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With the crypto market seeing a rise in fraudulent schemes that promise guaranteed earnings and then fail to deliver, investors would do well to watch out for the signs of a scam project before investing their money.
To protect themselves from these scams, investors need to distinguish worthwhile projects from those that will result in significant losses.
• One of the main signs of a scam project is when the project team makes promises they cannot deliver. This might include guaranteed earnings that cannot be accurately predicted.
• Investors should be cautious when a project team is anonymous. A strong team is one of the factors that can determine the success of a project, and when it is not transparent, concerns can be raised about their credibility.
• Investors should also be wary of projects that have no technical documentation or working product. Even the most revolutionary idea without proper documentation of its technical solution is nothing.
• When a project announces a super large-scale project with a small team, it is hardly worth trusting.
• Another warning sign is when a project has a roadmap painted out for several years ahead.
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• The crypto market is very dynamic, and several peers may have already been released during that time.
• Investors should also be cautious if the team is allocated a large share of tokens. A team that wants to get 30% to 40% of the tokens, and loudly proclaims the high decentralization of the project, looks questionable.
• Low token prices might seem like a great potential for growth, but investors should pay attention to capitalization.
• Weak marketing is also a cause for concern, as even the coolest product can fail if nobody knows about it. If the project is absent from any social networks, it is already a very alarming sign.
• If investors are not clear on what the project does or if it hides information about competitors, they should avoid investing in that project. A good project should not be afraid of competitors, and if they are not mentioned in the documentation, that is a reason to think twice.
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Photo: Panchenko Vladimir via Shutterstock
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Image and article originally from www.benzinga.com. Read the original article here.