Crypto Due Diligence Checklist: 50-Point Evaluation Before You Invest
A comprehensive crypto due diligence checklist covering team, technology, tokenomics, security, community, and financials. Use this step-by-step framework before investing in any cryptocurrency project.
What You'll Learn
- 1Run the project overview check
- 2Verify the team and leadership
- 3Audit the technology and code
- 4Analyze tokenomics and supply
- 5Assess community and market position
- 6Make a risk-adjusted decision
Step-by-Step Guide
1Run the project overview check
Start with the basics: read the whitepaper, identify the problem being solved, confirm the project has a working product or credible roadmap, and verify it is listed on reputable data aggregators like CoinGecko.
If the whitepaper reads like a marketing brochure with no technical substance, treat it as a warning sign.
2Verify the team and leadership
Research founders and key team members. Check LinkedIn profiles, past projects, conference appearances, and whether they are publicly identifiable. Verify claims about experience and credentials.
Search for the team on YouTube conference talks. Real builders speak at industry events. Anonymous teams are not automatically scams, but they require higher standards on every other check.
3Audit the technology and code
Check GitHub for active development, security audits by reputable firms, and the technical architecture. Evaluate whether the technology is original or a fork with minimal changes.
A project with 3+ independent security audits from firms like Trail of Bits, OpenZeppelin, or Certik (combined with other auditors) shows commitment to security.
4Analyze tokenomics and supply
Map the complete token distribution, vesting schedules, emission rate, and unlock calendar. Calculate fully diluted valuation and identify any upcoming large unlocks that could create sell pressure.
Use Token Unlocks to track upcoming vesting events. A large unlock (5%+ of supply) within the next 3 months is a concrete sell-pressure risk.
5Assess community and market position
Evaluate the project's competitive position, community quality, exchange listings, liquidity depth, and partnerships. Compare with direct competitors on adoption metrics.
Check the bid-ask spread and order book depth on major exchanges. Thin liquidity means you may not be able to exit at your intended price.
6Make a risk-adjusted decision
Combine all findings into a clear investment thesis with explicit entry criteria, position size, and exit conditions. Document your reasoning so you can review it later.
If you cannot write a one-paragraph investment thesis explaining why this project is worth buying at the current price, you have not done enough research.
Before investing in any cryptocurrency, you need a systematic process to separate quality projects from the thousands that will fail. This checklist provides 50 specific items to verify, organized into six categories that map to Coira's STRICT scoring framework. Print it, bookmark it, and use it every time you consider a new investment.
This checklist is for educational purposes only. Cryptocurrency investments carry significant risk. No checklist guarantees a successful investment. Always invest only what you can afford to lose.
How to Use This Checklist
Score each item as Pass, Partial, or Fail. A project does not need to pass every single item, but consistent failures in one category should give you pause. As a general rule:
Category 1: Project Overview (8 Items)
This category assesses whether the project has a clear purpose and viable product.
- ✓The project has a published whitepaper or comprehensive technical documentation
- ✓The problem being solved is clearly defined and the addressable market is identifiable
- ✓Blockchain technology is necessary for the solution (not just added for token speculation)
- ✓A working product or mainnet exists (not just a testnet or promises)
- ✓The project is listed on CoinGecko or CoinMarketCap with verified data
- ✓The roadmap has specific milestones with dates, and past milestones were met
- ✓The project has been live for at least 6 months (longer is better)
- ✓There is a clear competitive advantage over similar projects
What to Look For
Detailed whitepaper with technical specifications, working product with real users, verifiable on-chain activity, roadmap milestones delivered on time, clear differentiation from competitors
Whitepaper is mostly marketing language, product is "coming soon" for months, no verifiable on-chain metrics, repeatedly missed deadlines, solution is a copy of existing projects with minor changes
Category 2: Team and Leadership (9 Items)
The team is often the single best predictor of whether a project will succeed or fail.
- ✓Founders are publicly identified with verifiable professional histories
- ✓Core team members have relevant technical experience in blockchain or the target industry
- ✓The team has previously shipped successful products (crypto or traditional)
- ✓Team size is appropriate for the project scope (at least 10+ for major protocols)
- ✓Key team members are working full-time on the project
- ✓The team communicates regularly through blog posts, AMAs, or development updates
- ✓Advisors are actively involved (not just lending their name)
- ✓There is no history of scams, failed exits, or legal issues involving team members
- ✓Team token allocations have reasonable vesting (3-4 year cliff and vesting)
How to Verify Team Claims
- LinkedIn: Check employment history, connections, and endorsements. Real professionals have multi-year profiles with genuine connections.
