How to spot your next x100 Crypto Gem
This is the oldest story in the book, your money in the bank stays idle, and inflation is steadily draining you.. Two things you cannot avoid Death and Taxes.
This article is about investing your money in a sensible way in the crypto market, the fact that is so volatile is also the reason it can be very rewarding if you play your cards right.
I am going to share a tactic that has worked out for me over the past weeks. You don’t have to be a blockchain expert or a developer to find a good investment, let me show you how.
1. Know where to look
This is the first and most important step, visiting a listing website is how you would like to start. There are countless websites for that, but we will use the Coinscope.co successfully used to identify new gems.
As you can see in the picture above, those listing websites all have a sharing thing in common, Promotion section. This is how they make money, but this is also how you can see which coin is spending money for promotion too.
Over the last weeks, more and more new coins are emerging and claiming to save the planet, or do charity donations, or much much more things… From my experience 9 out of 10 of those coins are a scam. They are looking to take your money away quick and easy, and then move to the next ponzi scheme.
The coins that tend to be more serious, they don’t mind the extra money for marketing. Like a good investor, you wont pick the first promoted coin you click, you will click all of them and start comparing them.
2. Check the details of the coins you choose to look deeper
There is so much information on websites like these for you to check.
- Check their website, make sure its responsive and its not a cheap template someone made in a day. Check for typos and small inconsistencies with their description. Usually scam coins tend to not pay attention and get caught to those small details.
- Check their whitepaper, make sure the information there looks genuine enough and not like a high school essay, I find this the most common mistake those scamcoins do, they don’t bother with adding a whitepaper or it looks like your 10 years old cousin made it.
- Check their telegram channel, Make sure its not bots or fake users (typical example would be of a channel having 10k members but only 100 online). Ask questions to the admins and see how fast they respond and how good is their English.
- Check their twitter, there are free tools online that help you identify how many users of a specific twitter account are fake and how many are real, check how much user engagement they get on their posts and how much money they used for marketing giveaways.
- Check their Domain registration, websites like https://who.is/ help you check when the domain was bought and when it is set for renewal, scamcoins will have their domain bought very recently with a year max renewal date.
- Check for doxxed team (that means the developers and team are using their public profiles and not hiding behind anonymity), that is not a blocker for me as many successful projects choose to doxx a lot later after their project launched, but this can be a reason for me to invest more than I would to if the team was hidden, as it makes it even less possible to be a scamcoin. Make sure their profiles are legit if they do share them btw, check their linkedin links and see how many friends they have.
3. Ready to get techy? Check the smart contract
You don’t have to be a blockchain expert or a senior developer to be able to spot a few things, first of all we are going to look at the comments on the contract.
Usually contracts with malicious functions like preventing you from selling your tokens (known as honeypots) will have comments on their contract. Look for them.
Next thing you would like to check is the holders percentage, as you can see in the screenshot, pressing on holders tab will give you a list of the existing holders (I used safemoon for this example as most tokens are his clone). Make sure the holders allocation matches the websites and whitepapers tokenomics section, if they said they will burn 60% of the total supply but only burned 30% and kept the other tokens to their dev wallet, thats a hard blocker for you to buy.
Finally check for Liquidity Pool lock and if ownership is renounced. LP lock means that the owner cannot remove liquidity and “rugpull” your money away. Usually they tend to lock liquidity for a few months, make sure to know when the lock is going away and how much percent of that LP is locked. Ownership is a grey area, some contracts require ownership to be able to deliver what complex tokenomics they said they would, but most of them don't have any meaningful owner function interactions, just some functions for manipulating fees and liquidity. In that case its better if its renounced to avoid any exploits by the owner (changing holder fees later, or removing fees from his friends)
Investing in cryptocurrency is a risky endeavor and you should only invest what you can afford to lose, this guide is not a financial advise, just a successful strategy that has worked for me personally.
As long as you know how to use your tools (coinscope, bscan, etherscan) you minimize the changes of getting scammed.Back to Blog