What are the characteristics of value investment targets in the cryptocurrency space?
When engaging in value investment in the cryptocurrency field, it is essential to look beyond short-term price fluctuations and focus on the long-term fundamentals of the projects. Here are several core characteristics that value investment targets in the cryptocurrency space typically possess:
1. Solving real needs
- The project aims to address a clear, existing, and unmet market demand, rather than creating a false demand.
- There are clear use cases in specific areas such as decentralized finance (DeFi), infrastructure, data storage, gaming, and social networking.
2. Strong fundamentals
- Technological innovation: Possesses core technological advantages or innovations, such as unique consensus mechanisms, scalability solutions, privacy protection technologies, etc.
- Reasonable token economics: Tokens have clear utility value (such as governance, transaction fee payments, staking rewards), with a well-designed inflation/deflation model, fair distribution, and no excessive concentration or large unlocks reserved for teams/investors.
- Reliable team background: Core team members have relevant technical, cryptographic, economic, or business backgrounds, with good reputations and track records.
3. Healthy ecosystem
- Developer activity: Frequent submissions to code repositories such as GitHub, with ongoing development and updates.
- User and network growth: Key metrics such as active address counts, transaction volumes, and TVL (Total Value Locked) show steady growth.
- Community and culture: A strong, active, and healthy community exists, rather than a purely speculative group.
4. Sustainable competitive advantage
- Possesses a moat formed by technology, network effects, branding, or partnerships that is difficult to replicate or replace.