- GitHub: Look for personal repositories, contribution history, and open-source work.
- Conference appearances: Search YouTube for the founders speaking at events like Devcon, ETHDenver, or Consensus.
- Media coverage: Legitimate projects get covered by respected outlets (CoinDesk, The Block, Decrypt).
- Legal records: Search for lawsuits, SEC filings, or regulatory actions.
Some legitimate projects (like Bitcoin) have anonymous founders. If the team is anonymous, raise your standards on every other category. The code should be fully open-source, audited multiple times, governance should be decentralized, and the protocol should have a long operational track record.
Category 3: Technology and Security (9 Items)
Technical quality and security practices reveal how seriously a team takes its product and users' funds.
- ✓Source code is open-source and publicly accessible on GitHub
- ✓The project has been audited by at least 2 reputable security firms
- ✓Audit findings have been addressed and fixes verified
- ✓GitHub shows consistent development activity (weekly commits minimum)
- ✓Multiple developers contribute to the codebase (not a single-person project)
- ✓The project has a bug bounty program with meaningful rewards ($100K+)
- ✓Smart contracts use established standards and battle-tested libraries
- ✓The architecture documentation is clear and complete
- ✓There have been no critical unpatched vulnerabilities or exploits
Security Audit Evaluation
| Auditor | Reputation | What to Check | |---------|------------|---------------| | Trail of Bits | Top tier | Full audit report is publicly available | | OpenZeppelin | Top tier | Critical and high severity findings resolved | | Spearbit | Top tier | Timeframe of audit relative to current code | | Certik | Well known | Cross-reference with other auditors | | Halborn | Well known | Check scope coverage completeness |
Even audited protocols can be exploited. Euler Finance lost $197M despite multiple audits. Treat audits as a minimum requirement, not a safety guarantee. The quality of the audit, the scope covered, and whether findings were fixed all matter more than the auditor's name alone.
Category 4: Tokenomics and Financials (10 Items)
Poor tokenomics can destroy an otherwise excellent project. This is where many investors lose money.
- ✓The token has a clearly defined utility within the protocol (governance, staking, gas, access)
- ✓Total supply and max supply are clearly documented
- ✓Circulating supply is at least 40% of total supply (lower means future dilution risk)
- ✓Fully diluted valuation (FDV) is less than 5x the circulating market cap
- ✓Team and investor allocations combined are under 40% of total supply
- ✓Vesting schedules for insiders are 3+ years with cliff periods
- ✓No single wallet holds more than 10% of circulating supply (excluding protocol treasuries)
- ✓The inflation rate is documented and sustainable (under 10% annually)
- ✓The protocol generates revenue from sources other than token emissions
- ✓Treasury management is transparent with regular reporting
Financial Health Metrics
Revenue Metrics
Check Token Terminal for protocol revenue, annualized earnings, and price-to-sales ratio. Compare these figures against direct competitors in the same sector. Growing revenue quarter over quarter is the strongest fundamental signal.
Valuation Metrics
Compare market cap to TVL (for DeFi), revenue multiples, and user growth rates. A protocol with $100M TVL and $50M market cap is potentially undervalued compared to one with $100M TVL and $5B market cap.
Token Unlock Calendar
Major token unlocks can create significant sell pressure. Use Token Unlocks (token.unlocks.app) or CryptoRank to monitor upcoming events. If more than 5% of total supply unlocks in the next 3 months, factor that into your entry timing.
Category 5: Community and Ecosystem (8 Items)
A thriving community and growing ecosystem provide the demand side of the equation.
- ✓The project has an active developer community building applications on top of it
- ✓Governance proposals receive meaningful participation (1,000+ voters)
- ✓Discord/Telegram discussions focus on technology, not just price
- ✓Social media following shows organic growth (not bot-inflated)
- ✓The project has established partnerships with other reputable protocols
- ✓Ecosystem grants program exists to fund builders
- ✓Regular community calls or AMAs with transparent team communication
- ✓Media coverage from reputable crypto outlets (not just paid press releases)
Social Media Verification
| Platform | Healthy Signs | Bot Indicators | |----------|---------------|----------------| | Twitter/X | Replies discussing technical details | Generic "great project!" comments | | Discord | Technical support channels active | Same messages repeated by many accounts | | GitHub | Issues and PRs from external contributors | Only team members contributing | | Reddit | Detailed discussions with varied opinions | Echo chamber, all posts positive |
Use social analysis tools to check follower quality. A project with 500K Twitter followers but only 200 likes per post likely has bot-inflated numbers. Compare engagement rate (likes + replies / followers) across similar projects.
