An Overview of its Origins and Methodology
What is Project Metrics:
Project Metrics is an analytical framework designed to evaluate the potential of cryptocurrency projects. The framework employs a data-driven, algorithmic approach to analyze various key attributes of a project's tokenomics and fundamentals. By inputting relevant information and data, the framework generates a base score that reflects the overall potential of the project across these key specifications.
How Project Metrics works:
Principle-based investing" is a professional investment approach that involves using a set of guiding principles or values to make investment decisions rather than relying solely on technical analysis or adhering to a specific investment strategy. This approach emphasizes the importance of evaluating the underlying fundamentals of a company or asset, as well as additional on-chain and social engagement factors. It also allows for greater flexibility and adaptability in decision-making. This approach employed is in conjunction with the financial analysis of the project.
Value and Scoring Methodology:
The Project Metrics Valuation Score is a proprietary rating algorithm that assesses the potential value of a project. This score is based on a variety of factors, including the project's market capitalization, its potential value compared to other projects in the same category against a respective period of the market, i.e. All Time Highs or Current. Other optional market valuations may be applied. An additional metrics may be applied for a more in-depth analysis which may improved the overall rating of a project. This is base on social media engagement, user incentives and exchange listings.
The Project Metrics Fundamental Score is a proprietary rating algorithm that evaluates the fundamental strength of a project. This score is based on factors such as the qualifications and experience of the project's founders and team members, the presence of venture capital backing and partnerships. An additional metrics may be applied for a more in-depth analysis which may improved the overall rating of a project. This is base on on-chain data, social media engagement, user incentives and specific features of the project.
The scores, ratings, and information provided by Project Metrics is always evolving and are consistently undergoing data analysis. This may affect projects that have been previously assessed and future results, as the algorithm may be updated to reflect market conditions or improve the scoring mechanism. This is subject to change without notice.
A Look into its Development and Purpose:
Project Metrics was developed on the framework thesis of ‘Process of decision making’ by Ray Dalio whilst utilizing a data-driven approach. It involved rigorous research and analysis of over 1,000 cryptocurrency projects that outperformed and underperformed the market. The research process collected a variety of data points and analysed them to understand which factors contributed to a project's success or failure. In addition to the data-driven approach, the framework also incorporated the principles and decision-making processes of leading venture capitalists and investors, which they utilize to invest in start-up and growth cycle projects.
It was evident that a project cannot be scored solely on one metric. As a result, Project Metrics designed its valuation system on two factors being, the "Base Value Proposition" and "Project Base Fundamentals". This separated that valuation and the fundamentals of the project. This allowed identifying the projects value proportion within the market and fundamental attributes. The data collected from Project Metrics is consistently used to stress test the algorithm to identify the strongest value system for each criteria.
Community Page:
If you would like to know anything further, send us an email. Details can be located on the Community Page.
Research Thesis: 5 Step Guide
1
Project Identification:
Our primary focus is on projects that demonstrate significant growth in key metrics, such as Total Value Locked, revenue (real-yield), active wallet addresses, and/or a large user base. To assist we utilize analytic research platforms that provide On-chain data, crypto news platforms, or existing founders in the cryptocurrency industry. We also look for projects that have repeat successful founders, world-class teams, attracted funding from leading venture capitalists in the world, such as A16z, etc., and/or provide a product-market fit solution.
2
Valuation Analysis:
Once a project has been identified, we utilize data resources such as CoinGecko or CoinMarketcap to gather information on the project's valuation proposition which includes, its tokenomics, current market capitalization, listings, and trading activity. This enables us to gain a comprehensive understanding of the project, valuation proposition and its potential performance within the industry. There are also certain attributes which assist with providing value to the project, such as 'user incentivized' features.
3
Fundamental Analysis:
To assess the projects fundamentals, we utilize Google to gather additional information on the project's, founders and team, any notable venture capitalists or investors associated with the project, and the project's partnerships. We also look at On-Chain data to assess user adoption and growth of the project. Further, the token metrics if they are not available on platforms such as CoinGecko and CoinMarketcap. This enables us to gain a more complete understanding of the project and its potential for success within the industry.
4
Social Engagament Analysis:
We analyse social media engagement from the project and community support on platforms such as Twitter and Discord. We evaluate the volume of engagement on these platforms, including any announcements and general communication made by the founder or team, as well as any concerns or feedback expressed by the community. This allows us to gauge the level of community interest and support for the project, which can provide insight into its potential for success.
5
In-depth / On-Chain Analysis:
Finally, if further research is deemed necessary, the analysis will be tailored to the specific project being evaluated. For example, if the project has poor token metrics, a more in-depth analysis of those metrics and release schedules will be conducted. Additional areas of focus, but not limited to, may include On-chain activity, development activity, specific features of the platform, development funds, treasury reserves, and potential competitors. This comprehensive approach allows us to thoroughly evaluate the project and its potential for success within the industry.
Warning Signs:
The attributes that pose the most risk from the research Projects Metrics has undertaken are: no website, anonymous founders/teams, overvalued fully diluted market cap, meme tokens, projects releasing products in a saturated category, and lack of recent social media engagement from the team or founder.
Platforms that assist with the analysis, not mentioned above, but not limited too:
Access a comprehensive list of tools and resources for conducting high-quality research and obtaining information, both on-chain and from open sources, by visiting the Crypto Resources or NFT Resources page on this website.
Data Tracking
Project Metrics assessments are tracked and recorded in a centralized location for easy access to monitor the data and project performance. The uploaded information is for informational purposes only and should not be considered investment advice. The Project Metrics disclaimer can be found in the footer of this page.
Project Metrics Disclaimer: The information provided by Project Metrics, including the Valuation Score and Fundamental Score, is based on past performance data and should not be considered as a guarantee of future performance. The ratings and value scores are intended for informational and illustrative purposes only and may not accurately reflect future results. They should not be considered as financial advice. Investing in any market carries inherent risks, including the potential loss of funds. It should be noted that the data used to calculate the scores and ratings is obtained from various third-party sources. The accuracy and completeness of the data is considered reliable but may not be accurate. Inaccurate data will lead to inaccurate scores. The scores, ratings, and information provided by Project Metrics are based on subjective analysis and may not be suitable for all investors. Any decisions made based on the resulting scores and ratings is your responsibility.
Project Metrics will not be liable or responsible for any losses or damages resulting from the use of the scores, ratings, and information provided. It is strongly advised to consult with a financial advisor or professional before making any investment decisions based on the scores, ratings, and information provided by Project Metrics. The scores, ratings, and information provided by Project Metrics are not affiliated or endorsed by any projects or companies that may be rated or scored by Project Metrics and are subject to change without notice.