How to Choose the Best Tokens and Avoid Scams
Finding projects that really amount to something may be hard. But it’s not impossible. Learn how to find the best tokens to invest in!
What are Premined Tokens?
Currently, pre-mined tokens have taken up most of the space of token launches. These tokens are the tokens whose total supply has already been determined. In contrast, fair launch tokens go strictly to those who actively participate in the token’s blockchain. For example, bitcoin remains the top fair launch token. The token goes to those who mine it.
Premined tokens get pre-distributed usually to the following:
- Investors
- Team (Founders)
- IDO Sale participants
- The community
- Active participants (stakers or miners)
You might be wondering about the higher risks of investing in pre-mined tokens than fair launch tokens. Well, fair launches aren’t always safe. If they have bad tokenomics, you can’t expect them to yield any better results than pre-mined tokens.
A large part of the pre-mined tokens is separated from the community itself. What’s investing without a thrill of the risk?
However, if you’re still looking to play it safe, we’ve got you covered too.
Scams in Premined Tokens
More than a dozen scammy-looking tokens pop off in the community every single day.
How? Look at XRP. They had no rewards for mining to decentralize. Such tokens are widely centralized and affect the price action, heavily suppressing it.
The easiest way to look out for such tokens: ICO Drops
ICO Drops show you upcoming token sales. However, that’s not enough. Go through their little bio. If you find something that’s already been addressed by another token, you’re looking at a proper scam.
Make sure tokens that you are interested in let you participate. Moreover, if it’s illegal for you to participate, then it isn’t worth the risk!
Tokenomics
How to know a token is actually legit? Go through their tokenomics sections.
Tokenomics are summarized versions of the whole lengthy allocations of the tokens. I mean who has the time to go through reports today, right?
But what if they haven’t placed one? Oh, boy. You may better off go find another token that offers one.
I mean, if they haven’t placed their plans transparently, what makes you think their plans are good at all?
Follow the token creators, their teams, their projects and make sure what they have seems legit. Tokenomics shows all the allocation. Most projects keep updating their tokenomics until the actual token sale.
Research Paths:
- The websites of these projects are the perfect place to start your research. Look up their total supply, their vesting periods, and predetermined allocations.
- Most projects have their tokenomics posted Medium so if you’re reading this, go search right now! Here’s an example of Zebec’s Tokenomics.
- White papers! I know, they’re pretty boring. But hey, if you’re looking to play it safe, pull up your sleeves and get to research!
When to call it quits with the project’s token?
If you don’t have enough information on the project or its tokens even after going through Research paths 1, 2, and 3, then it’s time to ditch that project.
