How To Avoid Crypto Scam
ts meme coin season & Altseason, and that means SCAM Season.
If you’re new to tokens and meme coins here’s what you should know/do:
1) First steps
You stumble upon a token which looks like a good investment:
Look them up on coinmarketcap.com, on there you’ll be presented with the token, a website, the whitepaper and the contract.
Take a look at the website. Make sure its a real and functioning website, evaluate it. Try to find who’s the team/devs behind the project and make sure they are real (they’ll most likely have social networks like twitter, linkedin, Facebook etc.).
The Whitepaper is a document released by a crypto project that gives investors technical information about its concept, and a roadmap for how it plans to grow and succeed. Check the whitepaper if you’re really into investing on this coin, make sure its a legit whitepaper.
The Contract is the address/chain (you can find it on coinmarketcap.com) in which your token is in. If you click on the address it will take you to a website where you can check more details about that token. If you go on “Holders” you can check how’s the token distribution. If its a scam coin, most likely there are addresses with a large amount of those tokens (something like 50% or 80%). Also you can go into “comments” and check if there are people saying its a scam or people saying you can’t sell.
Check their social medias. They will most definitely have twitter or reddit or some other. Look them up, check if its legit and if its just not bot accounts.
2) More in-depth
After the first steps, you should already have a decent idea on what you’re into, but you should check this next steps:
Find the website where you can look up your token address (the address you find on coinmarketcap.com) and they will tell you if the token is a honeypot (honeypot is when your token is not sellable, meaning you can’t sell it and you’re stuck with the tokens).
Find the website where you can look up your token address and they will tell if the token is 0/100 High Risk, if it is, its probably a scam.
3) Final analysis
Now that you have checked your token you have to decide if its a good investment.
Make sure you have found the answers to the following questions:
How old is the crypto’s website? Does it have spelling and grammatical errors (like SQUID)? A newer website that looks thrown together is a red flag. Make sure that there’s some type of prospectus you can read as well.
How old are the crypto’s social media profiles? Can you interact with the accounts? SQUID’s Twitter was closed to replies.
Have other investors (non-insiders) been able to successfully sell their positions? If you can’t sell, you might as well be making Monopoly money.
Has the crypto increased in price dramatically in just a few days or weeks? We’re talking thousands or even tens of thousands of percentage points.
Check the coin’s liquidity. If it’s extremely low, don’t bother. A legitimate coin should have high liquidity.
Note that a meme coin has no real use cases, its just a meme, therefore there’s nothing going on for it other than good marketing and “spread the word”.
Educate yourself everyday, watch YouTube videos, research on Reddit, on twitter, on google. Stay away from hyped coins.
Be careful around crypto space, don’t trust anyone and DYOR before getting into a coin.
Trust the numbers, not your guts.
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