Web3 is still young, and all tools that come with it. As it keeps growing, we, as the web3 community, need to make sure the space is safe so that more people will enter. Only if this community grows, will it step out of the shadows and potentially provide a more healthy and equal future to all of us.
Essential in that endeavor is that we provide more information to newcomers and young community members and give them the tools to evaluate projects which approach them through Discord, Twitter, or even email.
If a project reaches out to you in such bold manners as sending you a direct message through Twitter, Instagram, Email, Discord, or really any other platform, please delete or even block them. When I say message I don’t mean a personalized one I do mean the ones you can tell are copy-pasted. Nothing good will come out of it; no matter how many free items they offer to you, it will probably only cost you in the end.
If the project approaching you comes from a friend or acquaintance, still handle it with care and don’t connect your wallet to their site without properly informing yourself beforehand. In web3 counts, trust is good, but control is better. This new world provides you with many great tools but, it also requires you to handle them with care and responsibility. There is no third party you will be able to blame in case things go south.
After you have found a project that piques your interest, the first logical choice will be to go to one of the following websites/ applications for further investigation:
Both of those will show you more details about the coin you have been offered. It is essential to look at the coin distribution, the blockchain that they have been supplied on, and their development over time, as well as their time of existence. All of this data will be openly available to you. There is no perfect equation to see if a coin is good or bad, but it will start to provide you with a feel for the coin itself.
Of course, the higher the coin is listed, the higher its value is. Therefore browsing through the top 500 will also tell you if the coin is somewhat interesting or rather not. But don’t be fooled since some coins live through a hype period then fall and never recover as well.
Another vital part under this paragraph is the token or coin allocation of a project. Web3 is about decentralization; therefore, you would want to make sure to join projects that commit to this value. If the coin or token is only in a hand of a few, the project is somewhat centralized. You can still join, but you should be aware that you only entered a slightly better version of web2.
If the offer made to you is about NFTs (non-fungible tokens often in the form of digital art), the evaluation is much more complex. You can still look at the blockchain the NFT is distributed on, but even that can not tell you how much value increase an NFT will see in the future. Don’t buy art you don’t like as a rule of thumb, and that counts as much for the digital as for the real world. By following this rule, even if your NFT fails as an investment, you will still like to look at it in your collection.
No matter if you are interested in a particular coin, a blockchain project, a DAO, or an NFT collection. It is essential to do your research and check their story. Especially when it comes to projects, it is important to read their whitepaper. Of course, you might not be able to understand everything written in it, but you will gain a better feel for it, and it will give you more specific directions to research on, like keywords and phrases of comparison. Most whitepapers are either being hosted on the project’s medium or gitbook page. Make sure to check those. If you cannot find it even after visiting their website, the project is already defying one of the main pillars that web3 stands for; transparency. The same counts for a dedicated page that shows for example transparency reports and another one that demonstrates audits that have been done. Audits are an essential part especially when it comes to DeFi protocols to make sure the code works and obvious mistakes are avoided, hence security risks are minimized.
A project, coin, or NFT collection, even a blockchain itself, is only as strong as their community since all of web3 is community-driven. Therefore the next step requires you to track down their socials. If they don’t have Twitter, Medium, or Discord and only have a website or Instagram, you might already know that this project doesn’t scream web3 at all. But even if they have a Twitter, Discord, YouTube, Medium, or mirror.xyz, you will still need to dive in and vet their community engagement. Many projects set up a Discord channel but don’t have any community engagement within their server. Be aware of these facts and evaluate on a deeper level.
Another indicator for a project that aligns well with web3 values is an active governance forum (such as discourse or even dedicated discord channels). In there the community of a specific project will discuss a proposal before it goes to a voting platform (e.g. snapshot or even on-chain voting). These forums will show you how many people are engaged in discussions and ultimately how seriously you can take the project itself.
After researching so many things, you should already have a good feeling if this project unlocks your further interest. If it doesn’t, it will be ok. At that point, don’t let FOMO (fear of missing out) get in your way! But if, in fact, the project has survived your stringent vetting process, go back to investigate their tokenomics, the price development of their coin, and anything else connected. This is the time for you to dive deeper into their ecosystem. Also, at this stage, start asking questions in their Discord to get answers to things you might not have understood from their articles, socials, or even whitepaper. Don’t be afraid, and reach out.
Please have a good look at their team and their socials. In web3, it is as crucial to look behind the scenes as in real life. Get to know the people behind the project. Check their personal Twitter, their tweets, and engagement. Do their values align with yours, and the same counts obviously for the community themselves? It will tell you a lot about their capabilities to move forward with the project they are proposing or are involved in. But also keep in mind that web3 is in its early stages and security is only working to a certain level. Hence a lot of individuals working on a project are actually anonymous for good reasons. In that case, vet the project without taking the individuals into account as the project is what you might want to support rather than the individual anyways.
Lastly, a project of substantial value in web3 will most likely make their code publicly available (open source) on a GitHub repository. This step is not necessarily the most important one but it still will show if the people behind the project have truly understood the values of web3.
As you can see, there is no exact solution to finding out who is good and who is bad on the blockchain, but there are, in fact, a lot of little steps you can take to find out if something suits your standards. Web3 is not just about new technologies; it is about how we handle them and change the world for the better. So make sure that you feel better after joining a project as well!
This article is part of Alana’s Gitbook, which contains an ever-evolving section of web3 education. With your constructive criticism and help, we can build it out together! If you are interested please join Alana’s Discord or any of her other channels!
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