Hello everyone! I am defigen#4296 and I am DeFi OG. My alias is a combination of words Decentralized Finance, Degen, and Generation. I have participated in hundreds of DeFi protocols, forks, scams over the course of past 2 years, since 2020. And yes, I have made it from 2k$ from UNI drop to 4m$ ath (now worth about ~1m)

Here I want to share my routine for analyzing DeFi projects, overall, and on StarkNet specifically.

Let’s go by steps.

1. The network. Young networks, like StarkNet, with the serious building specifics (like Cairo programming language) usually get filled up with genuine teams building genuine 1st level DeFi protocols (Dex, Lending). Smart contracts templates are not yet polished to get forked so we hardly can see rug pulls at the early stages here.

2. The team. Being anon is not a red flag standalone, however doxxed teams have huge advantage in terms of trust. Best combo is well-known doxxed team with building succesful products background.

3. Social media. Keeping up the community happy/entertained is the key to a success of any retail-oriented product. You go to twitter and check if followers are genuine and how often tweets are posted. Once a week is normal for ongoing protocol, daily is normal in pre-mainnet phase for keeping the hype. Indeed, don’t forget about checking the people following the project on Twitter.

   Then go to a project’s discord, go through the main channels, usually #announcements and #general. Announcements should be regular and emoji reactions show an approximate amount of real citizens of a given discord server.

4. Interfaces. This is one of the most important criterion for me. If there is an opportunity to try/test the UI/UX you can evaluate the joy/slickness/quickness of the dApp. Good UX is usuially taken for granted, however bad UX makes customers to go to a competitor.

5. Tokenomics\money flow. Current state of things shows that protocol governance tokens are used to be farmed and dumped. So, it is important for the protocol revenue model to be sustainable and have a balance between fees and interest rates. Good revenue model + token incentives will creative positive feedback loop and price will go up. In case you are going to buy a token - token utility (except of governance) is a must. Revenue sharing - good. Just LP incentives - bad.

6. Is it a fork? After the influx of new teams building in the network there will appear many forks of succesful projects. Usually, they fail unless they are going to offer something intrinsically new. Hovewer, fresh ideas/designs are welcomed.

7. Security. Are smart contacts owned by a multisig or a simple wallet (EOA)? Are contracts upgradeable? Did the contracts (especially newly designed, not forked) pass any security audit?

8. APR/APY. On the early stage high APR is normal. Just remember, higher the APR - higher the risks of funds loss. >100% APR on stablecoins? Ask yourself why and where the money come from.

Okay, that’s all for now! If I recall anything else I will update the blogpost.

Hope this article will help you in your researches.

Sincerely yours,

defigen#4296

Hello everyone! I am defigen#4296 and I am DeFi OG. My alias is a combination of words Decentralized Finance, Degen, and Generation. I have participated in hundreds of DeFi protocols, forks, scams over the course of past 2 years, since 2020. And yes, I have made it from 2k$ from UNI drop to 4m$ ath (now worth about ~1m)

Here I want to share my routine for analyzing DeFi projects, overall, and on StarkNet specifically.

Let’s go by steps.

1. The network. Young networks, like StarkNet, with the serious building specifics (like Cairo programming language) usually get filled up with genuine teams building genuine 1st level DeFi protocols (Dex, Lending). Smart contracts templates are not yet polished to get forked so we hardly can see rug pulls at the early stages here.

2. The team. Being anon is not a red flag standalone, however doxxed teams have huge advantage in terms of trust. Best combo is well-known doxxed team with building succesful products background.

3. Social media. Keeping up the community happy/entertained is the key to a success of any retail-oriented product. You go to twitter and check if followers are genuine and how often tweets are posted. Once a week is normal for ongoing protocol, daily is normal in pre-mainnet phase for keeping the hype. Indeed, don’t forget about checking the people following the project on Twitter.

   Then go to a project’s discord, go through the main channels, usually #announcements and #general. Announcements should be regular and emoji reactions show an approximate amount of real citizens of a given discord server.

4. Interfaces. This is one of the most important criterion for me. If there is an opportunity to try/test the UI/UX you can evaluate the joy/slickness/quickness of the dApp. Good UX is usuially taken for granted, however bad UX makes customers to go to a competitor.

5. Tokenomics\money flow. Current state of things shows that protocol governance tokens are used to be farmed and dumped. So, it is important for the protocol revenue model to be sustainable and have a balance between fees and interest rates. Good revenue model + token incentives will creative positive feedback loop and price will go up. In case you are going to buy a token - token utility (except of governance) is a must. Revenue sharing - good. Just LP incentives - bad.

6. Is it a fork? After the influx of new teams building in the network there will appear many forks of succesful projects. Usually, they fail unless they are going to offer something intrinsically new. Hovewer, fresh ideas/designs are welcomed.

7. Security. Are smart contacts owned by a multisig or a simple wallet (EOA)? Are contracts upgradeable? Did the contracts (especially newly designed, not forked) pass any security audit?

8. APR/APY. On the early stage high APR is normal. Just remember, higher the APR - higher the risks of funds loss. >100% APR on stablecoins? Ask yourself why and where the money come from.

Okay, that’s all for now! If I recall anything else I will update the blogpost.

Hope this article will help you in your researches.

Sincerely yours,

defigen#4296