Metaverse Fundamental Report Workflow

The following is a detailed breakdown of the workflow of a high quality Rater.

Step 1: Report Selection/Creation

Follow the process for Creating & Submitting Reports to find a protocol and accurately create the document for your report. This is critical for successful submission, once your report has been finalized.

Step 2: Groundwork

Before you start reviewing, familiarize yourself with the project by using it and collecting written content you can find on the internet.

Create a list of all sources to explore when looking for details about the protocol. This can include Medium articles, social media posts, Discord chats which reveal information and maybe even your social network.

You can find examples of resources used in the Fundamental Report here:

Helpful Resources!

After you have the list, start populating the report.

Step 3: Value Proposition

The value proposition evaluates the unique selling point or in other words, the actual value the protocols brings to its users.

Novelty of the solution

• Was the project the first ever to provide this service?

• Did it introduce a technical or organisational innovation?

• Is it a fork with little innovation?

It can be helpful to understand their history. This can be found by looking at their website and medium. The first 3 articles can often prove exceptionally helpful. Additionally, pre-existing reviews and analyses from official sources can be used to find patterns. What information do you find repeatedly?

Ask critically if a) there is a meaningful technical innovation (e.g. such as the introduction of the AMM model by Uniswap) b) there is meaningful organisational innovation (i.e. development and implementation of Coordinape in Yearn).

Target market size

The target market size evaluates the current and future size of the problem a protocol aims to solve.

While the term Metaverse is all-encompassing, specify the size of the relevant target market size for the relevant sector. For example, NFT games are trying to disrupt the traditional gaming industry, which is reported to be worth roughly $175 billion.

Useful in this section is to differentiate between timeframes. Typical times frames within investing are:

• Short-term (0-1y): Evaluate current market demand

• Medium (1-5y): Evaluate if it grows within DeFi

• Long-term (5y+): Evaluate the demand if it canibalises other Industries

Product-market fit

This section evaluates the degree to which a protocol satisfies market demand in their specific sector. Investigate the number of users of a given protocol, the trading or transaction volume, growth on both the buy and sell side of the market and evaluate if the is targeting the right product segment in the first place.

Step 4: Competitive moat

The competitive moat is measured by directly comparing the protocol with its competition (using credible analytics tools such as Dune or Tokenterminal) and is broken down into the following categories.

Integrations and partnerships:	Do they have exclusive partnerships? What is the technology stack and how are they using it? Are other projects building on top of this protocol?
Intellectual property:	To what extend has the project developed a unique and powerful IP? Has the project secured real-world IP through agreements or licensing deals with traditional media and entertainment brands?
Infrastructure - security:	To what extend does the project use a secure infrastructure solution, like Ethereum or a rollup that inherits Ethereum’s security? Does the infrastructure solution have a lengthy history of operations? Did the infrastructure solution have meaningful security incidents.
Infrastructure - fees and ancillary infrastructure:	Are transaction fees are low? Does useful supporting ancillary infrastructure exist which is easy to use?
Treasury management:	To what extent is there a sensible treasury management strategy in place? Are assets well diversified to manage risk? What are the mechanism of adjusting the treasury strategy?

It’s important to not confuse exclusive partnerships with partnerships with the protocol simply using their services. The further down the stack, the harder it is to be forked.

Step 5: Tokeneconomics

As the name suggests, the tokeneconomics section evaluates the token design and its use cases. A first important indicator of healthy tokeneconomics is the actual distribution of the token (genesis and right now), as well as the distribution mechanisms.

• How is it going to be distributed going forward?

• Does that align all stakeholders?

• Is there a buyback protocol?

• Who are the addresses in Etherscan? Is it a treasury that belongs to the protocol?

Their documents should contain if there are fees, and issuance and distribution are often mentioned in the title of news articles. If you run into difficulties, scanning the community forum or doing interviews in the community can help you find the information you need.

Lastly, this section reviews what the purpose of the token is, what can it be used for and if it accrues any value for the token holder (revenue or governance rights).

Step 6: Team

Evaluating the team is another important piece of the puzzle as it gives us an indication for what can be expected. Is the team well experienced, i.e. did one or several team members already successfully found or lead a company, start-up, or other web3 protocol.

One important aspect of this section is to evaluate whether the team was capable of attracting the right resources, e.g. team members, infrastructure or funds. Being able to attract large and well-known VC's for example can be a promising sign (though the absence of funding is not necessarily negative).

Specific considerations about the team:

• How capable is the team?

• What is the team’s experience?

• Follow teammates on Twitter or other

• Anonymous founders are ok but are there public-facing members?

Step 7: Governance

Governance is an important part of DeFi and hence part of this report. The goal of this section is to find out how robust the governance system the protocol has in place actually is, and whether they serve all stakeholders (e.g. community) or just a few (e.g. developer team).

Hence, this section looks at the process and technology that enable governance. In addition, providing transparency about who holds the keys (smart contract admin keys) is another important piece of the puzzle that needs to be analyzed in this section.

Governance considerations:

• Are the smart contract admin keys easily accessible? Through a google search or on discord?

• What does the voting history look like on snapshot

• Who is voting on proposals?

• How does the governance compare to others?

• Is there a clear step-by-step process to how governance works?

Step 8: In-game Economy (Gaming Specific)

Gaming is and will continue to be an essential part of the metaverse. One of the benefits of NFT gaming and blockchain technology more broadly is authentic verifiable digital ownership. For games, that enables the creation of open in-game economies. However, these economies need to be well balanced through token economics and token design. The “Gaming” section focuses on the analysis of in-game economies and their sustainability.

Ease of Use

This section investigates the ease of use for players to get to grips with the game, token economics, and onboard funds from the traditional financial system. It also assess the interfaces (i.e. mobile, PC (browser or install)) through which user can interact with the game.

Sustainability of P2E or in-game economy

This section scores the sustainability of the in-game economy. To what extent does the game depend on ever-increasing growth to sustain the ecosystem? Are there multiple adjustable levers the team can pull to balance the economy?

Utitlisation of NFTs

NFTs are the fundamental building block of NFT gaming projects and enable open and transparent in-game economies. What part of the game economy can be owned by players (Land, Character, Items) as an NFT? Is it limited? Once owned, can items be traded freely?

Step 8: Submit for Review

Once you feel you have addressed all section of the review to a sufficient degree, submit the report in the 🔎│report-feedback in discord.

A reviewer will pick up on your report and give your feedback.

Step 9: Submit the report

After you have integrated the feedback of the reviewer you can submit the report using this typeform.

Please also announce your submission in the ⤴│submit-report Discord Channel to make Governor aware of your submission.