What is Whitepaper in Crypto?
A white paper is an informational resource created by a business or non-profit organization to introduce the benefits of products, solutions or services that the company or organization produces. White papers are frequently created for businesses marketing objectives. The white paper can give business partners an in-depth document on certain products and services to their partners.
In crypto space, a white paper is a document created by the crypto project’s team or developers that contains important information. It often explains the project’s concept, technology, goals and roadmap. In crypto space, a comprehensive whitepaper represents a trustworthy and legitimate project. The material for crypto whitepaper documents will be methodical, organized and understandable by the readers.
In the world of business we know the importance of business proposals. This proposal usually contains important information regarding the products and services the business produces. This business proposal also serves as a marketing tool to attract deals from investors or partners to the projects the business’ working on or complete products.
Before submitting the business proposal to investors or partners candidates, a business needs to provide comprehensive information about their businesses. This source of information or document is called the white paper. The white paper provides information regarding in-depth analysis of a particular product or service. It will include research, data, and innovative insights on the matter. It is not used to make decisions or attract investors like business proposals does, however it is benefitted readers about the business.
In the cryptocurrency world, a whitepaper serves as a source of information for a project, it provides details about the teams, technologies, tokenomics and many other pieces of information. White Papers are customizable, the creator has the flexibility to choose the information they want to include about the project. However, tt is essentially an overview of the project and serves as a starting point for those researching a specific project.
For cryptocurrency projects, whitepaper is viewed as business strategies. It gives investors a thorough project overview. On the other hand, whitepaper typically made public before its cryptocurrency project launch. Therefore, whitepaper serves as a good place to start for a crypto project to describe the purpose and direction of its idea.
What Information Can Be Found in Crypto Whitepaper?
Whitepaper is a great source of information about crypto projects, demonstrating their real world utilities. It also gives insight on how the project can help to solve a specific problem.
Here’s some important details about cryptocurrencies whitepaper investors and researchers should take note of:
1. Introduction about Technologies and Technical Details
An introduction to the project and the underlying technology should be made clear in a crypto whitepaper in simple and thorough terms. It explains the importance of the technology and technical aspect behind its technology and how it will impact the crypto and blockchain industry, or even beyond the crypto industries.
2. The Project’s Team
It is important to know who is behind certain cryptocurrency’s projects. Investors and researchers need to thoroughly investigate the crypto project’s team and developer members. It is critical to pay attention to their background, prior performance, track records and their roles or expertise on current projects.
Also note that certain projects’ teams are anonymous and do not share their real identity to the public. It is important to exercise caution before investing in this team’s crypto projects.
3. Project’s Tokenomics
Tokenomics determines how tokens are distributed which affects supply and demand that will affect its future projects token value. The important aspects of tokenomics are initial token distribution and allocation, mining or staking yields, token burn mechanism, inflationary or deflationary token supply and any lockup or vesting periods. Tokenomics is a core part in deciding how a token will perform against real world currencies or Bitcoin.
4. Market Analysis and Solutions
An analysis of the current market and the potential effects that the project might cause, should be explained in the whitepaper. It should describe the project’s competitive advantages and how it can set itself apart from its competitors or similar crypto projects. The whitepaper also should identify and propose a solution that will address the core problem that the project tries to solve.
Lastly, the whitepaper should provide an outline of the project’s roadmap, including short-term and long-term goals, that the project needs to achieve with expected timelines. It also provides a clear vision of the project’s future development details.
Genuine Crypto Projects Whitepaper Characteristics:
|Clear systematic and detailed, no writing or grammatical errors while easy to understand|
|Credible teams and developers with relevant skills and experience|
|Innovative technology or concept that will provide solution to crypto industry or to the real world life|
|Fair tokenomics policy between the team, investor and communities|
|Provide regularly transparent information regarding project developments and its roadmap progression|
|Active social media accounts in accordance with account listed in the whitepaper|
Lightpaper is also known as litepaper in the crypto industry. As its name suggests, a litepaper is a lighter version of crypto projects whitepaper. Which is easier to understand and displays shorter and denser information.
A whitepaper should give investors an overall sense of the project’s goals and objectives. However, whitepapers are not being regulated, and practically can be written by anyone. It is important to analyze certain project whitepaper thoroughly to ensure its project’s credibility and reliability.
One of the most famous cryptocurrency whitepapers is Bitcoin: A Peer-to-Peer Electronic Cash System, which was published by Satoshi Nakamoto in 2008. Another famous whitepaper is “The Ethereum Whitepaper” by Vitalik Buterin that describes technical specifications for the Ethereum network.
Basically a whitepaper should provide an understanding of the cryptocurrency project plans of how and what they do. Anyone can practically create their own whitepaper and as they are not regulated, so if you are interested in a certain project, it is important to analyze their whitepaper very carefully.