Category 6: Risk Assessment (6 Items)
The final category evaluates specific risks that could derail your investment.
- ✓The project is not currently under investigation by any regulatory body
- ✓Smart contracts are not upgradeable by a single admin key (or upgrade process is governed by DAO)
- ✓Liquidity is sufficient on major exchanges (under 1% slippage for your planned position)
- ✓The project does not depend on a single point of failure (one chain, one exchange, one team member)
- ✓No major token unlock events in the next 30 days exceeding 3% of circulating supply
- ✓The project's STRICT score on Coira is above your minimum threshold
Risk Assessment Matrix
| Risk Type | Low | Medium | High | |-----------|-----|--------|------| | Smart Contract | Multiple audits, 2+ years live | Single audit, 6-24 months live | Unaudited, new deployment | | Team | Public, proven track record | Public, limited track record | Anonymous, no history | | Regulatory | Compliant in major jurisdictions | Gray area, not yet addressed | Active investigation | | Liquidity | Top 100 by volume, deep books | Top 500, moderate depth | Thin liquidity, few exchanges | | Concentration | Top 10 wallets hold <30% | Top 10 hold 30-50% | Top 10 hold 50%+ |
Using the STRICT Score as a Cross-Reference
After completing your manual checklist, compare your findings with the project's STRICT score on Coira. The six checklist categories map directly to the STRICT pillars:
| Checklist Category | STRICT Pillar | What to Compare | |--------------------|---------------|-----------------| | Project Overview | Sustainability | Does the project have a viable long-term model? | | Team & Technology | Transparency | Is the project open and verifiable? | | Financials | Revenue | Does it generate real income? | | Technology | Innovation | Does it offer genuine technical value? | | Community | Community | Is the ecosystem growing organically? | | Tokenomics | Tokenomics | Is the token design sound? |
If your manual due diligence strongly disagrees with the STRICT score, dig deeper into the discrepancy. Either your research missed something, or the automated scoring may not capture recent developments. Both perspectives add value.
Decision Framework
After completing the checklist, use this framework to guide your decision:
Strong Pass (40+ of 50 items)
Project shows strength across most categories. Suitable for a core portfolio position. Apply standard position sizing for your risk tolerance.
Moderate Pass (30-39 items)
Fundamentals are decent with some weaknesses. Consider a smaller position size. Set clear invalidation criteria tied to the weak areas.
Weak Pass (20-29 items)
Multiple concerns across categories. If you invest, keep position size very small (under 2% of portfolio). Requires higher conviction on the items that do pass.
Fail (Under 20 items)
Too many red flags. The probability of loss outweighs potential gains. Move on to better opportunities.
Document Your Thesis
Before investing, write down:
- What you are buying and why (one paragraph maximum)
- Your target position size as a percentage of portfolio
- Entry criteria (price level, market conditions, or event triggers)
- Exit criteria (what would make you sell, both profit-taking and stop-loss)
- Review date (when you will re-evaluate the position)
- Key risks (the top 3 things that could go wrong)
Frequently Asked Questions
Frequently Asked Questions
How long should due diligence take?
Should I skip items if the project is well-known?
What if a project passes most items but fails badly on one category?
How do I check on-chain metrics without technical knowledge?
Is this checklist different for Bitcoin vs. altcoins?
Where does Coira's STRICT score fit into this process?
Printable Checklist Summary
Quick Reference: 50-Point Due Diligence
- Project Overview: 8 items (whitepaper, product, roadmap, market fit)
- Team & Leadership: 9 items (identity, experience, communication, vesting)
- Technology & Security: 9 items (open-source, audits, GitHub, bug bounty)
- Tokenomics & Financials: 10 items (supply, distribution, revenue, valuation)
- Community & Ecosystem: 8 items (developers, governance, partnerships, growth)
- Risk Assessment: 6 items (regulatory, liquidity, concentration, STRICT score)
Pass threshold: 40+ items for core positions, 30+ for smaller allocations
Ready to apply this checklist? Start by exploring Coira's crypto rankings to find projects with strong STRICT scores, then run them through the full 50-point evaluation. For a deeper look at fundamentals, read our How to Do Crypto Fundamental Analysis guide.
Congratulations!
You've completed this guide. Apply what you've learned and explore more resources below.
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