With hundreds of new crypto projects launching every month, how do you know which ones are worth investing into? How do you know which are solid and which are probably scams or rug pulls? With our team here at 111PG comprised of top-notch cybersecurity experts and with our expertise in helping solid projects launch their token, we can share with you the signs we look for when determining if a project is solid.
Many scams are so focused on collecting maximum investments from their victims ASAP and running away with the money that they don’t even bother to set up a Discord. Of many scams who do create social channels, those channels are merely for show, with little actual activity going on their. So make sure to check the project’s Telegram, Twitter, and Discord.
See not just the volume of activity but how many people are actively participating. The depth of the conversations is also important: if it’s all about “wen moon” and “LFG” with random memes sprinkled in, that’s not a sign of a healthy project with growth potential. But if they are actively discussing the project’s mechanics, positioning, plans, etc. — that is a good sign.
We now live in the world of anon teams where the founder is suddenly discovered to have founded several rugged projects before just as he’s rugging his current one. So at the very least, make sure the pseudonymous founders have a solid history of successful projects behind them.
If the founders actually doxxed themselves (revealed their real names) and even provided LinkedIn and other credentials — that’s a good sign of a real project, especially if the founders are experts in the fields useful to the project (and blockchain in general).
Few projects exist in complete isolation. Partnerships and collaborations are important for cross-marketing, mutually beneficial technological expertise, complementary services, and many other reasons. Check if a project is doing a significant number of collaborations. Then look deeper: are these collaborations with other reputable projects and platforms (Binance, Curve, Gitcoin, etc.) or little-known projects with no history of credibility?
Sure, media coverage from crypto publications and many influencers could be bought. So look at both the volume and the reputation of the outlet. If a project is all over CT, various crypto publications, and the most trusted influencers are talking about it — maybe there is something there. Even if it’s all hype, at least you know there is public interest in it and so you won’t be the only bagholder.
Solving or creating a problem?
Finally, ask a fundamental but crucial question: is this project solving a problem or creating one by proposing a solution where one isn’t needed? For example, with all the new Layer 2 solutions for Ethereum, how is a new one better than Gnosis, Optimism, or Arbitrum, to name a few? When new NFT marketplaces pop up, are they trying to serve a new market like Fractal did for Solana or just vampire attacking the industry leaders like what LooksRare attempted? Granted, even when the market is saturated, a new entrant may offer a better approach.
LooksRare promised better fees and governance with more ways for holders to earn. Optimism has a social mission aspect to it. When you look at a project: check what its unique angle is and evaluate whether it’s enough to legitimately challenge more established rivals.
At the end of the day, any project can be a scam or the next Ethereum. Still, taking a closer look and using your best judgment can help filter out the most obvious scams and improve the odds greatly towards investing into a legitimate project. Beyond that, knowing some cybersecurity experts is always a good thing.