How to evaluate the risks and rewards of a WEB3 projects?

There are many different types of KPIs that organizations in the Web3 space may use to measure their performance and track progress towards specific goals. Some examples of common KPIs that may be used by Web3 projects include (but not limited): User adoption, transaction volume, network activity, revenue, user retention, security etc.

It is important to consider the following points when evaluating a Web3 projects:

  • An anonymous (or masked) team is a big no. No transparency don’t invest.
  • A clear roadmap and/or Tokenomics outlining the direction and goals of the project is important to understand the long-term vision and potential for growth.
  • Token usages – if the token is not useful for ruining the the project, it might be useless and with no real value.
  • Where the token is traded and what is the trading volume amount. If the big centralize exchanges listed the token it may be a good sign. However, low trading volume (please check coingecko or coinmarketcap) may be a red flag.
  • Bugs in the source code might signaling future problems. Check Reddit, Quora, Discord and so forth and try to find those types of issues.
  • Unlimited max supply of tokens could potentially devalue the token and you may lose your investment.
  • Be wary of investing in projects that rely heavily on nepotism or friendships rather than solid business ventures.
  • Celebrity endorsements does not mean the project will be as successful like the celebrity.
  • A lack of reserves in case of unforeseen emergencies and everything can be over for the project.
  • A poorly-designed website and lack of social media presence denotes that the project is not properly managed and publicized.
  • A lack of events may indicate a lack of commitment in building a strong community.
  • Legal procedures, whether against or involving the project, and/or the project team leaders, always bring problems. It is important to carefully consider the legal risks associated with any project and its leaders.


  • DeFi
  • WEB3