Evaluating new projects to pay attention to or invest in can be quite difficult in DeFi given the fact that there’s a new one that launches pretty much every day. Though, there are always diamonds in the rough and I believe that Monsoonie encapsulates it well below by basically stating that focusing on the team behind the project is probably the most critically important thing you can do.
If we head down the list of the top DeFi projects (as measured by TVL), we can see this thesis playing out perfectly. Maker, Aave, Uniswap, Compound and Synthetix all sit in the top 5 and there’s no debate about how strong these teams are. All of them have created products that are loved by tens of thousands of users and some of them, like Uniswap, are even now beating incumbents like centralized exchanges. On top of this, all of these teams have weathered the 2018/2019 bear market and literally been apart of creating the DeFi ecosystem we know and love today.
Now, of course, you might be thinking that no matter how great the team is if the product doesn’t have market fit then it won’t matter. Well, this speaks to Monsoonie’s core point where they mentioned that a really great team can actually pivot to a better product if they discover their current offering is not working out. This sort of thing plays out in the traditional startup world all of the time but we haven’t seen too much of this in DeFi just yet - I think this is simply because we’re still really early.
On that note, think about all of the different projects that have been written off as dead recently only to reemerge later. A perfect example here is SushiSwap - it had an extremely hyped up launch full of both excitement and drama but then that all faded and everyone thought the project was dead. Fast forward 2-3 months and SushiSwap is back with TVL and volume that is now challenging Uniswap. You may be wondering, how did this happen? Well, the SushiSwap team (especially 0xMaki) are great, they ship products/features like crazy and have built a healthy and lasting community.
In saying all of this, I do think that amazing teams can still fail to build a great product for a variety of reasons but I also believe that a bad team rarely builds a great product. I also believe that in the Ethereum and DeFi ecosystem building a strong and lasting community will greatly increase a projects chance of success.
Have a great day everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.