DISCLAIMER
This analysis is provided for informational and educational purposes only and does not constitute financial advice, investment recommendation, or solicitation to buy or sell any securities or digital assets.
This analysis focuses on structural and systemic risk factors, not expected returns or token price performance.
The author may hold positions in assets discussed. All information is based on publicly available sources and may contain errors or become outdated.
Readers should conduct independent research and consult qualified financial, legal, and tax advisors before making any decisions. Digital assets carry substantial risk, including the potential loss of capital.
Past performance does not guarantee future results.
1. Why most crypto projects fail before they even become “deals”
Most crypto projects don’t fail during execution.
They fail before they are even investable.
a) A normalized scam (or approximation) culture
Let’s be honest: parts of the crypto ecosystem have normalized behaviors that would be unacceptable elsewhere:
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vague promises
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unrealistic roadmaps
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unverifiable metrics
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heavy storytelling with little substance
Even without malicious intent, this culture kills trust upstream.
As a result, many projects are disqualified before any serious analysis happens.
b) The buzzword trap (crypto, AI, RWA…)
Launching a project labeled “crypto” or “AI” automatically attracts investors sensitive to the narrative.
But buzzwords don’t create markets.
Just like in traditional businesses:
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no clear pain point
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no critical problem being solved
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a “nice-to-have” product instead of a “must-have”
👉 If the project is a gadget or a cosmetic layer, there is no deal, regardless of the story.
c) Poor technological choices from day one
Many founders:
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choose a stack because it’s trendy
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over-engineer without necessity
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or build infrastructure that is neither scalable nor maintainable
Early technical decisions compound fast.
A bad initial architecture is very hard to fix and immediately raises red flags for experienced investors.
2. Why deals collapse before due diligence
This is where most misunderstandings happen.
Most crypto deals don’t fail during due diligence.
They fail before anyone agrees to start one.
a) What types of deals are actually on the table?
In crypto, as elsewhere:
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early-stage or growth investments
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acquisitions
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strategic minority stakes
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secondary transactions
Due diligence only happens after interest has already been established.
b) What due diligence really is
It’s not just:
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reviewing financials
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auditing the tech
It also means:
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understanding revenue dependency on the founder
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assessing operational robustness
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evaluating long-term coherence
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testing execution capacity
But first, the project has to earn the right to be analyzed.
c) Why it breaks before that stage
In most cases, the failure is strategic and human, not technical.
Common reasons:
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Weak or confusing pitch
The founder cannot clearly explain:-
what is being built
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why now
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why they are the right team
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Vision too small or too scattered
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too many products
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too many directions
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no clear priority
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No credible trajectory
No clear 12–24 month path, only intentions. -
Poor founder signal
Even with a decent idea, investors don’t feel execution strength.
👉 Result:
The deal dies before due diligence, because no one wants to spend time analyzing something poorly framed.
3. Conclusion
Most crypto deals don’t fail because of regulation, markets, or technology.
They fail because:
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the project isn’t fundamentally necessary
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the vision is unclear or poorly articulated
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the founder doesn’t trigger trust
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execution credibility is missing
Due diligence is not a starting point.
It is a privilege reserved for projects that have already passed all the invisible filters before it.