Hundreds of Crypto projects launch every day, everything moves so fast, and the barriers to entering with your own project are very low. This also means poorly planned projects with shitty concepts, lousy execution, or just pure scams. This makes it even more important to learn how to do your own research, do some basic fundamental analysis, and quickly assess your investing projects. This can save you a lot of headaches and prevent losing your hard-earned money.
Doing research and fundamental analysis for a crypto project can take many days, depending on how deep you go. You also need some specific research and analytical skills; otherwise, it can take even longer.
Here I will give an overview of a possible process, how you can do a quick fundamental analysis, and try to figure out if a project is legit and viable or not. I am not a financial or legal adviser in any way, you need to do your own research, and this process can help you with that. Also, be aware that there is not only one way to do this; the best is to find your own way; maybe my process will give you some guidance.
For a complete analysis, we spend days, sometimes weeks, to understand different facets of a project; this is more like a quick checklist and test.
Let's go through the process and tools you can use.
1 Basic Information on Coingecko (or similar Pages)
We will use Coingecko for our initial research and get the first information on the example project that we are looking at. There are other pages like Coinmarketcap or Coin Paprika that you could use for this purpose.
Today, we will check the cryptocurrency project Gather (GTH), which is a new project to me, and I want to assess it quickly.
Category: Smart Contract Platform
1.1 Check Market Capitalization and TVL
I explain the Marketcap and why it is crucial in this article.
The market cap says a lot about how mature and risky the project is and you also get an approximate growth potential from that. Usually, you have Large Cap, Mid Cap, Small Cap, Micro Cap, and Nano Cap Coins; you can also read more about it here.
The key point here is that a coin like Bitcoin with a market cap of around 1 Trillion USD is very unlikely to drop 50% or double overnight, while a Micro Cap Coin like Gather (GTH) can make 10 x or lose 90 % of its value in a brief period.
Beginners often only check the current price of a Project; that is a mistake; the Marketcap in combination with the Circulating Supply and the Max Supply is more important. Let's have a look at them.
Gather (GTH) has a
MarketCap of $26.634.645,00
Fully diluted Market Capitalization of $76.014.400,00
which means around 1/3 of the tokens are already circulating.
There is no real information available; via DexScreener I found that 9.309.259 GTH are pooled in a Uniswap GTH/WETH Pool.
1.2. CIRCULATING SUPPLY/MAX SUPPLY
Next, we check the Maximum Supply and the Circulating supply of our Project, so the questions here are:
- Is there a maximum supply?
With GTH, we have a maximum supply. ETH, for example, does not have one, and Bitcoin has a maximum supply of 21.000.000. - What is the max supply of the GTH token?
Coingecko says that there is a maximum supply of 400 million GTH Tokens. - How many Tokens are currently in circulation?
According to Coingecko, 139.316.657 GTH are circulating at the moment.
If you do not trust one source, you could double-check those numbers, but we want to be done within 60 minutes, so time is running, and we continue.
💡It is crucial to understand the connection between supply and demand, the current supply the max. supply and the price. How much does the demand need to increase to drive the current market price?
1.3 24h Trading Volume
Now we will check how liquid the project is and how much trading is going on. To get more than the last 24 hours here, you can also check Tradingview to get a historical perspective on the trading volume.
Our main question is how liquid is the coin?
We will check the ratio between the Marketcap and the Trading Volume in the last 24 hours.
Ratio 24hTV/MC = (24 Hour Trading Volume/MC)*100
Ratio 24hTV/MC = (886.427,00/26.634.645,00)* 100 = 3,33%
The more liquid a Coin is, the easier it will be to fill an order. 3,33 % is not a lot, which means the project is not very liquid. You should look for a Ratio over 10%, but this is just one of many data points we look at. So this does not stop us.
2 Project website
The next stop is the Website.
2.1 General Information
Here we are trying to answer the following questions.
What niche is the project attacking?
Here we try to find out into which category the project belongs. This helps to get a feeling of how the whole category is doing, who a potential competitor is, how they are doing, and so on.
In the case of the Gather, the project is not so easy to do a precise classification. The Gather Network has been a Smart Contract Platform since launching its Blockchain. Gather is also in the Decentralized Cloud computing category and Privacy / AdFree Experience Category. They are trying to attack more than one category, which can be a stretch, even if the combination of the categories makes sense in their case.
