If there’s one thing people ask me when they hear I’m building the token universe, it’s how to know what’s best to invest in.
The problem with this is there are thousands of tokens, and people often want to find unknown gems. Everyone’s heard of Bitcoin, Ethereum has recently grown in popularity, and Dogecoin gained significant traction during the 2021 bull run. But most people are less interested in investing in a token once it’s grown to a certain size. They want to find the next Bitcoin or Dogecoin.
Identifying leading token builders
Once someone decides to enter the token economy, knowing where to invest is the most important step they can take. I generally think it’s a good idea to allocate to major assets like Bitcoin and Ethereum. Beyond that, many have found success by following the developers.
“It’s important to look for the true builders.”
What do I mean by that? Well, as much of the world has learned from 2021 through 2022, the token economy moves in cycles. Crypto generated huge hype in 2021, but prices have since declined. The combination of cyclical market cycles and lucrative financial opportunities often attracts vapourware projects. Crypto veterans know that it’s normal for projects to promise the world in bull markets then fade out in bear cycles.
That’s why it’s important to look for the true builders—the ones who believe that tokenization will create a better future for humanity. Ethereum’s Vitalik Buterin is arguably the best example of one such builder. But it’s not hard to identify other leading figures such as Uniswap’s Hayden Adams and Aave’s Stani Kulechov in the nascent decentralised finance space.
Parallels with the early Internet
This idea of following the developers is not unique to crypto. Back in the 90s, Microsoft executive Steve Ballmer memorably celebrated “developers” in an enthused chant at one of the company’s flagship events. Developers were key to the growth of the early Internet, and they will be key to Web3’s success.
If you’re still not convinced, think back to Ethereum’s Merge to Proof-of-Stake. The Merge happened because there were hundreds of talented builders working tirelessly on the landmark update.
But beyond key events like this, would-be token investors can get ahead by scoping out thought leaders who oversee all-star teams. You’ll often find that extremely bright individuals lead the most promising token projects. They tend to lead teams that push boundaries with new technologies. At token.com, we’re believers in supporting the top talents in the ecosystem. That’s why we curated a Collection featuring Crypto’s Brightest Minds. It features the likes of Buterin and Kulechov alongside other top names in the space.
As the past two years have shown, the token ecosystem attracts lots of hype. But not every project is worthy of attention. But for those who can identify the bright minds and builders pushing the space forward, working out what projects might be worth investing in becomes a lot easier.
Mel Gelderman, CEO of token.com
Please note: Investing in cryptoassets is risky. Due to the volatile nature of the cryptocurrency market, investors run the risk of losing their funds when they make an investment. Returns from cryptoasset investing are not guaranteed, therefore users should always be aware of the risks.