How to filter out good WEB3 investment projects from the user's perspective?

In recent years, with the increasing maturity of Web3 technology and application scenarios, a variety of Web3 projects have emerged like mushrooms after rain. Traditional fields such as Decentralized Finance, GameFi, and public chains are developing steadily, while new industry players like RWA, DePIN, and DeSci are catching up rapidly. Along with the rapid development of technology and ecology, some negative projects and speculative operators have also appeared, leading users to have mixed feelings about the Web3 field. What kind of Web3 projects are truly worth investing in? This article will analyze in detail multiple dimensions such as whether the project has sustainability, how the idea is implemented, and how to stabilize and generate profits, helping you find that promising project among many.

1. Assessing the sustainability of a project from three key perspectives. Web3 projects worth investing in require both the project party and investors to have long-term operational capabilities. Users determine whether a project is solid based on the insight into whether the project's fundamentals are solid. (1) Does the project's background support users' imagination? Compliance is the bottom line for the survival of Web3 projects. There are significant differences in regulatory policies regarding cryptocurrencies, token issuance, and other areas among different countries. Embracing regulation can mitigate legal risks and enhance user trust. Taking the HKTWeb3 trading platform as an example, the Hong Kong Securities and Futures Commission requires tokenized securities to meet the traditional securities regulatory framework. The HKTWeb3 trading platform achieves asset custody and compliance reporting through a licensed trust structure in Hong Kong, ensuring that user fund flows are transparent and traceable. The project also rapidly establishes a compliant ecosystem by leveraging policy dividends. The diversity and complementarity of the team background determine whether the project can break through core barriers such as technology, operations, and resources. The team must cover key roles such as technical development, product operations, and industry resources, and the members' resumes must have a strong correlation with the project positioning. For example, the founding team of Magic Eden consists of experts from Web2's Google, Uber, and Web3's FTX, Coinbase. CTO Sidney Zhang previously led the algorithm development for Uber's delivery platform, and the project experience was transferred to the NFT field. The team's configuration is complete, the framework is clear, and ultimately drives the platform's daily trading volume peak to surpass OpenSea. At the same time, the key point in the valuation of Web3 projects lies in their ability to address the inefficiencies and trust issues of traditional industries. It is important to focus on whether there is an emphasis on specific scenarios, providing differentiated solutions through technological innovation and changes in market demand. A typical case is AntChain's "Copyright Protection Program," which uses blockchain technology to achieve real-time data on-chain and multi-party verification across various links in the supply chain, dynamically assessing corporate credit, providing digital copyright storage services for small and medium-sized manufacturers, reducing the financing cycle from 30 days to 72 hours, and lowering financing costs by 40%. The solution directly addresses market pain points and has achieved success upon launch. (2) Does the landing process meet user expectations? The completeness of the white paper directly affects the project's credibility and financing capability. It covers core modules such as technical architecture, token model, roadmap, etc., providing users with multi-dimensional judgment basis to help reduce the potential risks brought by information asymmetry. Users can verify the project's technical credibility, token model sustainability, execution reliability, etc., through the white paper, thus avoiding speculative projects and choosing technologies and ecosystems with long-term value to enter. Whether for financing or users, the more complete the white paper is, and the more detailed and publicly disclosed the content is, the more it reflects whether a project is adequately prepared, avoiding vague promises. The project's official website is the first window for external display, aimed at conveying the professionalism and transparency of the team. If information is lacking, it can easily raise doubts; for example, an anonymous team or a vague roadmap may be deemed a scam. The promotion is a bridge for the project to establish trust with users, while the tangible results are the process of fulfilling that trust. The consistency between the two directly affects the project's survival. Timely delivery of promised features will strengthen user confidence and attract more participants to the ecosystem. The implementation of core functionalities determines whether a project can attract more early users and whether it can build a mature Web3 ecosystem, which is an important factor in validating its value. For example, after Uniswap promoted "zero-fee DEX," it immediately launched core features, resulting in a user growth of over 10 times within three months. However, a failure to deliver results may lead to investors withdrawing their investments. For example, Zaros faced delays in product development and technology iteration, resulting in the ZRS token losing its value due to an inability to attract liquidity, which led to the project's funds being exhausted and the termination of operations on May 10. (3) Can the project's strength break through market competition? In the current Web3 field, technological iteration and compliance thresholds determine the space for survival. By 2025, fields such as DeFi and NFTs will enter a deep technological phase, where compliance becomes a "lifeline" for projects, and users' sensitivity