demesisx, 1 year ago (edited 1 year ago)

Here’s some easy ways to spot fraud in a crypto project:

• not open source
• not decentralized
• anonymous team (not always a sign of sketchiness)
• the crypto is locked in someone else’s wallet (not your keys, not your crypto)
• promises of ROI that are too good to be true (like TerraLunas 20% guaranteed return or the unsustainably high return promised by FTX)
• not formally verified
• an actual use-case rather than leveraging buzz-words to sell a utility token (looking at you IOTA and AGIX)
• initial token allocation is all insiders (Ergo had one of the fairest launches in the whole space, for example so I’d be shocked to see that one be a pump and dump)

I didn’t predict the failure of FTX or TerraLuna but they also didn’t smell right to me because they ticked MANY of the warning boxes above. I’m fairly centered around Cardano ecosystem projects but even in that ecosystem there’s bound to be some fraud. I protect myself by sticking to my gut feeling and using that small checklist. I have yet to be defrauded and I’ve been investing the space since 2017. It’s not hard and I am not Nostradamus but thanks for the compliment.