#trend
💰 How to evaluate tokens for investments in a bear market?
1️⃣ How does a project generate income?
DeFi protocol is a business. In a falling market, projects that, regardless of the market situation, bring profit due to:
• profitability
• commissions from the bridge
• exchange fees
• commissions from liquidations
• GameFi mechanics.
You can see how much the projects earn on
cryptofees.info .
2️⃣ Does the protocol have money?
Funds are needed for software, salaries, marketing, development, etc. The protocol especially needs funds on the "bear" when revenues are falling. How much money you have here.
It is important that the protocol treasures do not consist entirely of a native token. Otherwise UST 2.0.
3️⃣ Blocked investments will happen
In a falling market, there is pressure on sales. But some projects (CVX, GENE, GMX...) block the "body" or profit for a year or two. Thus, if the project has a large part in the lock, the pressure on the sale will be less.
4️⃣ Token Value
It's easy to invent the value of a token on a bull, everything is growing. But now is the time to ask yourself:
• why does the project need a token (TWT and 90% of tokens?)
• what is the advantage among competitors?
• what problem does it solve?
5️⃣ Roadmap and team
Roadmap — strategic plans for the future. If the project does not follow and does not update the roadmap, it is worth thinking about. Follow the activity of developers in the discord and on Github.
🔹 Market situation
• The macroeconomic situation is against the bull. While the Fed is "squeezing" the economy, the chances are low.
• If you have lost 70% on investment in the project, it may be worth selling the remaining 30% so as not to lose more. It all depends on the project and your goals.
🔹 Strategy
• DCA for Bitcoin and Ether.
• Investments in protocols that generate profit and distribute it among token holders: GMX, PERP, DYDX, SNX. Now these projects are in drawdown and have a good capitalization/revenue ratio.
• ATOM/EVMOS based on airdrops in the future. To buy for a small amount - to get stuck - to forget. Sometimes check for drops.
Not financial
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