Four Key Points for Screening Potential Alts in 2025

The bullish atmosphere in the crypto market seems to have returned, at least recently. In this situation, investors naturally wonder: which alts can bring excess returns?

Unlike the explosive growth of almost all alts during the bull market of 2021, obtaining excess returns in the current market environment requires more careful selection. Considering that there are already millions of new alts in the market, it becomes particularly important to carefully choose investment targets.

This article will share some key points for filtering crypto projects for reference.

1. Narrative Heat and User Perception

Looking back at the best-performing tokens over the past 12 months, such as HYPE, VIRTUAL, and some popular meme coins, we find that they do not all possess strong fundamentals. However, these outstanding tokens share a common trait: they have extremely high user awareness on social media and a loyal group of fans who continuously promote them on social platforms.

In addition, most of the outstanding tokens are closely related to strong market narratives. For example, Virtual continued to rise during the peak of the artificial intelligence concept, while meme coins surged in the fourth quarter of 2024 to early 2025 due to the popularity of internet memes.

It is recommended to pay attention to the current popular narratives and look for tokens with highly active communities on social platforms.

2. Growth Metrics

Although market sentiment often outweighs fundamentals in a bull market, some projects manage to balance high attention and product-market fit. Such projects can be excellent investment opportunities, especially when their key metrics show explosive growth.

For example, the stablecoin protocol Ethena has seen a total locked value of (TVL) increase by 50% in the last 30 days, while gaining significant attention from users and analysts on social media platforms. As a result, its token ENA has risen by 154% over the past month.

Investing in projects that are in the early stages, with continuously growing data metrics (such as TVL, revenue, transaction fees, etc.) and a certain level of community buzz, may yield substantial returns. Tools like DeFiLlama can be used to discover the fastest-growing projects.

3. Reasonable Token Economics

For medium to long-term investment, understanding token economics is crucial. Taking the TIA token as an example, it has plummeted over 90% in the past 17 months, mainly due to large-scale sell-offs by early investors after each token unlock.

When studying token economics, it is important to pay attention to the following points:

• Token Unlocking Plan: Ideally, the circulating supply should reach at least 30%, and the annual token release amount (i.e., inflation rate) should not exceed 20%-35%. Avoid purchasing tokens that have a large-scale unlocking in the near future (e.g., exceeding 20% of the current circulating supply).

• Token Utility: Consider whether the token will benefit from the success of the protocol and why someone would be willing to buy it at a higher price. Dividend mechanisms or token buyback plans are better options.

Although strong token utility is an advantage, it is not absolutely necessary. There are also some tokens with lower utility that perform well in the market.

4. Community First

Currently, projects that focus on community development are more popular than ever. More and more investors tend to support teams that genuinely care about the community, rather than vague and unappealing projects.

The characteristics of community-first projects include:

• Conduct large-scale airdrops
• The team focuses on delivering on promises
• The team actively participates in marketing, remains active on social platforms, and engages with the community.
• Allocate a large proportion of the token supply to the community

In addition to the factors mentioned above, upcoming significant positive events may also drive up token prices, such as protocol upgrades, improvements to token economic models, or the release of new products that can significantly increase project revenue.

However, even high-quality assets can lead to investment failure if the purchase price is too high. Therefore, it is crucial to patiently wait for the right timing to invest and avoid blindly chasing after price increases.