Nearly 7,000 people are scammed by malicious blockchain-based platforms. PrivacySwap does not want you to be a statistic. That is why we are here to share with you the five things you should check first in a platform before you invest.
The birth of cryptocurrency provided many opportunities for people to invest with great returns without undergoing the painful process of verification. With that, opportunists also see an open space to exploit the opportunity to scam people. Hence, scams and frauds became rampant in the blockchain ecosystem, which scared people from investing. To provide you with a helpful research guide, here are the five things you should check on the platform you will be investing in.
Obviously, the first thing you should be checking is the project web page. You should review all the red flags that could lead to a possible scam. A lousy website is a complete “no-no.” As scammers’ only goal is to scam, they usually don’t focus too much on their web page’s visuals. Therefore, a poor-looking web page is a major red flag.
If you are satisfied with the project’s web page visuals, you must also review some parts of the website. You should also check if the project displays its tokenomics, whitepaper, and roadmaps. Once you have seen all these three, you might as well read them. These parts of the website are good proof if the website has the plan of expansion, what comprises the company, and its tokens. Nevertheless, if you see that the platform promises too good returns for a short period of time, beware.
Social Media Activity:
One of the obvious and accessible ways to broaden your audience is through social media. Therefore, scammers tend to use it and create accounts that could lure people. Check if the platform has Facebook, Twitter, Instagram, and Youtube. Aside from checking their accounts, there are also a few things to check on social media accounts. You could check if the projects have posted promotions about their features, check if they respond to queries, and handle customer service. Again, a too good promise could not be true, be careful.
In addition, you could also go to comments and see if there are people who interacted with the posts and verify if those who interacted with the post are real ones.
Also Read: The 7 Ways to Spot Scams and Rug Pull Guide
Check their Telegram:
To verify the platform’s legitimacy, Telegram is one of the best places to go. Most platforms opted to create a Telegram community to hear what the users feel about their platforms. If the project has a good Telegram community with active participants from REAL people, it is a good sign of a legit platform. In addition, you could check how often the moderators check and update the users on such platforms.
Check using external resources:
Once you are satisfied with the project’s website, social media, and telegram account, you can also verify the project’s legitimacy on different websites available on the internet for free. Do a scam check on websites such as BSCscan. This website is an excellent place to check a DeFi platform. Dextool is also a great website to check a platform. Dextool gives you real-time statistics about the coin of the project you’re looking into. Take a look at the chart; if you notice a chart with absolutely no sales and only buys, it’s most certainly a honey pot.
Also, check if the platform is listed on coin markets such as coin gecko, coinmarketcap, and more. While on those web pages, also read and hover to check how their tokens are acting in the market. Check its prices, trading volume, and all aspects to verify the platform’s authenticity.
Going too technical, pro investors also check audits from external auditors to add credibility to the platform. CertiK audit is one of the popular auditors that platform developers pursue. Techrate audit is one of the audits that provide extra credibility. Nevertheless, make reading a habit to ensure that the audits were legit and understand the platform in which you will be investing.
The bottom line
Scams could exist in front of your eyes, so always be careful. There is no wrong with being smart and knowledgeable about the DeFi space, especially if you invest. Nevertheless, always be responsible with your assets so that they can give you the best return soon.
Moreover, if you are a new investor, you can listen to our DeFi classes available for FREE on our Youtube channel.
What do you want to learn next? Let us know!