to "real demands" increases. For instance, Walmart has achieved food traceability through blockchain + IoT, reducing the loss rate by 18%. At the same time, reports from Layer2 Research Society indicate that the CNN NFT market will close in 2024 due to content homogenization, validating that Web3 projects with "no value anchoring" are difficult to sustain. Differentiated positioning and the ability to break ecological barriers are the core competitiveness of a project. The competition in Web3 has shifted from "single technology level" to "ecological synergy capability". Only projects that meet the requirements of "technological irreplaceability + user necessity" can stand firm in market competition. Otherwise, they will end up like Bananagun (trading robot), with over 80% of users lost due to functional homogeneity and lack of unique advantages. The ability to accurately reach users and build long-term trust with them is the key engine for achieving market breakthroughs. Effective marketing strategies need to balance brand narratives with user co-governance. Design differentiated content for product users and investment users, such as Base attracting developers through hackathons instead of blindly investing in KOLs; the SUI team offering full compensation for hacking incidents, transforming user trust into long-term holding motivation, and so on. While lowering the cost of building user trust, it also avoids the trap of "empty promises". The long-term sustainability of Web3 projects depends on the synergy of the three above factors. A lack of compliance genes can easily lead to policy elimination, neglecting progress transparency will undermine community consensus, and inadequate market strategies will inevitably result in the failure of the landing scenario's reputation. Only through the collaboration of all three can a healthy survival loop be built throughout the project's entire development cycle, resisting the impacts of speculative bubbles and technological iterations, and achieving long-term sustainability.

2. Four major dimensions to assess whether the project idea can be realized. If the project team can allow users to experience the joy of participation or the desire for exploration for a long time, they can often capture profit opportunities more keenly. A complete project ecosystem often needs to take into account the following several parts. (1) Business Model Projects need to clarify the logic of value creation and implement this logic to form a closed-loop profit model, avoiding reliance on short-term speculation for huge profits, which can lead to subsequent weakness. Taking StepN as an example, its "Move-to-Earn" model initially focused on attracting users through sports data on the blockchain, but later collapsed due to an imbalance in the token economic model (GST inflation spiraling out of control). A good business model requires a long-lasting and sustainable value system. In addition, triggering interactive branching experiences in various ways (such as breeding mutations in Axie Infinity), allowing users to generate new experiences with each interaction, is also a significant enhancement to the business model. According to data provided by BeepCrypto, Web3 projects with storyline branches have a user retention rate that is 47% higher than other projects. Good UGC incentives can continuously stimulate users' participation experience. For example, Decentraland allows users to design virtual fashion and trade it. The platform continuously incentivizes creation through a royalty sharing mechanism, with top designers' auction prices for single pieces exceeding $100,000, greatly enhancing users' sense of participation and freshness, thus retaining users with the increasing desire to explore. (2) User Ecosystem Good projects will drive decision-making paths through DAOs, increasing users' voice and implementing the concept of decentralization in practice in users' minds. For example, Yield Guild Games (YGG) injects 10% of guild revenue into the governance pool, motivating community members to become the "active water" of the project. A mature social裂变 gameplay is also an indispensable element. Taking StepN as an example, the initial highlight was the "exercise invitation reward" mechanism, where users could receive double token rewards for every 3 friends they invite to meet the running standards. According to publicly released data from the official sources, the community size grew by 2100% within six months. Users gain a sufficient sense of value recognition in the project, actively expanding the promotional channels for the project, creating a complementary trend of positive ecological development. (3) Economic Model Pay attention to whether the token value anchoring strategy and ecological incentives of the project are balanced to avoid being in a Ponzi scheme. Users need to clarify the specific use cases of the token (such as payment, governance) and try to avoid participating in projects with no actual landing scenarios. For example, WkeyDAO constructed a Ponzi cycle through "hardware sales + token staking," claiming "annual returns of 600 times," and collapsed after just 97 days, leaving 12,000 so-called "blockchain phones" piled up in a bonded warehouse in Zhejiang. (4) Technological Breakthrough The diverse and innovative presentation of technology is a bonus for the project, such as 3D interactive scenes or AI-generated content, which are technical advantages that distinguish it from other projects and are also a significant means of attracting users' attention. According to a research report by AI Zhi Chain Future, Bittensor's AI agent network allows users to train personalized models, and high-quality models can be packaged as NFT transactions, with developers achieving an average return of 23 times their initial investment. Overall, when a project simultaneously possesses a closed-loop ecosystem across these four major dimensions, it can be determined that the project has a positive development potential, thereby allowing for deeper value capture.

