Articles on day to day topics. Learn your way into the crypto world.

There is a saying that if you buy a crypto currency in early part of its life than you can expect huge gains. This is true in many cases and complete disaster in most. There are hundreds of coins which are introduced on different block chains every day. We have more than thirty thousand crypto currencies available. Every day new coins appear and disappear. It is not possible to keep track of all of them. Some of them appear and rug pulled quicker. Some take a little longer and are classed as slow rug pulls. But there are many which can turn out to be a gem if you have done your research right. In this article we will tell you what to look for when buying a newly introduced crypto currency.

Less Risky Coins

First and fore most thing to look at is either the coin is a layer one protocol which simply means that the coin has its own block chain and is not built on another block chain. For example, the most popular layer one block chain is Ethereum. There are thousands of coins which are created using the Ethereum block chain. Being one of the earliest block chains, it is also the most popular among developers. There are other layer one block chains too like Cardano which has its native token ADA and many more. If a crypto currency is a layer one protocol, then you can be assured that it would be safe to buy. But there is no guarantee that you will profit from it. It all depends on time where you bought the crypto currency. If you had FOMO’d into a crypto currency at top price, then it is most likely that you will lose out on your investment at least on short term basis but it could be for much longer period. Never buy a coin when it is going up. Wait for a pull back. Keep a close eye on resistances because that’s where things become tricky. If you do not know the resistance level of a crypto then you cannot make profits and end up loosing on your investment. Keep an eye on all time high values. If a coin has hit its all-time high, then it is most likely going to have a pull back to last resistance level which could be the previous all-time high or lower than that.

What To Look Out For?

For new coins keep in mind that new coins could be a new con. It is difficult to figure out that the newly introduced crypto is a real deal or a con but there are always signs. There are certain things to look into. Now a days it is really easy to create a coin with so many websites offering this service for free. So how do you spot a con? Here are a few things to watch out.

1- Online Presence & White Paper

The most important thing to look at is the website and white paper. Read the white paper carefully and see if there are any issue there. Most common is poorly written white papers and spellings or grammar mistakes. And also, false promises showing future quarterly updates with no real track record. Also Check when the website was created. If website is registered not long ago since the introduction of the coin, then it’s a big sign that you are most likely witnessing a scam.

2- Marketing Strategies

Another thing to look out is how the coin in marketed. If there are many spam bots or people shilling a coin with big promises under big influencers comments section, then it is also a red flag. Almost all real deals will approach these influencers through proper channels and let them research on these projects themselves. If a project is shilled by influencers which have small following or promoting a project aggressively then stay away from it. If it’s a legitimate project, then it will catch the eye of big boys sooner.

3- Team Behind The Scenes

Another thing to check is the team behind the project. If they are genuine project the team will most probably DOX themselves which simply means that they will have their development team and CEO and management public. They will not be hiding behind curtains giving false excuses not to show themselves. There will always be a hierarchy from top management to developers and marketing. Everything will be open to everyone to see and there is nothing to hide. And on the plus side you can see what progress has been made since they started the project from the start till it is launched and also all the updates that have happened after they have become live on the block chain. Their developers or management will be giving updates to its community regularly.

4- Testing The Waters & Liquidity

Most new projects are launched onto various dapps first depending on the block chain these are created on. You will find them on dapps like Pancake swap in case of a BNB project or Uniswap in case of an Ethereum project. If a project launches on a big exchange like Binance or Coinbase then you are most likely in safe hands. Every project which launches has liquidity locked. The higher the liquidity locked and for longer time the better it is. If the project has liquidity which is locked in for a short period of time, then it is a big NO. Some good projects burn their liquidity keys for the safety of their investors while others lock the liquidity for a longer period of time. Anything less than one year is also a big NO. Now let’s say there is a new launch and you want to make sure that it is something which you will not be wasting your hard-earned money then first thing to look at which would be a big clue for you is how much slippage the transactions will incur. Bigger the slippage less reliable the project is. For example, if your slippage is around 25% per transaction then do not invest as it will hardly give you any profit and only scammers AKA developers of that project will benefit from it, and you will hardly make your own money back.

5- Small Buys & Sells

Whenever investing in a project on a dapp first thing to do is to buy a small amount of that coin and sell it immediately to see if you can actually sell it. A lot of scam coins do not let you sell. You can only buy but never sell leaving you out of pocket. If you can buy and sell the coin, then it may be safe choice for a while. But as we mentioned do your research properly if you want to be in for longer term. Another thing to look at is that how much tokens the development team and management holds. If they hold a substantial chunk of the total supply than this is also a sign to refrain from such a project. Biggest example we would give of this type is Internet Computer AKA ICP where the team profited in billions leaving investors our of pocket. Project is still in circulation but has lost trust of investors.

Final Word

Here we have mentioned a few tips to keep you safe from scam projects. We hope this will help you keeping safe in this ever-growing market. If you like this article, then please share it with others close to you to keep them safe and alert from scammers.