Other Due Diligence

While we try to filter listed tokens you should always conduct some level of due diligence yourself on tokens you plan to buy or hold

Due diligence takes many forms but as a starting point we recommend the following.

  • Read as much content as possible about a token and project including white papers if they exist or information on the project website

  • Look at the team behind the project. Do they have a history of good projects or bad projects?

  • If you're technical then look at the project's source control system. How actively maintained is the project?

  • Look at the projects community, are there real people in the community or is it all bots?

  • Talk to people you know and trust for their views on a project

  • Ask about the tokens in the Discord channels or Telegram groups

  • Consider using third party evaluation services such as Capital Pilot.

We are also looking at how we can in a decentralized way create risk scores for tokens. Managing risk is important when making any kind of investment and so we hope to assist with this through new decentralized ways to evaluate and risk score tokens.

Developing a strategy

In this section we pull together posts and links to help people new to DeFi to understand to start out developing a personal investment strategy.

The information presented here should not be considered financial advice. We are seeking community members willing to create new guides that can help with education for people new to Symmetric.

Evaluating pools

The information presented here should not be considered financial advice.

Most investors don't create new pools but focus on looking through the pools that exist and choosing which pools provide the best returns and the highest level of safety.

Modern investing is a data driven process. Thankfully there are many data points we can use.

Symmetric provides a number of data points that can assist with this evaluation process.

Within each pool you are able to view charts showing liquidity, trade volume and fee returns over time.

In the liquidity view you can see the change in liquidity within a pool over time. Sudden falls or rises in liquidity indicate at least one member moving large amounts of liquidity which could be an indication of a user moving to a better pool or jumping into a high value pool.

The trade volume view shows the amount of trade being carried out on the pool. Higher volumes mean more swaps against the pool which leads to higher fee volumes for liquidity providers. You may want to look for higher volume pools to add liquidity to.

The fee returns tab shows the fees being made by the pool. This is often one of the most viewed charts since it presents how much in fees a pool is creating.

Another useful data point is the number of swaps being made on a pool and the swap directions. A pool with large numbers of swaps for higher amounts creating higher fees will be popular. But this needs to be considered over time depending on your short term and long term strategy.

You can also see the individual holders within a pool which helps to identify pools with diverse numbers of liquidity providers. A pool with a broad number of liquidity providers that share pool liquidity helps to protect against large liquidity moves if one person leaves a pool.

Diving deeper

While these data points are valuable for creating your strategy there are many levels more that you can go into.

You could look at individual holders, identify which other pools they are part of and from that, wallets with a good track record. You can learn from these wallets and use that learning as part of your own education and investment strategy.

There are also third party sites that allow visualisation of addresses and tokens. One of the best things you can do is drill deep into a token to understand its purpose, its performance and whether you believe in its short term or long term performance. This is no different to looking at a company stock and determining how you expect it to perform in the future.

We are also aiming to develop new tools to help with this visualisation and planning.

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