Fundamental Analysis – Part One

A post-mortem of a cryptocurrency, and dissection of red flags – Keeping an eye on your fundamental health – Part One

DYOR Crypto Fundamental Analysis Series 

Part One – A Post-Mortem of a Cryptocurrency, and Dissection of Red Flags

Part Two – “How Sherpa Got His Groove Back”

Part Three – The NFT One

Part Four – Scams, Hacks, and Hoodwinks!

Hi, folks! Sherpa here.

In light of the recent “exploit” or “rugpull” on PAID Network (still unknown at this time) I wanted to share some basic tips regarding how to analyze projects for fundamental risks & red flags.

Crypto is a huge, exciting space, and we often compare it to the “Wild West”, because opportunities abound, there’s no real “sheriff” in sight, and sometimes it feels like the outlaws are more plentiful than the shitcoins.

For this reason, among others, it is imperative that you gauge risks & rewards before entering ANY project or position.

Here are some quick tips that have helped me along the way, and can prove to be ‘cheat codes’ for finding the rug-pulls before they find you.

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STALK THE TEAM

I don’t mean that you should be climbing a tree outside of their house, but find out who they are before you get scammed & join the pitchfork mafia. If they have doxxed, then they likely have pages on Facebook, LinkedIn, Reddit, and elsewhere. Put their name in quotes & Google search it!

This may seem extreme, but one of my earliest & biggest failures in crypto fundamentals wouldn’t have happened if I had done this before investing the first satoshi. Without revealing any names, the founder of a project I was interested in had experienced legal trouble in traditional markets.

In addition, he was the founder behind several other crypto projects that would go on to fizzle out, exit scam, or just flop. If the developers have Github accounts, see if they’re active on any other repositories. If they are dividing their attention, that can be a huge red flag. Not for everyone, but believe me – one crypto project is enough for most team leads. They won’t be juggling six or seven successfully, in all likelihood.

It can also be a sign that the team is using a “hired gun” for their development. This isn’t always bad! But sometimes it means there are vulnerabilities left in, and sometimes it means a sub-par developer with no real stake in the project’s success. A quick glance at Paid Network’s Github shows that this was, indeed, likely the case – as a dev pushing & pulling most of the code was active in more than 70 other projects.

Sometimes it really is that simple.

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FUD is your friend! 

I know that this seems counter-intuitive, and a LOT of people in crypto will “marry” a coin & defend it to the death. This actually hurts you more than you might realize.

Before you get into a project, do yourself a favor and check out all of their channels. Twitter, Telegram, Discord, Reddit, Youtube – whatever! You will almost always find people asking questions. People with complaints. Sometimes, even good complaints.

Are they talking about a bug in the code? Are they talking about a mysterious wallet that received tokens, but didn’t invest? Whatever it is, you need to research that issue as if you’re trying to prove it right. Because if it is right, you know better than to invest.

These are just two of many examples of things that you can do in order to better protect yourself, and DYOR – DO YOUR OWN RESEARCH before going all-in on a token or coin. I’d like to make this a series, so if people express enough interest in it – I will be back next week with even more ways to cover your butt in crypto.

Read: What is DeFi and why is it the hottest ticket in Crypto?