Their competitors are identified in this Competitor Analysis document and are namely Kaleido.io, Iex.ec, Dfinity.org, Storj.io, Iagon.com, Aelf.io, Golem.network, Sonm.com, Brave.com, BitTube.
Does the project have a state of the art Website?
If the Website has a terrible website, that is a red flag. Do not get me wrong; this does not mean that the project is shit; for now, we just do not have much time for our assessment if there are explanation videos that help us understand the project quicker. Great.
The Gather Website looks good on the first view, so that's fine.
Is the Value Proposition clear?
Is it possible to understand what the project is trying to achieve within a couple of minutes? If not, not a good sign. Identifying a problem and presenting the solution understandably is vital, like in every other business.
In our case, the value proposition of Gather is relatively straightforward and neat and can be understood in a couple of minutes. They try to revolutionize the ads industry based on a proof of work model without building a mining community while opening new opportunities for monetization and rewarding your users. Looks good on the first view. To deeper assess the project, we would dig way deeper here; for now, we do not need to go there.
When was the Domain name reserved?
It would not be a good sign if the Website were registered recently if there is no reasonable explanation for that. So this is a potential red flag. You can, for example, check the registration at the ICANN website.
The domain was reserved six years ago on 15.9.2015 by gath3r ltd.
Does the Website has HTTPS?
It can be a red flag if the project aims to attack a Billion $ industry but cannot do the basic homework and set up a secure connection to their Website.
In Gather's case, everything is okay and SSL secured.
2.2 Whitepaper, Lightpaper, and other documentation
Within sixty minutes, you can not fully understand most projects in full detail; again we are looking for red flags.
You should be able to find the Paper we are looking for on the Website or sometimes also linked on Coingecko.
The questions we are trying to answer.
Is there a white- and light paper?
If there is none, that is, in most cases, not a good sign and a big red flag. Of course, there are also exceptions to this rule here, but the team needs an excellent explanation if they do not have one.
In our, case Gather has a bunch of documents prepared for you to study. You can find them here.
They have a:
- White Paper
- Overview
- Document for the Tokenomics
- Swot Analysis
- Competitor Analysis
- Smart Contract Audit for Ethereum and Gather
To fully understand the project, you should read through it, but not for now.
Let's just skim through the documentation to answer the following questions and spot possible red flags.
Documents are well written and not copied?
Documents seem to be well written and not copy-pasted. I check this by copying single sentences or paragraphs from the white/litepaper and put it into Google or DuckduckGo Search.
3. Tokenomics
Here we are getting an overview of how and when the Token is distributed. We also check how much money was raised. For us, there must be a fair share for the community, and early investors and founders are not holding too much (they could dump their coins), and that the tokens are unlocked over a more extended time.
How long is the supply release time till fully diluted?
A well-chosen lockup period and vesting schedule can prevent team, advisors, and investors from immediately dumping their bags and running away if things are not going as planned. If the team is receiving their share over a couple of years, that shows some commitment in the fast-paced Crypto Market.
For $GTH, the vesting period is five months for the seed round investors (5,6%) to up to 5 years for the Gather Foundation share (48,4%, locked for six months). The Tokens for the team (12,4%) are vested over two years. Overall the Token distribution schedule is good.
- How much money what raised at what price?
We try to figure out how much money was raised, by whom, and what investors paid at the launch.
Information on the official websites is not always correct; sometimes, the team tries to bury the dark past. Better double-check with information on Messari and/or with ICODrops . We did not find Gather on both of them, but ICOHolder was helping out with that. Later on, we will check who invested in the project.
Gather raised money in two rounds:
$325,400 in a Seed round, which translates to 22,6M GTH a $0.0144 (25% unlocked on the listing, vested over five months)
$960,000 in a Private Sale, which translates to 30M GTH a $0.032 (35% unlocked on the listing, vested over two months)
Do not forget there is a circulating of 139.316.657 GTH, including the 52,6M GTH of the investors.
If we had more time, we would determine if they are still on board or have dumped their tokens already.
- Are the Tokenomics bad?
No red flag in the Tokenomics of Gather seems to be okay. Information is a bit spread over the website, and I would wish for more details on how the funds are used.
