Crypto Whitepapers: A Complete Overview

Crypto whitepapers are a great way to get an overview of projects. Although a simple concept they are essential for navigating the space. That is why in this article I will be covering all aspects of whitepapers. So without further ado, let’s jump right in.

What are crypto whitepapers?

Crypto whitepapers are documents created by projects before launch. Essentially, they provide a detailed overview. This includes technical details, roadmaps, and the vision of the project. In most cases, they are used to attract investors.

What information is included in crypto whitepapers?

Tokenomics – this details the total supply of the cryptocurrency. As well as the circulating supply and the inflation rate. This is important for investors as it can be used to determine selling pressure and how democratic the distribution is.

Technical details – the details of the underlying technology are documented in all whitepapers. This usually includes an in-depth explanation of the smart contract.

Purpose – a whitepaper outlines the project goals and how it differentiates itself from other projects. This could be insights into the utility of the project. This includes the functionality and what problems it solves. For instance, DeFi tokens may provide the ability to govern the protocol. The purpose of this goal is to provide a more democratic development process.

Project team – a detailed breakdown of the project team is laid out. This includes roles and responsibilities. In the crypto whitepapers, teams are either public or anonymous. Therefore, this is something to keep in mind.

Roadmap – this is a high-level visual representation of the future development of a project. They provide goals and timelines. In turn, it serves as a measurement of success and it provides important insights which are used both internally and by investors. To learn more about roadmaps, click here to read my previous article.

What makes a good crypto whitepaper?

Direct communication – whitepapers are great resources to garner attention towards a project. Therefore, they should be easy to understand and be accompanied by diagrams and relevant statistics. This will ultimately persuade investors and other interested parties.

Public team – as mentioned previously oftentimes cryptocurrency teams are anonymous. This can be a red flag if stated in the whitepaper as they are rarely held accountable if something goes wrong. Therefore, if the team is public the better.

Clear deadlines – while some degree of flexibility is important to allow teams to adjust, a hard deadline stops the developers from moving the goalpost. This ultimately holds them accountable if they miss their deadlines.

Moreover, it manages investors’ expectations. If there is an ambiguous deadline that gets shifted this may result in a loss of faith by investors.

Originality and great problem solving – for the project to succeed it needs to differentiate itself from the competition. If the whitepaper is original by providing a new problem-solving solution then this is a great sign.

The best crypto whitepaper

The Bitcoin whitepaper is the most notable whitepaper and rightfully so. Published by the anonymous founder Satoshi Nakamoto in 2008 it provided a great overview of the project.

Firstly, it outlined the goal of the project which was to be a decentralized digital payment system. Secondly, it detailed the technology that supported it. In essence, it would utilize blockchain technology. This novel technology was essentially an online database secured by a decentralized network of computers.

Thirdly, it detailed some of the benefits the project would bring and how it differentiated itself from the competition. For instance, bitcoin removes third parties and allows a truly permissionless experience. Moreover, Satoshi wrote that it would solve the double spend problem as transactions were immutable and therefore cannot be changed.

Overall, the bitcoin whitepaper is a great example of what a whitepaper should be and to this day has been a great influence on the cryptocurrency space.

Conclusion

As you can see, whitepapers are a great way for investors to get an overview of upcoming projects. They provide the goals of the project and the technical specifications behind it.

Therefore, if you use the tips in this article to find good whitepapers you can gain an edge on the market. I hope you found this article useful and thanks for reading.

Want to learn about algorithmic stablecoins? Click here to read my previous article.