In this field, one thing most people are probably doing is spot trading. But many people may not know why they buy this coin. Maybe it's because they listened to other people's opinions or saw some so-called news about the coin. But what I want to ask is, do you really understand the coins you buy?
Some people may not even look at the K-line, as long as they hear someone say that a certain coin is good, they will buy it blindly. If the corresponding coin rises several times in a short period of time after buying it, then you are lucky. But more often, you may face the fate of "falling as soon as you buy".
In fact, when I first started trading, I was in this state like many people, which led to me buying a lot of "zero-value coins" in the past. I even bought more as the price dropped (more because I was not convinced or unwilling to accept it), and then kept adding positions until the coin slowly returned to zero before I gave up completely. I think many people, especially newcomers to this field, have lost most of their capital in this way!
So, how to avoid this dilemma?
First of all, if you don’t understand K-line and don’t have much time to study the project, then the best way is what I often say: use the DCA method to invest in BTC and ETH and make long-term investment plans.
The so-called DCA refers to Dollar Cost Averaging, which is an investment strategy of buying a fixed amount of an asset at specific intervals (such as once a month).
For example, it is very suitable to start regular investment at this stage (BTC is already at the bottom range). If you start regular investment now and stick to it, then by the next bull market (24 years? 25 years?), you can get at least 3-5 times the return. For investment, this rate of return is actually very high.
But if you enter this circle with the mentality of getting rich quickly or wanting to get rich overnight, then I can't do anything! At this time, I suggest you adjust your mentality first, or you can read my previous article here: "What are the ways for ordinary people to make money in the cryptocurrency circle?"
Secondly, if you have more time to study the project itself, then to a certain extent, you can improve your investment success rate. But for you who have just joined this field, perhaps no one can patiently tell you how to analyze a project.
It is better to teach someone how to fish than to give him fish. So today, in response to this problem, I will once again give you a simple template to tell you how to research and analyze a project. Next, we will take the CELL (Cellframe) project in the above picture as an example to give you a simple demonstration.
1. What is this project? What track does it belong to?
We can find some introductions to the project through Cellframe's official website (including white papers) or Google. Cellframe provides a scalable blockchain platform that can be customized for any product such as medicine, energy, ecology, telecommunications, law, and markets.
Simply put, the project is a blockchain platform designed for decentralized networking and secure communications, providing a framework for building a variety of decentralized applications (DApps) that prioritize privacy, security, and scalability.
If we were to classify it, we could probably put it in Layer 1, whose main goal is to promote secure and scalable cross-chain transfers.
2. What real need or problem does the project solve?
From some known information, we can learn that Cellframe is a project that was launched in the first quarter of 2021. It is developed in C language. The main chain adopts the POS consensus mechanism. It claims to use an anti-quantum attack algorithm and a cross-chain communication network with built-in double-layer sharding technology.
The Cellframe network helps developers deploy subchains with customizable consensus mechanisms, similar to Polkadot Substrate and Cosmos SDK. Its subchain applications can be developed in Python, and the network main chain is mainly responsible for communication between subchains.
From a demand perspective, Cellframe, as a distributed, scalable, open source platform, has the potential to revolutionize the way businesses, developers, and users interact with blockchain technology.
3.What are the advantages/innovations of this project?
Cellframe is built through a unique technology of dual-layer sharding, conditional transactions, and multi-party computation, allowing seamless interoperability as well as fast and affordable transactions, all secured by integrated quantum security measures.
And because the platform is written in C, t-dApps built on the SDK can be executed on any device from an enterprise mainframe to a home smart refrigerator, enabling developers to build a wide range of applications.
The most attractive point of this project is probably the quantum encryption it promotes. Cellframe integrates variable post-quantum encryption, which not only supports multiple quantum-resistant signatures at the same time, but also allows the network to dynamically upgrade the algorithm, which will enable the network to adapt to any future innovations in the field of quantum computing.
Therefore, from a technical perspective alone, Cellframe seems to have some advantages over Polkadot Substrate, such as its quantum cryptography, two-layer sharding, and P2P cross-chain operations.
4. Who are the founders/team members? How is the financing situation?
The CEO of the project is Dmitriy, a Russian who is said to have nearly 20 years of development experience. He worked as a software developer at Keysoft for one year and then joined a Russian software development company as a development manager for 10 years. The other members of the team also have development-related backgrounds.
Cellframe raised $900,000 in a private placement round in March 2021, with 3Commas as the investor. During the same period, it raised $106,000 through the TrustSwap platform IDO (initial price was $0.1), bringing the total raised to $1.006 million.
5. How active is the community?
Cellframe currently has 28,600 followers on Twitter and 13,000 on Telegram. We can further query the project using the lunarcrush tool introduced in the article.
LunarCrush allows you to sort by different metrics, such as social volume, bullish/bearish sentiment, etc. You can judge Cellframe based on its total social volume and the ratio of bullish to bearish sentiment. Some commonly used metrics are as follows:
Social Volume: The number of times crypto is mentioned in a given time period. For example, if someone uses the word Cellframe on Twitter, the social volume for Cellframe will increase by 1 during the analyzed period.
Social Engagement: The level of community involvement around crypto. This metric takes into account publications, comments, and even shared reactions to exclude any form of manipulation and spam.
Social Contributors: Just like Social Volume, which collects unique mentions, this statistic identifies the number of unique people talking about a thing in a given time period.
Shared Links: The number of times a cryptocurrency-related URL link was shared.
In addition, there are two custom scores in the tool, called AltRank and Galaxy score, which can be used as a reference.