4. The People involved
Here we are trying to find out more about the founders, the executive team, the marketing and tech team, advisors, partners, and investors.
4.1 Founders, Management, and Team
The next stop is the team, looking for red flags again.
Does the founding team have a proven track record, or is it fully committed to the project? Who are the advisors, and what is their track record?
First, I write down the name of the founders and the CEO and do a basic check of social platforms like Linkedin, Twitter, etc. For the deep dive, I would also look for podcasts and Youtube videos, collect them, and watch them in chronological order to answer some of my open questions and get a better feeling for the Vision and the project. I took notes and wrote down open questions that could not be answered by documentation and the website during the whole process. Those should be answered now.
Besides the Founders, I am also trying to figure out how the rest of the team is set up. Do they have a strong Tech and Marketing Lead who is working on Partnerships and so on?
In the case of Gather, a quick check of founders gives a good impression, and everything seems to be legit. They also started out in the Bear market circle, are still pushing the project forward, and did not give up. Many projects are dying during the Bear market. Kudos to the team for that.
4.2 Partnerships
Partnerships are essential. In the quick check, we will not have much time for that. I will just do a quick check if something is outstanding.
There seem to be a lot of partnerships; how deep they go is hard to say. A new publisher is joining the Gather network daily, the Gather team says.
4.3 The Crypto Investors
We are trying to find which kind of investors are on board, which other projects they are invested in. Are they committed long-term, and can they help push the narrative and project?
For a quick analysis, we try to answer the following questions
Are there any know investors on board? How many? Which are projects are they invested in?
On the website, there are investors mentioned. Gather raised $960K in a private sale that was oversold 25x.
The mentioned investors are:
- VC was founded in 2018 in Switzerland.
- 52 investments (e.g., Nansen, TheGraph, Illuvium, MyNeighborAlice, Fantom, FTX, Polkadot, yearn.finance)
- Gather not mentioned on the website
- VC was founded in 2018 in New York
- Focus Digital Assets, Web 3.0, and Blockchain Infrastructure
- 35 Investments, e.g., AvaLabs, Kava, Polkadot, Akash
- Gather not mentioned
- VC was founded in 2017 in Hong Kong.
- "We create and fund transformative blockchain companies"
- Efinity, Citadel.one, StartAtlas, PolkaFoundry, Unido, Casper, Gather, Storj, Elrond, DaoMaker, Kraken, Coinbase, etc.
- VC Founded in 2017 in Shanghai
- "Redefine a Better World with Digital Economy"
- Kraken, Polkadot, Ankr, REN, Litrentry, Sunday, Daomaker, Coinlist, Mina, Polygon, Near, Boba, Algorand, Avalanche, Demole, Rmrk, Terra, Immutablex, Efinity, StarAtlas, Illuvium, Decentraland, BigTime
- Gather not mentioned
Only Master Ventures mentions Gather on their Website; maybe the others already dumbed their bag.
5. Roadmap & Execution & Progress
Like in every business, you can have a great idea and Vision, but you will fail if you are not executing your plan. We have a close look at the execution of the whole operation.
- How detailed is the Roadmap?
I am not fully satisfied with what I found with the Gather Network with my quick research. I did not find dates in the public Roadmap. The good thing is that the following steps and following actions are clear, but I still would wish there was a more clear termination of the Roadmap. In this interview with the founder on Hackernoon, you find a little more information regarding the Roadmap than on the website. Overall, the Gather team more or less kept their promises and had a clear idea of where to go next.
- Are there unrealistic development claims?
No unrealistic claims; the team seems to deliver almost on time. Gather Mercury Release (Own Blockchain) went live on April 30th, just a bit delayed, but no red flag. The Gather Minerva is delayed. (planned launch was Q3/2021). The Minerva release aims to bring GTH holders to the native chain. The Gather cloud should be ready soon, and the onboarding of publishers is ongoing.
Publisher can integrate Gather to their websites and start generating revenue.
- How is the activity on Github going on?
I did not find a public Github repository; it seems Gather is not open source. This is not necessarily a bad sign, but not good to get an overview of the project's progress.
6. OnChain Data - Blockchain Explorer
Next step. Check the explorers.
This is an important topic where we would spend more time in a deeper fundamental analysis.
For the quick check, we will do the following.
Is the project ERC20 based or based on another known blockchain? Does the project have a mainnet?
