The answers to the following questions can help you minimize losses and avoid detours in your investments:
1. Why do project teams and institutions lock their tokens, yet the tokens plummet when listed?
Even if the project team and institutions lock their tokens, there may still be a large amount of airdropped coins or early investors selling in the market, leading to a price drop. Additionally, the expectation of future unlocking of locked tokens can put psychological pressure on the market, triggering sell-offs.
2. Are tokens launched fairly really fair?
Tokens that are launched fairly seem open to everyone, but in reality, large holders and bots often use technical means to acquire more tokens ahead of others, putting ordinary investors at a disadvantage, thus they are not truly fair.
3. Why should you avoid tokens with poor contract depth?
Tokens with poor contract depth lack liquidity, have a large bid-ask spread, and are prone to severe price fluctuations due to large trades, increasing the risk of losses. Large orders may also be targeted by market manipulators.
4. Why are new tokens not recommended for long-term holding?
New tokens typically lack market validation, and there is uncertainty regarding the capabilities of the project team and the sustainability of the project. In contrast, tokens that have gone through cycles have been tested by the market, presenting relatively lower risks.
5. Why are tokens with high community engagement more dangerous?
Tokens with high community engagement often attract a lot of speculative funds, making prices prone to being driven up. Once the excitement fades or negative news emerges, the price may collapse rapidly.
6. Why should you be cautious of high APY projects?
High APY projects usually attract investors with high returns, but there may be hidden Ponzi schemes or unsustainable economic models behind them. Once the inflow of funds slows down, the project may collapse, resulting in significant losses for investors.
By understanding these issues, you can better avoid risks and make more informed investment decisions.