AltRank is a composite metric that is made up of the following metrics: Market Volume Rank (a measure of a currency’s market volume based on verified volume), Social Media Activity Rank (a measure of unique activity across all data sources), Percent Change Rank vs. Bitcoin (a measure of a currency’s performance relative to Bitcoin), and Social Media Rating Rank (a measure of total activity across all data sources). In short, if a cryptocurrency’s AltRank is consistently ranked in the top 25, then you should keep an eye on it.
Galaxy Score: Measures the performance of a coin by combining various performance indicators across the cryptocurrency market and social media. Scores above 50 are bullish, while scores below 50 are algorithmically bearish.
In short, the higher the actual activity of the community, the more people will pay attention to the project, which also indirectly reflects that the development of the project should be getting better and better.
6. What is the project development roadmap? Is it being developed as planned?
The project announced the launch of a $10 million ecological construction fund in March 2021, and launched KelVPN, the first sub-chain project based on the network, in April 2021.
According to information provided on the project's official website, the test network will be launched in November 2021; security audits and penetration tests will be conducted in January 2022; the main network will be launched in March 2022 and connected to the Ethereum main network; the D-services main network will be migrated in April 2022; the WASM-based smart contracts will be launched in June 2022; the dedicated storage service will be launched in August 2022; and the main network will be launched on March 31, 2023.
7. What is the token economics situation?
Specifically, we need to have a comprehensive understanding of the purpose, supply, distribution, unlocking cycle, stabilization mechanism (destruction/buyback) and other aspects of the project tokens.
The tools that can be used here are mainly CoinMarketCap, CoinGecko, tokenunlocks, vestlab, etc.
CELL is the token of Cellframe, and its main purpose is to serve as evidence of participation in the transfer of value consensus within its ecosystem and for users to participate in Cellchain auctions and leasing.
The current total supply of CELL is 29,735,000, the maximum supply is 30,300,000, and the circulation rate is around 98%. The current MCap (market value) is only $4.73 million. The historical highest price is $13.19 (November 16, 2021), and the historical lowest price is $0.1276 (June 1, 2023).
The main reason for the plunge in June should be the following: According to Numen chain monitoring, at 10:07:55 on June 1, 2023 (UTC+8), Cellframe Network was hacked on BSC due to problems in the calculation of the number of tokens during liquidity migration.
According to some public information on the official website, the CELL token was updated in May 2022. They mainly changed the reward ratio of CELL to bring more liquidity to UniSwap and Pancake pools. In addition, they have invented a mechanism for issuing mCELL tokens so that masternode holders can choose whether to pledge a single CELL or pair it with ETH, BNB, or stablecoins - either way, they will let mCELL process transactions and provide services (and profit from it). In addition, in order to build a long-term viable ecosystem, they will also release $2 million in CELL reserves as planned, of which 1 million will be emitted in mid-2023 and 1 million will be emitted in mid-2024. These funds will be used to develop the project.
Currently, there is relatively little information about CELL tokens, and the official does not seem to have given much introduction and explanation. The above descriptions seem to be the only ones that can be found with reference value.
8. What is the TVL/revenue of the project itself?
Currently, the commonly used tools such as tokenterminal and difillama cannot find any information about Cellframe, which only shows that the Cellframe ecosystem is still in its early stages and has not yet developed. In addition to the core products Cellframe Wallet, Cellframe Node, and KelVPN (a decentralized VPN based on the Cellframe network protocol), no more ecological projects have been found for the time being.
9. What is the liquidity of the token? Will it be listed on the top exchanges?
In addition to some DEXs (Uniswap, Pancakeswap), CELL is currently only listed on Gate. The current liquidity and trading volume of the project are relatively low. Moreover, because the project has not yet received investment (recognition) from more well-known investment institutions, it is hard to say whether it can be listed on a large exchange like BAN in the future. But if it can be listed on a large exchange, it will definitely be good for the price of its token.
10. Risk/return, price factors, etc.?
In general, Cellframe, which has been around for more than two years, is still in the concept + development stage. In addition, most of its team members have technical backgrounds and lack experience in marketing and hype. If you bought CELL because you were optimistic about Cellframe, you are basically stuck, and judging from the overall market conditions, you will only be stuck deeper and deeper in the next period of time. Therefore, if you already hold CELL, it is recommended that you continue to hold it. Maybe in the next bull market, with the concept of the project's "anti-quantum attack algorithm" and effective ecological construction progress, there will be opportunities to get out of the trap and even make a profit.
If you are a short-term player, you can also use K-line and other technical indicators to make swings. But my personal advice is not to buy CELL in the short term.
If you are a long-term investor and are optimistic about the future development of the Cellframe project, then at the current stage and price ($0.16), you might as well slowly accumulate some CELLs, and there may be good surprises in the future. However, such surprises are often accompanied by long-term high risks, so you need to have a relatively good mentality and only try small positions. Don't take risks with your own capital at will, DYOR.
Well, that's all I shared today through "Hua Li Hua Wai". Let's summarize and review it together. This article mainly sorts out some basic methods for researching and analyzing crypto projects, and gives you some specific demonstrations through the specific project Cellframe. In short, in this field, if you are doing transactions, it is very necessary to spend some time in advance to do basic research and study on the projects you are interested in. It is better to teach someone how to fish than to give him fish. Now, you can also analyze the projects you are interested in according to my basic ideas above.
I hope today's sharing can be helpful to everyone. If you have any questions related to the blockchain field, you can leave a message or ask a question on the planet, and we can discuss it together.
Special thanks to: IamZeroIka, 0xTHades, Senka (cover design)
Disclaimer: The above content is only a personal point of view and analysis, and is only for the purpose of popular science learning and communication among the majority of enthusiasts. It does not constitute any investment advice. Investment is risky, please treat it rationally, improve risk awareness, and abide by the relevant laws and regulations of the country and region where you are located!
