Most crypto due diligence advice boils down to "do your own research" without saying what that research actually involves. Here's a concrete checklist covering the areas that matter most, in the order worth checking them.

1. Team and track record

Is the team public and identifiable, or fully anonymous? Anonymous teams aren't automatically disqualifying — some legitimate, long-running projects have anonymous founders — but it removes a layer of accountability, and it's worth weighing that trade-off explicitly rather than ignoring it. Where the team is public, check their actual track record on prior projects, not just their stated credentials.

2. Tokenomics and supply

What's the total and circulating supply, and how much is allocated to the team, investors, and treasury versus the public? Check the vesting schedule for large allocations — our guide to token unlocks covers why upcoming unlock dates matter for future sell pressure.

3. Smart contract audits

Has the protocol been audited by a reputable third-party security firm, and are the audit reports publicly available rather than just referenced? An audit doesn't guarantee safety — audited protocols have still been exploited — but a project with no audit at all, handling meaningful user funds, is a materially higher-risk proposition.

4. Actual usage versus stated usage

Marketing claims about adoption are easy to make. On-chain data — active addresses, transaction volume, total value locked, real usage of the specific feature being promoted — is harder to fake and worth checking directly against the project's own claims.

5. Treasury and financial transparency

Is the project's treasury visible on-chain, and is there any regular reporting on how funds are being used? Opacity here isn't automatically a red flag for very early projects, but it becomes one for projects that have raised significant funding and offer no visibility into spending.

6. Community and communication quality

Does the team communicate clearly about setbacks and delays, or only about good news? A community that tolerates no criticism or dissent, and a team that only ever reports positive updates, is a weaker signal than a project that's transparent about problems as they arise.

7. What happens if it fails

Before getting involved, it's worth being explicit with yourself about what a total loss scenario looks like, and whether you're comfortable with that outcome given the position size. This isn't a project-specific checklist item — it's a discipline that applies regardless of how well a project scores on everything above.