Early crypto gems: Five checks to spot real momentum before the crowd

Meta description: Discover how to identify real early crypto momentum with five checks—builders, usage, liquidity, token design, and security—before the crowd.

Being early means spotting real progress before others do: teams shipping useful code, users actively applying the product, and designs that won’t crumble at the first unlock or exploit. This guide distills five checks into a practical workflow for evaluating early crypto projects.

BUILDERS: WHO’S SHIPPING AND WHERE
Start with the people and the code. The clearest early signal is a team delivering visible updates in public: multiple active maintainers, frequent merges, tests and documentation that track new features. Outside validation matters too—grants, hackathons, and public showcases. Look for steady, not dramatic, progress and for work that’s actually shipped. Useful references include GitHub commit pace, developer reports, ETHGlobal showcases, and public grant records from programs like Optimism RetroPGF or Arbitrum.

USAGE: ARE REAL USERS DOING VALUABLE THINGS?
Once builders are confirmed, verify real usage. Two metrics matter: fees users pay to access the protocol and the revenue the protocol retains after compensation to participants like validators or liquidity providers. Use standard definitions from sources like Token Terminal to avoid mixing up fees with take rates. Look for rising fees per user and growing active wallets, with consistent daily or weekly usage. Be wary of spikes tied to incentives and compare with independent data.

LIQUIDITY: CAN YOU GET IN AND OUT WITHOUT MOVING THE MARKET?
Don’t rely on trading volume alone. Depth on the order book and stable spreads matter more than flashy numbers. Research from Kaiko suggests depth is a stronger signal than volume manipulation. Seek growing depth across multiple reputable venues and tight spreads during volatility. A red flag is liquidity concentrated in one pool or exchange or volumes that far outpace depth, signaling higher risk of slippage.

TOKEN DESIGN AND UNLOCKS: DON’T IGNORE THE SUPPLY CURVE
Token design often decides fate more than product fundamentals. A low float with a high fully diluted valuation (FDV) can set up a price drop when unlocks hit. Review the circulating supply today, unlock cliffs, and whether future releases may overwhelm liquidity. Strong projects publish clear, gradual unlocks with budgets for community and liquidity, not vague “ecosystem” pools that can be redirected without transparency.

SECURITY AND UPGRADE PATH: AUDITS AREN’T THE FINISH LINE
Audits help, but they’re not a guarantee. Check who performed them, what was examined, when it was done, and whether issues were resolved. Governance matters: can the code be upgraded, and who controls upgrades? Proxies, pause functions and admin keys are standard, but central control is risk. The best signs are multiple recent reviews, upgrades governed by timelocks and multisigs, and transparent bug history. These reduce risk but cannot eliminate it.

TRUST IN THE PROCESS
Treat “early” as a process, not a guess. Start with verifiable builders and code, confirm real usage through fee and revenue data, and verify liquidity in depth. When unlocks and governance checks look solid, you’ve earned the right to watch or take a measured position. Exercise discipline: set a simple gem-scan checklist, note assumptions, and size positions with counterparty risk in mind. FOMO rarely creates lasting value.