If you are deploying on Ethereum, BSC, Fantom, Cronos, you can start your own Blockchain literally within minutes. On the other hand, deploying your own native mainnet consumes many resources. (time and money)
Of course, it is not a red flag if a project does not have its own mainnet (over 90% do not), but it's a positive thing if they have one. This, of course, does not mean a project will succeed, but the likelihood that the project is a scam is very low.
Let's have a look at the Crypto Asset Gather.
Good News, Gather started on the Ethereum Network but launched their own mainnet end of April 2021. It looks like there is no Gather Explorer available yet.
Let's dive into the Explorer and gather some numbers.
We are looking to answer a couple of questions.
Is there a list of token holders? (if not, a red flag)
There is a List of Tokenholders on Etherscan, like with every other project on Ethereum. Let's see how this will look like on the Gather Blockchain in the future.
Are there whales that could dump?
The two biggest holders that are not smart contracts or exchange addresses hold 4,6438% and 0,8384%.
How is the trading volume?
The trading volume was $1.106.265 in the last 24 hours.
How is the user growth? How many holders are there?
At the moment, there are 3931 Holders. We could not find out quickly how those numbers developed over time, but all is good.
7. Markets
Here we are trying to find out which Exchanges the Project is traded on, how the trading volume is, and how deep the order books are. If the financial asset you are looking at is only available on decentralized exchanges like Uniswap, check if it is liquid enough. Be careful with crypto assets that are not liquid.
We are trying to answer the following questions.
On which exchanges is my asset listed already?
At the moment, Gather is listed on Uniswap, Bitglobal, BitMax, Gate.io, and Hoo.com.
What does the Coingecko Trustscore say?
The Trustscore is green for all five exchanges; that's good.
Is the trading volume on the exchanges okay?
The trading volume on 7. Dec 2021 is between $50300 on Gate.io and $254.000 on Uniswap. We know that the trading volumes could be "wash traded," and the real volume is nowhere near.
💡 Wash trading means that crypto traders buy and sell a crypto asset to generate volume and generate misleading information for the market.
How deep is the order book, and what is the spread?
It is important to look at the spread (difference between bids/asks) and the +/-2% depth. How many $ will it take to move the price for 2%?
You can compare the spread and +/- 2% depth with Bitcoin. Compared to the volume, the depth on Uniswap seems to be okay; on Bitglobal, you just need a bit over $500 to move the price for 2 %. Half of the volume on Uniswap is within the 4% price range, which seems okay.
8. Check Community & Social Media Channels
Next, we try to feel how the community is doing, how professional their communication is, and how everything fits together.
We are trying to answer some questions.
Do they have Twitter, Telegram, and Discord? How many followers do they have?
Twitter and Telegram is the bare minimum to have in the Crypto Space. We have also checked the joined date of Twitter. If the Account was created a couple of days ago, that could be a big red flag if there is no good reason. The number of followers and users is not so significant; you can easily buy them.
Let's check for Gather.
Gather has a Twitter Account with 11.5k Followers and was created in April 2018
Their Telegram Channel has 4.5k Members.
They do not seem to have a public Discord. No Problem.
How are the quality of the content and their posts, and how is the engagement? How is the quality of the replies?
Take a couple of minutes to go through the pinned posts in Telegram, Discord, and Twitter and see how often they post original content and how the quality is. Are the users engaged with the content; likes, comments, shares? Check the replies and see how professional the team is and which kind of accounts are interacting and retweeting. If Vitalik Buterin is retweeting, it has a higher value than a newly generated no-name account.
Also, try to search for the $Token on Twitter of the project and Search the channel for "problem," "scam," "help" in Telegram and Discord. Also, checking Lunacrush is good if the project is already available there. At Lunacrush, you can get further information about the social sentiment, the top accounts involved with the project, and more. It makes your research life more manageable. The idea here is to get an idea of the market sentiment.
For Gather, there are a couple of relevant tweets per week, and the interaction is okay-ish. Same for Telegram. The communication looks professional.
How is the activity on Discord and Telegram?
How many (quality) messages are there per day approximately? Just should give a feeling of how engaged the community is and the quality of the communications.
For Gather on Telegram, this seems to be fine.
Is the project team posting quality content on medium?
Content Quality seems to be okay.
