The Three Most Common Pitfalls That Every New Crypto Project May Face
For every crypto project, a token launch is a turning point in its history. A token launch by itself is a responsible event; many teams prepare for this moment far in advance. More often than not, they achieve their goals using their in-house resources rather than hiring third-party experts.
Every now and then, however, nascent projects can run into challenges they might have learned about before they even launched. In today’s article, we’ll go over the three most common ones.
The first in a row is a systematic survivor error.
Systematic survivor error, also known as survivorship bias, is a kind of psychological trap that misrepresents statistical data. It is easy to fall into this trap: It is enough to draw one-sided conclusions without looking at the whole picture. This mistake is made when statistics from the group of successful cases, the “survivors”, are used in the selection of information, while data from the “failed” group are neglected.
In other words, focusing only on a few projects that made it happen while ignoring the many others that have not could create a prejudice, that is, form a preconceived and unfounded opinion.
The second pitfall that can mislead aspiring crypto projects on their way to a successful token launch is the loss of management control.
On the one hand, using one’s powers is a reasonable strategy, especially for young projects with relatively small budgets. On the other hand, hiring more than three different teams to handle marketing, the website, smart contracts, security, market making, etc., can make supervision nearly impossible.
Namely, in this case, you spend most of your time communicating with subcontractors instead of caring about the development of your project.
Overlooking the importance of the token utility is a last but not least fallacy that can lead to poor launch results.
Elaborating on token utility demands a certain amount of effort and time. It is something that can literally make or break your crypto project. For this reason, presenting your ideas about token utility to as many industry experts as possible may not be a good idea.
Instead, laying out the usability of the token and endowing it with attributes that reflect the project’s vision and align with the business model will give it value and recognition among the target community.
If you are a project that is just at the beginning of its crypto journey, ask yourself these questions:
- Do I know all the information I need?
- Under what conditions was this data collected?
- Am I seeing the entire picture or just a fraction of it?
The answers to these questions will help you to think critically about the data provided and consider the situation from all possible perspectives.
At Kaizen, we have launched more than 20 projects. Out of this, we know quite well what other obstacles a young crypto project might come across.
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