When deciding if you should trust/invest in a project, the whitepaper is not as important as you might think it is. Here are a few things important when DYOR, by order or importance:
- Non-anonymous team. If they hide their faces, you better hide your money.
- Company registered in a safe country (not Cayman Islands or some other shady place). This is also important for the team: make sure they are living in a country where they can be prosecuted.
- Is the team answering questions, even hard questions? A good team will have the backbone to talk about things the project might be lacking or simply can’t do. No project is perfect, especially early-on where it will be missing LOTS of code and features they couldn’t finish yet. Ask them what is still missing and what has to be pushed for the future. If they can’t admit anything bad, it means they are not transparent and you can’t trust anything else they say about the project. A good project will talk about errors in a transparent way (not shilling this coin, this is just ONE example of what a good error report can look like. A good project should publish many like these).
- Github: how much code have they written, by how many users? If the company says they have 100 devs but only 1 account contributed code that is not good. How much lines of code are there? Is it updated EVERY DAY? If a team of coders is working on this 8 hours a day, it needs to be updated every day. Get a developer friend to go through the code and check for quality. Or learn to code yourself. Code can be bad or even worse: can contain rugpul mechanics.
- Marketing: bad marketing can be a good sign. If they spend more on marketing than on development you can be sure it is a scam coin. Technical people are often bad at marketing and communication. But don’t use this as an excuse for teams that don’t answer at all. If the dev team has no time+interest to be active on their own Reddit/forum then, not only are they unprofessional, but their own team doesn’t care about the project, so why should you?
- Whitepaper: not really as important as people say on Reddit. The whitepaper is like a promise made by a politician, it is JUST A PROMISE and doesn’t mean shit. They aren’t obligated to fulfill what is in the whitepaper and they can replace it any time with a new/updated one. The only role of the whitepaper is for you to check if they have spent time thinking about the solution, see if they can write coherently and try to gauge if they sound smart enough. But many can write a whitepaper, very few can deliver. Even worse: the whitepaper is just a small fraction of a real business plan, it often doesn’t not contain goals, costs, competitive analysis or anything like that. Even a full business plan shouldn’t be trusted, so don’t believe in fairytales or promises.
- What problem is the project trying to solve and what makes it unique? No one needs a new bitcoin, no one needs a new smart contracts chain that does exactly the same as others. And be careful with things like “they do it cheaper”. Anyone can lower costs over time and/or with code optimization, so “cheaper” is often not enough. Price does make a difference, 30 USD transfer fees are an issue in some chains and it does give the competition an advantage. But the advantage is always better if price alone is not the only advantage they have. This could be higher on the list, but if the other topics aren’t covered, then a good idea isn’t worth much either, which is why I listed this here, at the end.