How do you determine if a Web3 project is reliable?

1 Check the code

One of the main features of Web3 is that it is powered by open-source code that anyone can inspect, verify, and contribute to. This means that you can check the quality, security, and functionality of the code behind a Web3 project. You can look for code repositories on platforms like GitHub, GitLab, or Bitbucket, and see how active, updated, and documented they are. You can also look for code audits, bug bounties, and testnets that show how the code has been reviewed, tested, and improved.

2 Check the community

Another key feature of Web3 is that it is driven by communities that share a common vision, values, and goals. This means that you can check the size, engagement, and diversity of the community behind a Web3 project. You can look for social media channels, forums, blogs, podcasts, newsletters, and events that showcase the project's vision, mission, and roadmap. You can also look for feedback, reviews, and ratings from users, partners, and experts that reflect the project's reputation, credibility, and impact.

3 Check the tokenomics

A third feature of Web3 is that it is enabled by tokens that represent value, utility, and governance in a network. This means that you can check the design, distribution, and performance of the tokens associated with a Web3 project. You can look for whitepapers, tokenomics reports, and dashboards that explain the token's role, function, and mechanism in the project. You can also look for market data, analytics, and trends that indicate the token's supply, demand, and price.

4 Check the governance

A fourth feature of Web3 is that it is governed by protocols that enable collective decision-making and coordination. This means that you can check the structure, process, and outcomes of the governance system of a Web3 project. You can look for governance documents, proposals, and votes that outline the rules, rights, and responsibilities of the stakeholders in the project. You can also look for governance tools, platforms, and forums that facilitate the participation, communication, and collaboration of the community.

5 Check the innovation

A fifth feature of Web3 is that it is constantly evolving and innovating to solve new problems and create new opportunities. This means that you can check the novelty, relevance, and potential of the innovation offered by a Web3 project. You can look for problem statements, solutions, and use cases that demonstrate the project's value proposition, differentiation, and scalability. You can also look for innovation indicators, awards, and recognition that acknowledge the project's contribution, leadership, and influence in the Web3 space.

6 Check the risks

A final feature of Web3 is that it is exposed to various risks and challenges that may affect its reliability and sustainability. This means that you can check the threats, vulnerabilities, and mitigation strategies of a Web3 project. You can look for risk assessments, reports, and alerts that identify the technical, legal, regulatory, and ethical risks that the project faces. You can also look for risk management, contingency, and recovery plans that address the possible scenarios, impacts, and solutions for the project.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?