For the past several years, I have been working at an Asia-based blockchain venture capital firm. While everyone has his or her own investment logic, these are my personal thoughts on how to evaluate blockchain projects. Generally speaking, investment in the blockchain industry targets projects in three categories:
Ecosystem services — This includes media, centralized exchanges (including derivatives), wallets, brokers, mining pools and asset-management services.
Services for companies — This includes blockchain-related technical services for institutions, such as consortium chains, regulatory technology and data analysis.
Native blockchain projects — This includes public chains, protocol layers, etc.
Let’s talk about how to assess projects in each of these sectors in more detail.
The success of ecosystem service projects generally depends on the project having active users. For both media outlets and exchanges, the competition is fierce, and it can be difficult to distinguish oneself. Founders who lack solid resources, extensive background or outstanding operational ability may find it difficult to make an impact with investors.
Exchanges for derivatives and brokers may have more potential. Crypto derivatives are still in their early stages, and compared with the traditional financial industry, crypto derivative platforms and brokers tend to have more space in the market to compete. The ability to design financial products is a key skill that investors look for here.
An interesting sub-section of this sector is wallet services. Wallets are shifting in new directions like asset management platforms (such as finance management, lending, DEX, etc.) and dAPP platforms (such as gaming). Read More...