In the fast-paced world of crypto, figuring out which projects are worth your time and money can feel like navigating a Wild West showdown. That's where this clever rule of thumb comes in, shared in a recent thread on X by Token Terminal. It breaks down the key metrics to watch, starting from the gold standard—profits—and working down to the basics. If a project can't show anything substantial, well, it might be time to saddle up and head home.

The rule originated from a post by Marc "Billy" Zeller, founder of the Aavechan Initiative, who suggested printing it out and hanging it in your "war room." Token Terminal, a platform known for providing fundamental data on crypto projects, chimed in with some nuanced takes on maturity and performance. You can check out the original thread here.

Breaking Down the Rule

Let's unpack this step by step. The graphic lays it out like a flowchart for crypto success:

• If you have profit, show profit. This is the holy grail. Projects generating real revenue after expenses are the ones building sustainable value.

• No profit? Show earnings. Think of this as gross revenue or fees collected before costs. It's a sign the protocol is at least bringing in some cash.

• No earnings? Show TVL (Total Value Locked). TVL measures the assets deposited into a protocol, like in DeFi lending platforms. High TVL indicates trust and usage.

• No TVL? Show market cap growth. Market capitalization is the total value of all tokens. Growth here can signal hype or adoption, but it's volatile.

• No market cap growth? Show trading volume growth. This tracks how much the token is being bought and sold. Rising volume might mean increasing interest.

• No trading volume? Show transaction growth. On-chain transactions show actual activity on the blockchain.

• No transactions? Show users. Active users are a core indicator of engagement.

• No users? Show token holders. The number of wallets holding the token. Broad distribution is better than concentration.

• No token holders? Go home. If there's nothing left to show, the project might not have legs.

This hierarchy emphasizes substance over hype. As Token Terminal points out, different metrics shine at various stages of a project's life. Established players like Aave, a leading DeFi lending protocol, have had years to rack up impressive numbers in profits and TVL. Newer competitors might focus on user growth or volume to prove their potential.

How This Applies to Meme Tokens

At Meme Insider, we're all about meme tokens—the fun, community-driven side of crypto that often starts with viral memes rather than complex tech. But let's be real: many meme tokens would flunk this rule early on. They rarely boast profits or earnings because they're not built as revenue-generating machines. Instead, they thrive on community buzz, which shows up in token holders, trading volume, or market cap spikes.

Take Dogecoin or Shiba Inu as examples. These started with massive holder bases and trading frenzy, but over time, they've worked on building utility to climb the metric ladder. For aspiring meme token creators, this rule is a wake-up call: If your project is stuck at "show token holders," invest in community engagement or partnerships to boost transactions and users.

On the flip side, DAOs (Decentralized Autonomous Organizations) like those governing lending protocols have more maturity. As Zeller notes in a reply, top lending platforms survived the 2022 crypto winter resets (think FTX and Anchor collapses) and now compete on solid metrics. Yet, Token Terminal highlights that some long-running DAOs still lack financial proof points, proving age alone isn't enough.

Why This Matters for Blockchain Practitioners

Whether you're diving into meme tokens for quick flips or building in DeFi, this rule helps cut through the noise. SEO tip: When researching projects, search for terms like "crypto project TVL metrics" or "meme token trading volume analysis" to dig deeper. Tools like Token Terminal or Dune Analytics can provide the data you need.

In the end, crypto is about innovation and community, but sustainable success demands real metrics. Hang this rule in your mental war room, and you'll be better equipped to spot winners in the meme token Wild West and beyond. What's your take—does this rule hold up for your favorite projects?