Today a friend in a group posted a project and everyone started discussing it. One of them said that this was a "leek plate" and another friend said that it seemed that a certain exchange and a certain celebrity were also following the Twitter account of this project. Can we just follow it?
So the question is, how do we determine whether a project is safe?
And is this project worth participating in? (Preliminary investment research)
Let me give you some identification methods based on my personal experience.
1. First, observe the project’s Twitter registration time to see if it was registered recently or even just this month.
2. Check whether the CEO/founder and ecological projects of the high-quality projects you are following are also paying attention to the project
3. Some project owners will purchase tweets from celebrities as hype and endorsement points, so be especially careful!
After some early people who were active on Twitter and had strong abilities in certain fields were inadvertently followed by celebrities, the project owners would quote these people’s tweets, delete the original content, and thus package their own projects.
4. Observe the popularity of the project, page views, real user comments, and the spread rate of publicity and marketing in a certain area.
5. Observe whether the project party’s Twitter is active in Asia or Europe. This is likely to reflect the project party’s main promotion area and the team’s actual location.
6. Evaluate the technical architecture of the project, including blockchain platform, smart contracts, consensus mechanism, etc.
Confirm whether the project's code has been open source and audited, and look for third-party audit reports.
7. Check for any known security vulnerabilities or past security incidents.
8. After entering the project's official website, check whether GitHub is active. If the project party has written their LinkedIn on the official website, you can go there to view the project party's team resume.
9. Understand the project’s financing and fund usage
Here I recommend a website for you to check financing: rootdata.com/zh/Fundraising
It is currently the website I use the most and I think it is one of the best financing inquiries and 1.5-level market inquiries websites that supports Chinese.
10. Analyze the token economic model of the project, including token distribution, circulation and lock-up status. Understand the actual application scenarios and value support of the token.
11. Identify projects that promise unrealistically high returns or return on investment that is not explained in detail.
Check the project’s whitepaper and official website to look for exaggerations or false information.
12. Verify the project's partners and consultants to confirm their authenticity and qualifications. (You can check the website in conjunction with Article 9)
13. Find out if the project and its team members have any negative news or history. (It is especially important to find out if the project party has a criminal record)
14. Evaluate the information transparency of the project, including the degree of disclosure of project progress, financial status and technological development.
15. For listed projects, monitor the trading behavior of project tokens to understand whether there are abnormal trading patterns or price fluctuations.
Assess the project’s market liquidity and distribution of token holders, looking for potential manipulation.
16. Always pay attention to the token unlocking situation
Here is a token unlocking website I have been using.
token.unlocks.app
That’s all for today’s sharing. Welcome everyone to follow me. I will continue to produce more high-quality articles to help you avoid pitfalls!