Market Sentiment and Regulatory Environment:Community Perception: Analyze the project’s reputation within the community and any history of negative publicity.
Regulatory Compliance: Consider the project’s approach to regulatory compliance, especially regarding KYC/AML practices.
By applying this framework, investors can gain a deeper understanding of the risks associated with DeFi projects and make more informed investment decisions. It’s crucial to remember that DeFi investments are inherently risky, and due diligence is paramount.