The Strength of a Cryptocurrency\'s Community Should Be a Key Investment Consideration

In the crypto industry, strong communities make strong projects. Communities form the backbone of success and innovation

Cryptocurrency tokens or projects that place a premium on fostering a robust community tend to fare better in the long run.

In the cryptocurrency realm, strong communities are the lifeblood of successful projects. They play a pivotal role in the development process by testing products, providing feedback, and highlighting areas for improvement. Additionally, they serve as the most effective advocates for crypto projects, promoting them extensively on social media and beyond.

This has been instrumental in the organic growth of successful projects such as Bitcoin, Ethereum, Dogecoin, and popular DeFi protocols like Uniswap, Curve, MakerDAO, and COTI. All of these projects share one common trait: a large and highly engaged community that influences their next steps.

The most successful crypto projects will create decentralized governance mechanisms to ask their communities what new features and capabilities they need or how their treasury funds should be spent. By creating a decentralized autonomous organization (DAO), the community can vote on these proposals, helping to drive the project forward through democratic consensus.

Crypto’s Community Power

Few projects better illustrate the importance of a strong community than Dogecoin, which began in 2013 as a simple joke based on a popular internet meme but has since grown to consistently rank in the top 50 most valuable coins by market cap. The Dogecoin community is among the most passionate in the industry, with its Redditors famously using the phrase “1 DOGE = 1 DOGE” to promote the token as a viable currency for day-to-day transactions. Those efforts got the attention of none other than Elon Musk, who decided to accept Dogecoin payments at Tesla.

The efforts of the Dogecoin community led to a series of viral TikTok videos in 2021 that helped the value of DOGE gain more than 30%, and it has attracted numerous developers who keep the currency alive, even though none of its original creators remain involved.

In the DeFi industry, several projects have used Dogecoin’s community as a model for their own. COTI, an Ethereum-based project aiming to become the “currency of the internet,” has managed to foster the growth of a 300,000-strong community across channels like X and Telegram, which plays a pivotal role in its development. The COTI community was directly responsible for proposing an expansion of its original mission, leading to the creation of the VIPER Wallet in 2020, followed by the COTI Treasury, which came online in 2022.

COTI is now giving back to its community by launching a new Creators program. This program will reward community members who create content that can contribute to yet more community growth. It’s focused on creating “high-impact content creation,” offering both grants and rewards for creators who need funding to get started.

No Community? No Future

Alan Chiu, CEO of Boba Network and Enya, highlighted the importance of a strong community in an interview with Capital.com. Asked why so many crypto projects fail to live up to their billing and ultimately become worthless, he explained that one of the main reasons is that they either neglect or fail to create a strong community as the foundation of their products.

“We work in an open-source ecosystem, so you have to listen to users and build on an ethos that people can rally around,” Chiu said. “Often projects fail not because their technology doesn’t work, but because they haven’t galvanized a community that cares about their mission.”

Some crypto projects attempt to mislead investors by creating the impression of a strong community. For instance, it’s relatively inexpensive to add thousands of so-called social media “followers” simply by paying for an army of bot accounts. Some also try paying celebrities to vouch for their project, but these initiatives rarely result in passionate supporters joining the community because they’re well aware of what a paid promotion is.

A fake community will not help the project’s long-term growth. In crypto, the community provides any given project with its primary source of revenue, and if that community is not engaged or doesn’t really exist, the project will struggle to survive. No revenue means no development, no marketing, and eventually, no more projects.

The takeaway here is that anyone who is considering investing time or money, whether as a developer, investor, or something else, should first scope out the size and quality of its community.

News source：https://www.kdj.com/cryptocurrencies-news/articles/strength-cryptocurrency-community-key-investment-consideration.html

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