Note: This article is not investment advice. Especially now, never invest more than you can afford to lose in any project.
When BTC dropped from over $50k, it triggered selloffs in most other cryptocurrencies across chains and continents. In and of itself, this isn’t terrible… but a down market leads to other problems: namely, an increase in scam projects and exploits.
There are a significant number of investors who bought in while BTC and other currencies were higher than they are now. Some of those investors aren’t used to crypto’s volatility, and “hodling” isn’t in their vocabulary. In other words, those investors might be especially desperate to make up their recent losses (if they sold) by looking for promising projects.
Well, unscrupulous project owners are all too happy to make promises that sound good but are impossible to keep. Like:
- Our token will hit $1B Market Cap in a month! (No one can predict the future. Never believe anyone who says they can.)
- This project cannot be exploited. (Always look into what steps a project takes to prevent exploits. Don’t take a project owner at their word.)
Always look for actions over words. A flashy website doesn’t mean the underlying code is solid, nor does a crappy website mean that the code is good. While there are no foolproof rules to protect you, we have a few suggestions:
- Read the project’s documentation. Search for similar phrases on Google to see if it is copied from elsewhere.
- Hang out with the community. Ask questions. If you are banned for asking whether liquidity is locked, for example, you might want to second-guess investing.
- Make sure the project was audited BEFORE launch, and read the audit to see what the team did to address issues. Just because a project was audited does not make it safe. An audit could even highlight issues that the team chose not to fix.
- How long has the project been around? Longer usually = safer, but not always.
The biggest rule, though, is never invest more than you can afford to lose. Not ever. If a project is exploited or turns out to be a scam, you will probably never see your money again.
It’s all about risk tolerance. A down market brings out all the scammers to take advantage of those desperate to make up lost income. This only leads to more lost money. Don’t fall into this trap. If you can’t afford to invest right now, then wait until the market stabilizes. There’s no hurry.
And remember to #staySAFER!
Helpful Links:
Buy SAFERMOON: https://exchange.pancakeswap.finance/#/swap?outputCurrency=0xA656F993bD14B2B59a28d1e610476AD18849b107
Website: https://SaferMoon.net
Twitter: https://twitter.com/safermoonreal