How frequently is the team posting updates and quality content on medium?
Gather in the last half-year posted as follow on their medium.
Four articles in October
One in July
Three in May
Not great, not terrible, they are a bit more active on their Blog
No red flag, at least.
9. News
At the next step, we will find out what kind of news is published around the project. Due to the time pressure, we are just skimming here. We will use Cryptopanik.com, and the Google News search for that purpose.
Who is talking about the projects, and what are they saying?
The following search in Google News, "Gather network $GTH," brought six results. The most relevant are Yahoo Finance, Benzinga, and Hackernoon.
Are there any big events coming up?
The Gather Cloud is supposed to launch soon, and the $GTH Token should be available soon on other Blockchains besides Ethereum.
Is there anything concerning?
Nothing concerning in the News.
Conclusion
This is my process of doing a quick Fundamental Analysis on a project that caught my attention. The primary purpose is to get an overview of the project, know if there is a real problem to be solved if the project can win that niche, and identify potential red flags and spot a possible scam. If there is nothing concerning or even better if we find something remarkable in the first 60 minutes of research, the project goes to the shortlist where we would put more effort in and do a more comprehensive investigation.
My general rule, the higher the percentage of my investment I am planning to put into a project, the deeper I dive with my research. For investments smaller than 1% of my total portfolio, I am also aping into something from time to time. It would help if you were on top of your risk management. Otherwise, you will probably get wrecked at one point.
Anyhow, if you learn how to do your own research, have your risk management under control, and are willing to spend 60 minutes on research before putting in your money into a new project, it is likely to significantly reduce your risk of losing it and increase your chance of picking winning trades.
But let's summarize what we found for Gather. There were no actual red flags, to begin with.
The project has a big vision and a clear direction where they want to go and healthy Tokenomics. The team is good and holding their promises. Also, they were starting in the dry Bear market phase. A team with perseverance and commitment is essential in the fast-moving space.
The main trading activity is going over Uniswap; a listing on further exchanges would be good. The liquidity, spread, and depth on Uniswap are okay for now.
The communication of the Gather team is professional, but the community is still small; there is growth potential. We will see in the following months how this is developing with some big news and launches coming up.
Potentials
- huge growth potential due to the comparatively small market cap and the big Vision. (20 to 100 X growth potential?)
- Great Vision, with the launch of the own Blockchain and onboarding of Publishers (starting soon), we see good growth.
- Upcoming Minerva launch
- solid website, Whitepaper, documentation, and roadmap
- solid team, including advisors and partners
- Healthy Distribution of Tokens through the holders
- Multichain Launch on BSC and Solana?
- Listing on further Exchanges (nothing announced)
Risks
- From short term Technical Analysis (TA) perspective and price development, the project does not look so good
- no real dates in the Roadmap, no big problem since the Roadmap makes sense.
- Three of the four institutional investors did not mention Gather in their Portfolio. Why?
- Marketing, social media, and growth efforts enough? Can the current team get the needed growth?
We like the project, and definitely see the potential, but we need growth in the next couple of months to make the next step. The Minerva and Multichain launch should make this possible.
We will have a close look at the price action of $GTH in the following weeks and try to buy the dip after finding a stable support level.
Enjoy, stay weird and leave your email address to get updates about new Crypto-related News.
Disclaimer
The article contains affiliate links. If you are using them, you and I will get a Bonus.
This website includes information about cryptocurrencies and other financial instruments. All these areas are complex instruments and come with a high risk of losing money. We are NOT giving financial or investment advice; this page is for educational and informational purposes only. Please be careful and make sure that you understand how these instruments work. Also, think about whether you can afford to take the risk of losing your money.
Weirdo.Rocks encourage you to do your own research before you make any investment decision.
Resources
Coingecko https://www.coingecko.com/
Coinmarketcap https://coinmarketcap.com/
Coin Paprika https://coinpaprika.com/
Gather Documentation https://gather.network/documentation.html
Gather Technology Page https://gather.network/technology.html
Gather GTH Ethplorer.io https://ethplorer.io/address/0xc3771d47e2ab5a519e2917e61e23078d0c05ed7f#tab=tab-holders
Interview with Reggie Raghav Jerath CEO of Gather Network https://hackernoon.com/interview-with-reggie-raghav-jerath-ceo-of-gather-network-r119379d
