SmartBCH is relatively new for traders from different chains and even for people who were around in the Bitcoin Cash community since it goes live. According to maketcap.cash, there are over 90 tokens right now in the SmartBCH chain and nearly 40% (or maybe more) in the list were seen to be just slowly dying showing the degen has been done.
Over the next 6 months, I personally expect that more projects will be launched on SmartBCH promising great returns of investment while delivering a so-called "great product" together with their tokens with a bad tokenomics. This is not a FUD to create bad impressions for SmartBCH from people and its investors but rather kindly take this as a guidance before jumping into it/the projects around SmartBCH. Believe it or not, scammers or cash grabbers will soon jump into the SmartBCH ecosystem, create a project, and will slowly operate their scheme to create money out from their inventors.
Prove me wrong, seriously because I might be wrong about this, but you can't still find it anywhere, a place where you can make a small research about the project, the tokenomics, liquidity and etc. except in the project itself and creators who promote it.
As a trader from different chains, where in BNBChain had a lot of bad experiences that turned into a lesson, I want to share all the experiences to people who are in the SmartBCH project to make them avoid any potential loss of investment in a project that was purely a fraud from the start.
Image from Binance.
Always Learn The Tokenomics.
If you are just buying a token with hundreds of decimals thinking it was cheap and early without knowing the tokenomics of the token, then you are probably about to lost your investment.
Knowing the tokenomics means knowing (basic);
The total circulating supply of the token
Max supply of the token
How much goes to the developers or someone (e.g. charity)
How do they burn their tokens (if there's any)
How much tax they put for every buys and sells (if there's any)
Can anyone or someone have control over the token's smart contract?
The bad part of not understanding the tokenomics is that people tends to expect that the price of their token will PUMP very hard because the price is very CHEAP without knowing the tokenomics and considering the market cap.
"The price now is only $0.00001, if this goes to $1.00 I'll be rich.".
Hate to tell you that it's 99.999% impossible, especially if the token has reached a considerable market cap "to sell at". When that token as 1 trillion in supply, it needs to have a $1 trillion market cap for it to reach $1.00 in price.... The next Bitcoin eh?
Another thing to know is knowing the supply of the token and will there be any additional supply. Some smart contracts were program or controlled by the developers to mint new tokens - why? For some reasons. Maybe to reward their community? There are variable reasons for it but the most probable reason for it is that it will be dumped to the market (sell).
Note: Tokens with infinite supply were and will not be a bad investments. Take Ethereum for example. Explanation will be on the next article.
How will this give an impact?
Huge! A very huge impact will occur. Because minting new tokens and selling it on the market, or should I say dumping on investors? You bet it is!
Based on my personal experience in degen trading or finding low cap gems, developers tend to use this strategy take "profit" from Investors. You still don't get it? I'll even make it simpler;
Investors will buy the token in the market making the price go up.
While developers can mint or create new tokens and sell on the market making the price go down.
Get it now? So you should ask yourself, "how can I avoid this?"
This is some of the problems I saw in SmartBCH (or I could be wrong). You cannot see or it's not available to find the smart contract of the token. Knowing the smart contract would mean;
Seeing the tokenomics and the ownership of the contract; owned ownership means the developers can do anything to change anything in the token's smart contract while renounced ownership would mean the token's smart contract is already fixed and developers can't do anything to change it.
Conclusion.
Learning the tokenomics is also learning how your investment can potentially perform, especially in the long run. I wanted to make this as a "deep-dive" article but this could confuse anyone new into it so I made it as newbie-friendly as possible.
Lots of new projects keep promising a lot but then fail to deliver in the end. It's one of the reasons that disappoints others including me.