How to Analyse a Crypto Project Before You Buy

This should teach someone who already understands wallets, tokens and basic blockchain concepts how to properly investigate a project.

What the guide should cover

1. Start With the Team and Project

• Who created the project?

• Are the founders identifiable?

• What is their previous experience?

• Does the project actually solve a problem?

• Is the documentation credible?

• Are the claims realistic?

2. Analyse the Token

Look beyond the headline market cap.

Examine:

• Total supply

• Circulating supply

• Token allocation

• Insider allocations

• Vesting schedules

• Unlock schedules

• Mint authority

• Freeze authority

• Distribution between wallets

A project can look decentralised while a small number of wallets control a significant percentage of the supply.

3. Examine Liquidity

Ask:

• How much liquidity exists?

• Where is it held?

• Is liquidity locked?

• When does the lock expire?

• Who controls the liquidity?

• Could a small number of transactions dramatically affect the price?

Low liquidity can make a token extremely vulnerable to manipulation.

4. Investigate the Wallets

Don't stop at the largest holder.

Look for relationships between wallets.

For example:

Wallet A receives tokens from the project wallet → Wallet A distributes tokens to several wallets → those wallets sell shortly after launch.

That doesn't automatically prove wrongdoing.

But it is a reason to investigate further.

5. Separate Facts From Claims

Classify information as:

• Fact — supported by evidence.

• Claim — stated by someone but not independently verified.

• Opinion — someone's interpretation.

• Unverified — insufficient evidence.

This distinction is critical.

6. Look for Contradictions

Compare:

• Website claims

• Whitepaper

• Social media statements

• On-chain activity

• Token allocation

• Actual development

• Team behaviour

The biggest warning signs often appear when what a project says and what the blockchain shows don't match.

7. Build a Risk Assessment

Rather than asking:

"Is this project safe?"

Ask:

"What evidence supports the project, what evidence contradicts it, and what remains unknown?"

That is a much better research question.

Rebel Rule

Don't invest because someone tells you a project is good. Investigate until you can explain why you believe it is legitimate.