Nowadays every and any business, sports team, movie publicity team, art work is getting tokenized or coming up with a new token into the market. In the name of deFin and governance they are hampering the blockchain environment. Many new HOLDers are getting knowledge of these currencies firsthand, with minimum understanding losing all assets in it then turning away from defi. with a bad impression of being robbed or hacked. I know the system allows any and everyone but we should be choosy about buying our digital assets. You must look into these special terms to understand the feasibility of a token and safe investment of your assets.
Let me put you in a real time scenario to show what preconditions you need to consider before investing. Hereby, I’ll talk about some indicators (general and basic one’s only). I will compare two tokens; 1) Bitcoin 2) Squid
1) Bitcoin
Look at the price chart, price change, don’t focus on it. Price change represents the recent “ US Toilet paper” price outbreak. Here, the most important one volume/market cap plays a vital role in identifying worthy coins. That number must have a rational point, usually, higher average daily trading volume means that the security is more competitive, has narrower spreads and is typically less volatile. Check ADTV(average daily trading volume) for several days to get an idea.
Then comes the volatility itself, volatility means how volatile the currency is. This will let you know how fast the token could turn to vapour. Although the whole market is extremely volatile, scam alt coins are more than usual.
2) SQUID:
These types of coins are called shitcoins! Well they are not rather a scam to ruin your investment. At the beginning, whales were reported as associates of these motives but now every other developer tries to earn with them. Take a look, the warning signs after volume/market cap and market dominance which says, “The CMC team has not verified the project's Market Cap. However, according to the project, its self-reported CS is 720,121,920 SQUID with a self-reported market cap of $9,542,789,370.”
Now I or you and the man next door can say and self report his own innovation. It’ll be your choice to put in your valuable assets on just words.
These became money making machines for many. They are not of any project, any goodwill or ever decentralised at some point. You should follow these list to verify and analyze the goals of a particular project before buying them.
Know the Team
If they are saying these are all secret and anonymous members are operating the project. That’s sooner or later a scam. In short, Bitcoin happens once and we know Buterin.
The White Paper
The whitepaper lays out the goals, strategy, concerns, and timeline for implementation for any blockchain project. There might be an ICO whitepaer as well, find them, read them, write it all there. Even maybe a indication for scam! maybe haha.
Find the progress report and analytics
If the project is hiding many or any info about sales, circulation, contribution and amounts whales hold then red flag this is going nowhere.
Follow these reports and try to invest safely, we will change it all!
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