Welcome back,
In today's blog, I want to discuss something that is been bothering me for a while especially now that the market is booming again and everyone is talking about altseason and different tokens going to make you rich by going 10-20X. More and more influencers on Instagram and YouTube are promoting shitcoins, that are the coins with no real value or future and they simply do this because they are paid to do so.
So let me quickly share something I personally experienced a few months ago which will help you understand a lot about these things.
The Trap I Witnessed (Thankfully Not Fell Into)
Even though I was not a direct victim, I observed a very popular crypto influencer promoting a token on Instagram, claiming it would go 5x, 10x, even 50x during the bull run. Because of the trust his followers had in him, many of them invested in that coin. Sadly, within just a month or two, the coin crashed to nearly zero. It turned out to be a rug pull or a worthless project. As of the last time I checked, that token had no real value left. While the influencer made money here the common people suffered ( Sadly).
Why This Blog Matters
If you are here, you don’t have to worry because I will try my best to educate and guide you on how to identify red flags, do your own research properly, and protect your investments from such types of influencers and projects.
One Thing People Often Ignore - Do Your Own Research
The first thing that should be very clear to us is that there are very few Crypto Influencers who are actually there to help you and most of them are just there to milk their Bags by someway or the other. Most influencers promote coins that benefit them, not you. And that’s where your personal research becomes your strongest weapon and that is why you should never ignore doing your own research about a project.
How to Spot a Promotional Scam
Here are a few ways to spot if a project being promoted is a paid promo scam or a real gem from the Crypto Market.
See who you are following, what history of work do they have in the Market.
Is the influencer well known and credible for sharing decent projects or not? Have they been around for several years in the crypto space? Are they transparent about promotions? and If they suddenly popped up during the bull run and are hyping projects without any risk alerts, that’s a huge red flag for me personally.
Ask the Right Questions
If you are watching a YouTube video or a post on Instagram, ask in the comment section questions related to the project they are sharing like What real world problem does this token solve? Why they personally think that project will go to the moon and do wonders in coming days? Does the team behind the token have any past experience or they are just a group of Ghost who appeared instantly.
Read the Whitepaper
Don’t skip this part at all as this is one the difficult and time consuming thing to do for any project you are researching on. Head over to the official website and read the whitepaper. This document will help you find almost everything about the project and a good whitepaper is something that will contain the following info:
What the project aims to do
Whether it has a clear roadmap
Whether there’s any real technology or utility
Also, check out the team behind the project and you should Look for,
LinkedIn profiles.
Past experience in crypto world if any make sure to see them as well.
If they are verified identities or just the new ones created recently.
If you can’t find enough info just make sure to walk away.
Understand the Tokenomics
How many tokens exist?
How many are in circulation?
If there are any sales going on and if that matches the tokenomics or go against it.
Are there whales holding a large share?
A well structured tokenomics plan will protect you from dilution and schemes that are there to just pump and dump a project for top holders benefit.
Check their Community
Go to their Telegram, X , Reddit, or YouTube and check the following:
What are people saying?
Are the discussions organic or just forced? Spending a little time will tell you about the genuineness of the project interactions going on there. If it feels fake, just walk away and find a better project like LEO.
Check the Token Holders
If it’s a Binance Smart Chain (BSC) project, go to Bscscan which is the official block explorer for Binance and there check what you see under the Holders section.
If 90–99% of the token supply is held by 2–5 wallets you have to not think anything else and just run away from the project and save others as well.
If the top holders own not more than 10–15%, that’s a good sign and you can continue with the research further.
I have seen coins where two wallets control 99.9% of the supply, this is obviously considered negative as two to three people can come together to dump the entire market and make the small holders suffer.
Lets Conclude
At the end of this vlog, let me say this again as always. The decision is always yours. It's your money, your investment. I have simply shared my personal opinion and experience to help you make the right decision and I really don't want you to follow me blindly. Go ahead and see how others ask you to do in a similar situation and then take a decision.
But let us end this blog by saying that never blindly trust an influencer be it a new or old influencer or even the good ones. No one is perfect and they can do mistakes with their research.
Do your own research
Read the whitepaper
Understand tokenomics
Analyze the holder pattern
Join the community and explore it
If you do these things, you will avoid scams, probably protect your funds, and also make sure that you make the most out of this web3 space for yourself.
Thank You and Happy trading Everyone.
