The Researcher’s Dilemma: Why I Gave Up on Analyzing Web3 Projects
The Question I Can No Longer Answer
It’s a question I get all the time from friends and followers: “What do you think of this project?” or “Is this a good time to invest in that sector?” A few years ago, I would have launched into a detailed analysis. Today, I often find myself at a loss for words. My career as a writer in this space began with deep-dive research into Web3 projects and protocols. But over time, I’ve written fewer and fewer of those pieces. This isn’t because I’ve lost interest in Web3; it’s because the game has fundamentally changed.
My perspective has evolved, allowing me to see the higher-level mechanics of the crypto world. But more importantly, the very nature of project analysis has been turned on its head. This is my attempt to explain the core reasons behind my shift—a journey that led me to understand why I gave up on analyzing
The Great Deception: How AI Killed Authentic Research
Back in 2018 and 2019, the landscape was different. My computer science background was a significant edge. I could sift through whitepapers and technical documentation to distinguish genuinely innovative projects from hollow cash grabs. The tech was the story, and understanding it was the key.
Fast forward to today, and that methodology is nearly obsolete. It’s not that blockchain technology has become too complex; it’s that project teams have become masters of deception, armed with a powerful new tool: Artificial Intelligence. With the latest large language models, any team can generate a flawless narrative. They can produce:
- Convincing Technical Whitepapers: Documents that sound revolutionary but are stitched together by an AI, full of buzzwords and empty promises.
- Pristine GitHub Repositories: Codebases that look active and robust but are largely AI-generated or forked with minor changes.
- Fake Community Engagement: On-chain transactions, social media interactions, and Discord activity can all be simulated with sophisticated AI-powered scripts.
The result is a polluted information ecosystem. Trying to find the truth is like wading through an ocean of AI-generated noise. The cost of genuine due diligence has skyrocketed, as you’re no longer just analyzing a project; you’re trying to outsmart an AI designed to fool you. It’s a losing battle for the independent researcher.
Playing Against a Stacked Deck: The Industrialization of Crypto
In the early days, discovering a hidden gem through public research was a viable path to significant returns. The industry felt more organic, and good projects could rise on their own merit. That era is over. Web3 has matured into a highly efficient, industrialized pipeline.
Today, a typical project lifecycle is managed by a series of specialized entities:
- Incubators & VCs: Provide initial funding and strategic guidance.
- Marketing Agencies: Craft the narrative and build initial hype.
- Launchpads & Exchanges: Facilitate the token generation event (TGE) and provide liquidity.
- Market Makers: Professionally manage the token’s price action post-launch.
As an outsider relying solely on public information, you are playing against a stacked deck. The key information—token vesting schedules for insiders, market-making strategies, and partnership deals—is never public. By the time you hear about a project, the insiders are already positioned, waiting for retail liquidity.
Good Tech, Bad Token: The Fundamental Flaw in Web3 Investing
Here lies one of the most painful truths of the current market: a project’s technical quality has almost no correlation with its token’s price performance.
In most Web3 ventures, the development team and the operations/market-making team are entirely separate entities. The tech geeks might be genuinely building something brilliant, but they don’t control the token. The market-making rights are often sold or outsourced to a professional firm whose only goal is to maximize profit from the token’s volatility.
This leads to a bizarre and counterintuitive phenomenon. A project announces a major technological breakthrough or a successful mainnet launch. What happens to the price? It dumps. Why? Because the market makers use the positive news as the perfect opportunity to generate hype and sell their tokens into the resulting retail buying pressure. Good news becomes exit liquidity.
This complete disconnect is why answering “Is this project good?” is so difficult. The tech might be fantastic, but the token could still be designed to drain value from public investors.
When Hype Trumps Substance: The Triumph of Meme Culture
The final nail in the coffin for fundamental analysis has been the absolute dominance of meme culture. In a market where a coin featuring a cartoon animal can achieve a multi-billion dollar valuation overnight, what is the incentive to spend months building a complex DeFi protocol?
The market consensus has shifted. Most participants are not here to support a technological revolution; they are here to make money, quickly. Traffic, narrative, and emotional resonance have become the only metrics that matter. A project with a strong community and a viral meme will almost always outperform a project with superior technology but a boring story.
When the entire market agrees that the goal is speculation, not innovation, spending weeks researching a project’s fundamentals becomes a pointless, academic exercise. You’re bringing a calculator to a casino.
Beyond the Whitepaper: Redefining “Understanding” in Crypto
This journey has given me a new appreciation for Warren Buffett’s timeless advice: “Never invest in a business you cannot understand.”
I used to think “understanding” in Web3 meant grasping the tokenomics, the consensus mechanism, and the use case. I now realize it means something far deeper. To truly understand a Web3 project, you must understand:
- The underlying capital structure and who the early investors are.
- The incentives and interest games being played by the team, VCs, and market makers.
- The raw, unpredictable forces of human psychology and market emotion.
These are things you will never find in a whitepaper or a Discord channel. While I no longer believe public research is a path to profit, it’s not worthless. It has immense value in broadening your knowledge and, most importantly, helping you identify and avoid the most obvious scams.
However, if your goal is profit, the path has changed. The simple days of finding the next 100x gem through diligent research are gone. The new game is about understanding capital flows, narratives, and the very human dynamics that drive this wild, unpredictable market.
