, at the moment, something similar to what the internet was back in the late 1900s.
Only a handful of people understand what it is, how it works, and how it can revolutionize the world and there is a lot of speculation in regards to which companies and projects are the most appealing as an investment opportunity.
The burst of the dot-com bubble is a reminder of what happens when excitement gets out of hand and the most fundamental investment and business principles are forgotten.
With so many people nowadays browsing the web to learn what is Cardano (ADA), how many Bitcoin (BTC) will ever be issued, or how does the Ethereum network works, it seems that many are considering jumping on board of the crypto wagon.
In this article, we share a list of some of the characteristics that make some crypto projects stand out from the crowd as potential long-term winners of this up-and-coming industry to help investors in their journey.
#1 – A robust developing team
The inner works of blockchain technology are highly complex and involve a thorough understanding of programming language, consensus protocols, and economics to make a project work as it should from both a practical and financial perspective.
With this in mind, the founding team of a crypto project is a key piece of the puzzle for its success. In this regard, investors should seek teams that are comprised of high-level professionals with a proven track record in the IT and financial industry preferably.
The more qualified the team, the better as that increases the odds that the project will successfully achieve its mission.
#2 – A practical value proposition
Blockchain technology has multiple applications in the real world going from acting as a mechanism through which people can pay for goods and services in the digital world to serve as a decentralized data storage.
The most successful tech projects in the past have been those that have optimized a certain process, reduced costs for businesses, or created a space through which people and businesses can connect with each other.
With this in mind, the most successful web3 jobs will probably be those that offer these kinds of solutions rather than being a sole mean of exchange – i.e. a digital currency.
#3 – A large total addressable market
The larger the total addressable market (TAM) of a business idea, the easier it will be to scale it up to the point that it becomes self-sustainable.
In the case of web3 projects, decentralization brings an extra layer of complexity as costs are decentralized as well as income, meaning that those in charge of validating all transactions made within the blockchain need to be compensated accordingly so they keep playing this important role.
Therefore, a project that solves the needs of millions of users or provides a solution to a major industry will likely attract the most interest from nodes and investors rather than those that cater to a niche and whose survival requires the continuation of some of the extraordinary tailwinds the crypto industry has experienced since the pandemic started.
#4 – Thoroughly-conceived tokenomics
Tokenomics is a term that explains how a blockchain project issues and manages the volume of native tokens that are circulating in the marketplace.
A limited supply is typically positive for crypto assets in the long term as long as demand keeps growing steadily.
Moreover, the blockchain must, to some extent, attract users to adopt, invest, and trade its native token by forcing them to use the asset when using the network for whatever purpose it has been designed for.
#5 – A strong community
In the crypto world, a strong following is a big plus. The more people believe in the project’s vision, the easier it should be to raise capital, and attract nodes and key participants to the endeavor.
Most projects have understood this and have created spaces on which prospective and existing investors can interact while the developing team can also use these channels to remain in close contact with all interested parties to inform them about the most recent developments concerning the project.
A strong community is a powerful marketing tool that could end up unlocking the full potential of the project.
Bottom line
The web3 and crypto industry are up-and-coming corners of the tech industry. The practical applications of this technology are quite promising and may change how the world works in many aspects.
However, as with all young ecosystems, many seemingly promising projects will end up dying in the future and investors need to develop the skills needed to identify those that will survive and thrive once this technology becomes widely adopted.
