🔺Crypto Project Red Flags
The crypto world is no doubt full of opportunities. But sadly where there is opportunity — there is also a share of fraudsters. With the amount of projects being born every day, it’s wise to ask yourself, how do I tell which projects are legit? We at BXH are here to help out with our 3 big red flags list!
1.Anonymous Developers❌
Satoshi Nakamoto may have successfully remained anonymous while launching Bitcoin, but nowadays an anonymous development team is a big no-no.
While some may indeed choose to remain anonymous for safety reasons, in the majority of cases they are hiding from their previous fraudulent activities or preparing for future ones!
Remember the SQUID memecoin? This Netflix-show-inspired token rallied 45,000% within a few days after launch, only for traders to realize that they were unable to sell the tokens on any exchange. All developer team? Anonymous!
If you want to make sure you are trusting in a real reputable entity, we suggest checking out the team and their contacts well in advance.
2. Cult Personalities❌
Beware of one person guiding the flock. Hype, centered around the personalities behind the projects, as opposed to projects themselves, is something to look out for.
Just think of the very recent collapse of Fantom ecosystem token prices after the DeFi developer — Andre Cronje, deactivated his Twitter account and informed the community that he was leaving the crypto space. Cronje had become so popular that many people would buy a token just because he was involved, and when he left, many of these investors dumped their holdings, which negatively affected the tokens’ prices.
Did he intend to create this mess? Hardly! Did the investors and the market still suffer? Absolutely.
3. Fake Decentralization❌
What on earth is that, you may ask? Well, many projects claim to be decentralised, but not all of them are. If DeFi protocols seem to behave in a more centralized manner than they claim — that’s what they probably are — centralized.
Keep in mind that a real decentralized project ALWAYS involves the community for decision-making. Does the project you are eyeing offer token holders governance rights, yet makes a major protocol decision without consulting the community for feedback and approval? Red flag!
đź“ŚConclusion
Seems there’s quite a lot to consider when spotting fraudulent projects, right? We at BXH are happy to share our knowledge on the subject, as well as to remind you that we are 100% transparent — with all our info out in the open!
Stay Safe with BXH! app.bxh.com/
