Here’s how you can identify a Scam Crypto Project

• Roadmap is an important identifier for crypto projects
• According to research $1.26 billion worth of cryptocurrencies stolen from DeFi platforms in the first quarter of 2022
• This equates to over half (55%) of the total amount stolen from DeFi platforms in 2021

Cryptocurrency users are easily deceived by a project.Due to the lack of regulation in the sector, opportunists exploit investors, causing these issues to persist.

Despite the fact that crypto scams are common, they can be avoided. Before making a financial investment in a project, thorough research is essential. Knowing what to research and what warning signs to look for can help novices avoid financial loss.

How to identify a new or scam crypto project

Reading the whitepaper thoroughly is a good way to tell if a project is a scam or just new.

A document that provides all of a project’s information in detail is called a whitepaper.

Tokenomics, team members, background information, and the project’s mission and vision are all examples of this. A whitepaper that is well-written and answers every question is usually a good sign of a new project.

The project and its technology will be explained in great detail by developers.Information regarding any crowdfunding will also be included.This is yet another method for determining whether a cryptocurrency project is new or a con.

An ICO or token sale must be easily accessible.Transparency is also a requirement for any information regarding the sale’s progress.The token sales figures must be recognizable to potential investors.If the sale is ongoing, it needs to be trackable, which is another important factor.It is best to steer clear of a project that restricts this information in any way until it is freely accessible.

A road map is another important identifier.It is important for crypto projects to have a clear, organized roadmap that explains the project’s success plan and guarantees its longevity.

When it comes to identifying a fraudulent crypto project, transparency is essential.It’s a red flag if there are more questions than answers.

Lastly, trusting your instincts is a crucial aspect.Proceed with caution and return to the project at a later stage if it initially appears to be fraudulent, if there are mixed reviews, or if it contains some information but not a lot.

ALSO READ: Two Firms charged for Alleged Crypto Pump and Dump Scheme

Research is key to identifying a scam crypto project 

Research is essential for avoiding financial loss for both novice and seasoned investors. 

This applies to crypto projects as well.In the crypto industry, scam projects are inevitable, but they can be avoided.

A new digital footprint and a lack of transparency are two red flags to look out for.Additionally, pay attention to your gut. A project’s future success and the developers’ intentions for potential investors can be greatly influenced by a whitepaper.

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

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