#plasma $XPL # How to Evaluate Crypto Projects: A Due Diligence Framework

Before investing in any cryptocurrency project, including emerging tokens like XPL, smart investors ask critical questions. Here's what matters:

## Core Questions to Answer

**What problem does it solve?** Legitimate projects address real-world inefficiencies. Does the token have genuine utility, or is it purely speculative? Look for clear use cases beyond "number go up."

**Who's behind it?** Research the team's track record. Are founders public and accountable? Have they built successful projects before? Anonymous teams carry higher risk.

**How does it work?** Understand the tokenomics: total supply, distribution, vesting schedules, and whether insiders hold massive amounts that could be dumped on retail investors.

**Is it audited?** Security audits from reputable firms (CertiK, Trail of Bits, OpenZeppelin) reveal whether smart contracts have vulnerabilities that could lead to exploits or rug pulls.

**What's the community saying?** Check multiple sources: official channels, independent crypto forums, and critics. Cult-like communities that attack skeptics are red flags.

## Risk Awareness

Cryptocurrency investments can lose 100% of their value. Regulatory crackdowns, technical failures, market manipulation, and founder exits are real risks. Never invest more than you can afford to lose completely.

**Do your own research. No social media post, influencer endorsement, or persuasive article should replace thorough due diligence and professional financial advice.**@Plasma