3. Two major factors to determine whether a project is a valuable target. According to data from multiple institutions such as the "Hack3D: 2024 Web3 Security Report" and the "Hong Kong Securities and Futures Commission (SFC) 2024 Report", the global Web3 project failure rate is as high as 63% in 2024, with 82% of failure cases occurring in projects that have been operational for less than 18 months. The risk of Web3 project teams absconding or exploiting users always exists. First, users need to understand what the key indicators are for determining whether a Web3 project is a valuable asset. For example, DeFi projects need to assess key data such as staking, locking, and active wallets, while the key data in other areas may differ. How to find these key data and what to do after finding them are all important aspects that need to be explored. (1) Find key data from multiple dimensions Users can leverage the on-chain transparency of Web3 data for targeted filtering. Various on-chain analysis tools can be used to query dynamic data of projects. For example, Dune Analytics can be used to query protocol trading volume and user behavior, such as Uniswap fee distribution contracts and other data. DeFiLlama can query real-time TVL rankings and protocol income comparisons, while Nansen can analyze the holdings and trading patterns of NFT whale projects, including the behavior of Bored Ape holders, and so on. The information disclosed by the project team is also particularly important. The white paper and financial reports can verify whether the token distribution model is reasonable, such as MakerDAO's stable fee income structure publicly reported. Through the implementation progress of governance proposals, users can also observe the transparency of community decision-making, such as the voting records on Aave's liquidity mining adjustments, etc. In addition, paying attention to the project analysis reports published by third-party data platforms can also yield unexpected surprises. For example, DappRadar issued a user loss warning before the collapse of StepN by tracking daily active users and transaction volumes of blockchain games. Footprint Analytics predicted that the project was about to collapse by analyzing user retention rates and income models across chains. (2) Forming a closed-loop thinking from data to decision-making Data is merely a tool to assist users in making judgments; the key lies in the strategy for subsequent actions. Observing the trends in key data changes can help users determine whether the development of the project is healthy. For example, if the TVL of a DeFi project has dropped by 20% for three consecutive months, it indicates that users may be withdrawing, and one should be wary of the risk of a collapse. If the floor price of an NFT project plummets by 50% within a week, it may mean that there is a market sell-off, and timely withdrawal to cut losses is necessary, among other considerations. Finding similar projects for comparison can also reveal clues. For projects in the same track, those with data that is significantly lagging or abnormal, or those with historical data that has shown abnormal fluctuations, should be noted. For example, in the Layer 2 field, if a project's TVL growth rate is far below that of leading industry projects, it may indicate a lack of competitiveness, and users need to be vigilant. In addition, by observing the community atmosphere and team dynamics, one can also determine the development trend of a project through common sense. For example, if a project has a Discord or Telegram group and the message volume suddenly decreases or arguments increase over a period of time, along with a data crash, community panic, and lack of response from the team, it may be a sign that the project is facing issues. Frequent changes of CTOs in projects and sudden token issuance increases should also be approached with caution. For example, a certain project's white paper promised "no additional issuance ever," yet six months later, it secretly increased the token supply by over 300%, which was discovered by users, leading to a crisis of trust. The token's value plummeted to zero in a short time. There are many such abandoned projects. A project that can truly enable users to profit in the long term must form a positive cycle across three dimensions: technology, economy, and community. When the project team starts to paint a picture with PPT instead of proving it with code, it is often a signal for users to withdraw. Maintaining rationality, focusing on data, utilizing tools, and combating information asymmetry are essential to progress steadily in the wave of Web3. #Web3投资 ##risk assessment