# How to evaluate fundamentals of a project？ By [cryptoxx](https://paragraph.com/@cryptoxx) · 2022-03-13 --- ### Purpose: Objectively evaluate the intrinsic value of assets, outperform the market on long time scales, and build long-term confidence (against short-term volatility) ### Classification of Fundamental Analysis: * Project Analysis * Economic Analysis * On-chain Analysis ### 1\. Project Analysis * Generally start with a project analysis * Read the white paper over and over again, a good white paper will make you want to go deeper into the project: * The problem to be solved * The technical solution * Scenarios for token use * Tokenomics * Team background: * Dig into academic citations & LinkedIn work experience * You can see if the team is in it for a long-term vision or to make a quick buck * If it's an anonymous team: * Online presence * dev's github activity * Willingness to answer DMs * Look closely at the roadmap: * Is it the right time to invest? * If it's not a product that's coming out in two years, don't rush into it yet * Keep up with it as an assessment of ability to deliver * Then how well the project progress is disclosed is important * Competitor Analysis: * Who was the first to do this? How much MC? * What are the advantages of this project over competing products? * Has this product been successful in engaging users? * Why would a user choose this product over his competitor? * Social Media Analysis: * Do they have a media operation? Are there events being held? Is the strategy & content on point? * Do they have a strong community? Are they happy to help with marketing? * Is there a lot of online buzz (other than bots)? * What is the quality of other people in the project's discord and telegram? * Is there a deep discussion or are they just asking "wen WL"? * Is there a good community meme? * Memes show that the project's community is passionate and committed, and help it go viral * Has a good tweeter written a project analysis of the project? Your own analysis may be lacking, so it helps to read others'. * UI/UX: * If you need to google "how to use XXX" it means the product interface is not intuitive ### 2\. Economic Analysis * MC and FDV * FDV * FDV is often not a meme * Especially if there is no product, no users * The shib & solana ecology is a lesson * MC * MC also depends on liquidity, otherwise it is misleading * Poorly liquid assets can easily be crushed by large investors when they cash out * On DEX you can try entering large amounts and look at the slippage to get a feel for liquidity * Tokenomics * Prices are influenced by supply and demand. * Is token really necessary? What is its use in this? * Token distribution, unlocking events, release speed * May be different from the original white paper * If you can't find it, it's probably not a good project * New tokens entering circulation need to be able to be absorbed by the market, otherwise they will cause heavy selling pressure * For live products, use [@tokenterminal](https://twitter.com/tokenterminal) to look at 1) protocol revenue 2) P/E and P/S of protocols and dApps * If the revenue is promising, the protocol is growing well and the P/S is low, it is a good long-term value investment ### 3\. On-chain Analysis * Using [@glassnode](https://twitter.com/glassnode), [@nansen\_ai](https://twitter.com/nansen_ai) and [@DuneAnalytics](https://twitter.com/) DuneAnalytics) * Some metrics * Number of addresses & active addresses * Number of large addresses * Number of long-term holders vs. number of short-term holders * Exchange balances * For example, if a large percentage is transferred to an exchange, it is likely to indicate that someone is trying to sell * Wallet addresses worth watching * ... --- *Originally published on [cryptoxx](https://paragraph.com/@cryptoxx/how-to-evaluate-fundamentals-of-a-project-2)*