My ultimate due diligence checklist I complete BEFORE BUYING any coin.
If you can answer each question, you'll already be ahead of 99% of crypto investors in terms of DD - and you'll significantly increase your strike rate.
(bookmark this post, and answer each question before buying any coin).
General:
• What's their USP?
• Is there product market fit?
• Does it have a strong community?
• Is the narrative compelling and in line with the market?
• Do they have a strong moat/competitive advantage?
• Are there other comparable projects "anchoring" the price? (upside gauge)
• Are there trusted influencers or thought leaders backing the project? (not just paid shills)?
• What's their roadmap/end goal?
• How far away are they from their end goal?
• Are there any obvious red flags? (bundled supply, rug risk, honeypot etc.)
• Have their smart contracts been audited? Are the audits publicly available?
• Are they on CEXs?
• Do they fulfill enough criteria to get on CEXs? (volume, market cap, community)
Tokenomics:
• What is the token's primary utility in the ecosystem? Is it essential for the protocol's function?
• What's the market cap to FDV ratio?
• Are the tokenomics conducive to value accrual?
• Are they generating fees/real revenue?
• Is it inflationary or deflationary?
• What's the vesting schedule?
• Where are the unlocks going?
• Is there a long term plan to alter the tokenomics?
Team:
• Is the team doxxed?
• Do they have a solid track record?
• Does the project have reputable advisors with relevant expertise?
• Are there any AMAs or interviews you can listen to, to get a better gauge?
• Have they historically hit their roadmap checkpoints/goals?
• Do they have any reputable partnerships or collaborations with established players in the space?
Technical:
• Is price action exhibiting relative strength to the rest of the market?
• Is price at or above a key support level?
• Is it in an uptrend (higher lows and higher highs)?
• Is there a clear HTF indicator/level that could serve as an invalidation point?
On-chain:
• Are there significant whale wallets? What’s their behavior (accumulation or distribution)?
• What’s the ratio of whale wallets to retail wallets?
• How liquid is the token?
• How many unique wallets interact with the token daily?
• Has the holder base been sustainably growing over time?
It might take more time, but if you can answer each one of these questions, you're going to be MUCH better positioned to make a decision regarding investing in a project.
99% of people don't do this, so it will put you in the minority and you'll have a huge information advantage.
Once again, bookmark this post for later use. 💙
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