I have tried and got involved with a lot of projects in cryptocurrency over the years and sadly only a handful are really at a decent working stage right now. There was a lot of money that came in during the ICO days and lot of projects didn't live up to their whitepaper plans and the promises that were made. This has the left the field wide open for competition to really thrive with a working dapp. If you are working on or have a cryptocurrency project out there are pitfalls that you need to avoid if you are going to do well in this industry.
1.) Dumping From The Team
This is a BIG mistake I see from a lot of sites where the team is paying for everything with the coin itself with little regard to the price of the investors. Selling a big chunk of coins can finance your venture but it will come with the cost of flooding the market and lowering the value of the coin. This really hurts smaller investors and makes the coin less attractive to investors. Raising funds once is fine but I see companies who do it multiple times or use the inflation of the coin as a means to continually fund their project. This creates a downward price spiral as constant sell pressure is entering the market just to keep the site afloat.
2.) No Outside Revenue
As great as cryptocurrency is it is not at the stage where you can depend solely on it. A lot of sites run with no plans of outside revenue for their site such as subscription fees or ad revenue. The money raised from an ICO or the inflation of your coin can go a long way but as I stated in 1 if you depend too much on it this will lead to the value of the coin going down constantly until people give up on the project and you cannot afford the rent.
3.) The Volatile Market
No matter how well you and your coin are doing it can turn very fast. We say 90% drops from 2017 and if you were running your site with the plan the money would keep rolling in you were not ready to handle the bear market that lasted over 2 years. When things are going well you need to prepare for the days when you hit bumps in the road. I'm not saying don't take advantage of the bull run just keep in mind that is can only last for so long and you will to be ready to thrive in the bear runs as well.
4.) The Echo Chamber
Aren't we great? We sure are. Echo chambers happen a LOT in this industry with a small group telling each other how great everything is while new users come in unhappy. You need to think of how things are for everyone using the site and how it is for people coming into the site from outside of the site. We still have a small number of users in dapsp in general compared to apps with millions of users so we need to open up conversation and listen to those outside of the echo chamber
5.) Thinking The User Will Adapt
A have seen the argument made before that people should learn how to use cryptocurrency and how to use our site. You cannot put the onus on the customer as they will just use a site that is easier to use instead of going through the hurdles of how to use your site. The expression the customer is always right is well-known for a reason as you need to work for them and making it a service that works for their needs. A lot of people have no idea what cryptocurrency is and there is a big barrier we need to overcome before the masses start to use these applications.
The best example right now is what Leo Finance is doing right now with Twitter sign-ups. Starting today people can use Twitter to make a Leo account and get into cryptocurrency in seconds with no risk.
There is a lot of opportunity here for new projects to really do well but you will need to be smart with your money and make your product one that will work for the majority of users not just a small niche. And no matter how much experience you have to need to keep your eyes open and see why other sites have gone under over the years to get an idea of what to do and what not to do.
Oh and do not gauge your success by how well you are doing during in a bull run. It is easy to grab an upwind in a bull run and think you are a genius who cannot make a wrong move. I was there in 2017 and when everything is going up it feels like every decision you make is the right one. You need to be smart and still question how you can do better even in the best of times.
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I agree with you lots of good project get ruin because of these problems I think if you gonna make cryptocurrency then stick to the plan and work together to support if not it lead to ruin
Yeah you really need to work with the community and succeed together.
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That last one is definitely the kicker. I think it is really cool what Leo has been doing to allow account creation with Twitter. I know that the WAX chain has been doing something similar for quite a while now with their Cloud Wallet. You can pretty much use any social media account you want to get signed in and started up. It is a great step towards brining crypto to the masses.
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For sure, you need to see it from the perspective on the new user who doesn't know what crypto is. I see Wax pop a lot with NFTs and such so they are on my radar.
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WAX is really awesome I am holding a ton of NFT's on there right now. Waiting for the games to drop and then hoping to make some profits. I have a pack of cards I bought for $26 and sold for $260.
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Beautiful post, you're surely getting my tipu vote for this.
I think basically it's imperative to create new money in any Crypto start up project so far because this will make it possible to give a coin an opportunity to maintain a certain kind of consistency without dropping too badly in price. Leofinance is doing an amazing job at this.
@tipu curate
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Upvoted 👌 (Mana: 11/22) Liquid rewards.
Thank you for the tipu vote :)
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Ain't this the truth, I have been around while a few tried to start up mainly the steem forks or tribes and let me tell you your points are about spot on for all of them. Using forked coins to sell and get listing or pay server or pay team but all they are truly doing is dropping the value of the coin.
In the end we have to think about the users
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