Finding next 10x in Crypto
We already discussed fundamental metrics in defi, what they mean, and how protocols are gaming them here.
Now it’s time to learn tools to find projects early. The most powerful tools for beginners are Token Terminal and DefiLlama.
Token Terminal
- You should look for outliers in metrics. If I see for example revenue or TVL growing significantly, then I will check valuation (should be relatively low in comparison to other metrics, preferably under $30 million, or even better around $10 million).
You can filter the data easily through the dashboard, sorting by fees or P/F ratio.
Let’s sort by fees in the last 30 days (descending). For instance, performance of Origin Protocol stands out in the last 30 days because it made a gain of +111% and simultaneously 30d sum of $193.3k is the first meaningful number (Azuro doesn’t have a token and Bitcoin is definitely not early for us, plus P/F is insignificant).
Opening more info about the project and see most of the metrics are green, P/S is low, market cap is also small — all is good.
Can open “business model” and understand more about how it structured.
2. Next is checking the price action and volumes on CoinGecko for the project (you should be able to easily buy and sell the project). The price should have some positive movement.
OGV here is an example of a great price movement you should look for. Market cap is still $3.8m, we see it growing and the price is consolidating above previous all-time high of $0.009.
3. To be honest only after that I would look at the project’s website and see in details what they are doing (because previous steps take a couple of minutes to filter opportunities, but understanding tech requires more time).
4. Checking out social presence (Twitter is the fastest way, there you see what upgrade protocol underwent or product launched).
DefiLlama
DefiLlama is a more versatile tool and helps to navigate numerous chains, see a movement of money between them, find the most growing, and then dig deeper into applications on that chain.
First, you can see which chains are growing the fastest in TVL.
- Go to DeFi → Chains 2) Look at the 7D and 1M metrics. The obvious outliers are Arbitrum and Optimism.
2. Then we should identify where new money is going.
Go to Stables → Chains
Optimism has rising TVL, but outflows of stables. Arbitrum on the contrary has inflows of stablecoins. This makes Arbitrum more attractive to look for opportunities.
3. Then you look at Arbitrum native applications (dapps) with growing TVL. An exclusive presence on one chain is better for the new project because it can become the attention engine and hence money magnet there more easily.
It really helps to see what new projects DefiLlama listed recently to see currently popular sectors.
Also, you can check out what leading investors invested recently to know what new things are happening in defi and be ready to buy things when they became public.
After finding these new projects you are again opening CoinGecko to see price action and valuation. If it’s good you look at what protocol is doing, check their social media and if everything is great you can buy. Try these platforms yourself, you might discover other ways to find 10x gems.
The word of caution: When a project is new the risks are high, so you should not go above 5% of your portfolio on a new gem. Just a couple of such small bets are enough to make it big, so do not make your portfolio full of these.
