This word is one of the most used words in crypto, most times we say this to avoid giving financial advises that might come back and bite us. Crypto investment obviously involves investing your money which is capital, and we all know that money doesn’t come cheap, so in order to invest wisely you need to know where you are putting your money in. If you put your money into anything without knowing where the yield comes from, then you are risking and you will end up becoming the yield. So to avoid that, it’s best you do your research.

Doing your research is not an easy task, it takes time and patience. You need to be willing to put in the work, don’t just fall for the random publicity presented by the project to attract investors, take your time to research. Although doing your research doesn’t guarantee 100% that you are making the right decision, but at least it differentiates you from risking blindly.

There are certains steps you need to take, some of them are pretty easy and some of them are quite technical. The most general step is the general search. This involves doing a general Google search, to see if you can find a blog post or any article that explains the project you want to invest in. It could be an explanation or medium blog, any at all.

Then go to CoinMarketCap, this is a like a crypto encyclopedia, it gives you vital information about a crypto project. Information like the market cap, the Max and circulating supply, the contract address, the social media platforms and the website. With the contract address, you can check lots of things on the token or coin. You can check the transaction count which is the number of activities on the projects, you can check the Tega action value and also the active addresses in the project. So you don’t go investing on something dormant.

Wallet Holders Are Important To Know

It’s good to track the wallet holders to know if a specific group of people hold a large chunk of the project. If so, that project is in potential risk, this means that they can dump the token and leave other holders with worthless tokens or tokens with lesser value. They can also have higher power in governance and only choose what they want, thereby not creating true decentralized governance. We can see what happened with Luna Classic, where rumor had it that Do Kwon held a big number of Luna Classic which was used during the vote for a new blockchain fork.

Whitepaper & The Team

Reading through the white paper helps you have a clear picture of the teams plan towards the project. Take note of all the promises and be sure to scrutinize them, don’t fall for them because they are too good. It could be too good and mouth watery you forget to do the necessary things to be careful.

While you are doing this, try to know the team behind the project and find their social media. While some might use security to be the reason to be anonymous, it’s still not good enough. We need a team that can be held accountable for their actions, not faceless teams that can easily run off after rug pulling the project.

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