Is there an allocation for founders?

Sometimes, founders will allocate themselves a certain amount of the cryptocurrency before launching the project. If there is a founders’ allocation, be sure to check if there is a vesting period. A vesting period means the founders have agreed to lock up their initial allocation for a period of time (usually a few years), to prevent anyone selling their allocation during that time. This shows that the founders have confidence in the project.

Preventing founders from dumping their allocation at launch also stabilises the market — if a founder sells off a large chunk of cryptocurrency at once, this can destabilise the market. A vesting period helps to prevent this.

Is there a dev fee or ongoing founders reward?

Check if the project has implemented a development fee or ongoing founders’ reward. This information, along with the rationale behind it, should be included in the project’s whitepaper (see Whitepaper section below).

Were funding soft caps and hard caps reached?

A soft cap is the minimum funding goal the project wants to reach in order to be able to complete their stated mission. A hard cap is the maximum goal the project intends to reach. If the project failed to meet their soft cap — or allowed themselves to exceed their hard cap — this may be indicative of deeper budgeting issues.

Having too much funding might not sound like an issue, but both soft and hard caps should be carefully planned. Both failing to meet a soft cap and exceeding a hard cap can indicate that the project may fail to adhere to other aspects of their plan.