We can’t deny the fact that cryptocurrencies has been dominating the market. From mere hundreds that were out in the public, to now were there virtually a coin for almost everything. This makes it a bit difficult to find a coin that is useful and fits your need. Whether you are just beginning in the industry, or a seasoned trader, searching for valuable token will demand time, and clear understanding of your goal.
Identify the Purpose of the Token
First things first whenever you are evaluating any token is to know its main objective. Try to ask yourself a question like what problem it is trying to solve? There are tokens that are designed for specific platforms or project. For instance in Ethereum’s Ether (ETH), it is used to back decentralized apps. Other stablecoins however are focused on providing stability in crypto’s volatility. Understanding the token’s core functions help you to realize whether it is aligned with your goals or investment.
Whenever a token’s purpose is clear and meaningful, it is likely to be more useful down the road. Tokens that are supporting innovation, or bringing value to its users are the ones that you must give priority to.
Who is the Team?
If there’s something in common about a cryptocurrency, then it’s the fact that each token is backed by a team of experienced developers. It is your responsibility to take the time to perform research of the people in charge of the token that you are eyeing for.
While doing research, check for their experience, transparency, and track record.
Developers who maintain open communication with their community and working consistently to improve their platform is a clear indication that they have excellent potential.
Aside from that, look for collaborations or partnerships they have with known and established organizations or companies. A solid team that is supported by strong partnerships brings an extra layer of credibility to their work.
Identify the Use Case of the Token
You must know that not all crypto tokens are created the same. There are tokens that are designed for trading, some are made for governance, while others are leaning more on niche platforms or industries. Tokens that have practical and specific use cases typically have stronger market position.
To give you an example, Binance Coin (BNB) only started to be as a utility token to provide discounted gas fees on Binance Exchange. Since then, I powered numerous services and tokens that are running under the Binance ecosystem.