Taking LFT as an example, how to properly evaluate altcoins and invest?
TechFlow Selected TechFlow Selected
Taking LFT as an example, how to properly evaluate altcoins and invest?
In cryptocurrency, the key to "success" is developing skills and building your own investment theory.
Navigating Web3 tides with focused insightsAuthor: Kamikaz
Translation: TechFlow intern
The key to "success" in cryptocurrency is developing skills and building your own investment thesis. As a case study, I’ll examine the recently launched Lend Flare token: LFT.
TL;DR — Key factors for evaluating an altcoin:
Tokenomics
Liquidity
Narrative
Catalyst
You need to build a strong thesis for any coin you want to buy and remain flexible with market conditions. Most importantly, invest small amounts and maintain conviction.
Now, let’s dive in. In crypto, you have several options:
BTC/ETH – Safe holdings, but hard to generate high returns
Other blue chips – Professionals have a significant edge
Meme coins – Gambling, like slot machines
NFTs – Not well understood; can’t offer advice
New projects – Effort pays off
growing your portfolio
Once you’ve discovered a new project, here’s what you should do first:
1. Tokenomics
You must clearly understand the project’s tokenomics. Even the best protocol can be a poor investment if its tokenomics are unfavorable. Alchemix might be an unfortunate example—an incredible project in DeFi, yet its price chart continues to decline.
When evaluating altcoin tokenomics, focus on these aspects:
Circulating supply
Daily sell pressure
Vesting schedule for locked tokens
Special mechanisms (fee accruals, staking, ve-Tokenomics, etc.)
Below is an analysis example using LFT.
For LFT, the initial supply was 450 million, all sold at the same price during the IDO (no VC or seed round). There is a daily emission of 700,000 tokens as rewards for liquidity providers. In the worst-case scenario, assume all daily emissions are sold by LPs. For other tokens, check whether they are locked and when those locks expire—this tells you when supply will hit the market and create sell pressure. For LFT, tokens are released linearly over 1–2 years, so only a small amount unlocks each day.
Therefore, with LFT, you know that holders acquired tokens at a fixed price (so no VCs are waiting to dump at 5x), and only 700,000 tokens are released daily (plus minor unlocks). Multiply this by the current price to estimate daily sell pressure. On any given day, if buying > selling, the price will rise.
A more advanced exercise is calculating the average cost basis of current holders. For example, if a coin started at $1 and now trades at $2, you might think holders have doubled. But it’s not that simple...
If there has been high cumulative trading volume, actual holders may have an average cost closer to $2. As early buyers exit, new ones enter at higher prices. Thus, even with price appreciation, relatively few holders may be willing to sell.
Regarding special mechanisms, determine whether incentives exist for holders to retain tokens despite rising prices. For instance, LFT holders can lock their tokens for 1–4 years to earn protocol fees and boost APY from providing liquidity—this reduces sell pressure from existing holders.
2. Liquidity
For any token, you must know how much liquidity exists in DEX pools. Low liquidity deters whales, who cannot efficiently enter or exit large positions. If you had $500 in your wallet, would you bother earning just 10 cents? Of course not.
For LFT, the Uniswap pool has $7.1 million in ETH. This allows whales to buy hundreds of thousands of dollars without significantly impacting the price. DEX liquidity is the lifeline of new altcoins—high liquidity makes a token more attractive to a broader audience, increasing buying power.
3. Narrative
How does the token fit into the bigger picture? In traditional markets, investors seek exposure to trending themes: 5G networks, IoT devices, social media, SaaS, etc. Crypto is no different: Curve Wars, Layer 1 blockchains, DeFi 2.0, etc.
LFT Story 1 – Curve Wars. Lend Flare enables users to borrow against their Curve LP positions, allowing stablecoins to earn yield while also borrowing funds for other uses. It's a natural innovation built on Curve—a hot topic.
Additionally, LFT borrowing positions cannot be liquidated. Protection against liquidation is a major differentiator from competitors and avoids depegging risks. As Curve becomes the savings account of crypto, LFT unlocks new liquidity.
LFT Story 2 – Chinese DeFi. LFT is one of the first innovative DeFi projects with a Chinese development team, drawing strong interest from Chinese crypto holders. So far, DeFi has been heavily English- and West-centric. A new market means a new source of buying power.
LFT Story 3 – ve-Tokenomics. LFT allows holders to lock their tokens for up to 4 years. ve-lockers receive half of the protocol fees and enhanced APY for providing liquidity. ve-Tokenomics is a recently popular concept in DeFi.
4. Catalyst
What upcoming events could spark interest? Every day brings a busy news cycle; we live in an “attention economy,” where attention is extremely valuable. If your project isn’t making headlines, it will struggle to capture the attention of crypto participants.
LFT is the first project enabling borrowing against Curve LP positions, but it's still relatively unknown. However, a highly anticipated competitor is about to launch: Curvance. Curvance comes from an all-star dev team but with different design choices.
As Curvance approaches launch, attention will naturally shift toward LFT as a clear relative-value play. If Curvance debuts at a $250 million valuation, crypto investors will seize the chance to buy LFT—a similarly featured competitor—with a $10 million market cap.
Each token presents a unique puzzle—and that’s what makes it fun! Some tokens will have incredible tokenomics, like self-reinforcing flywheels that automatically lock value. Others will rely on compelling narratives to attract broad community interest and attention.
Your goal is to develop the skills to understand the strengths and weaknesses of new projects and their tokens. Don’t just follow tips and copy trades—develop independence so you can spot great opportunities before others do.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
