[GUIDE] Newbie guide: how to DYOR (and avoid wasting money on scams)?

[friends1980]

Especially for all new members who would like to know more about the (in)famous "DYOR" expression. Where to start, what to look at, what to follow, important threads etc. and avoid being scammed.

The one and only (short and easy!)
DO YOUR OWN RESEARCH / DYOR
checklist

Just follow this short list to get a serious indication if a project / coin / ICO [2020 edit: / DeFi] is real and no scam:

* SCAM ACCUSATIONS [2020 edit]

- check the Scam Accusations board, a subboard of the Trading Discussion which could easily be overlooked if you're new to this forum
- use the Google search function to search the forum for information on the project (simply search for the project's name)

* TEAM

- if team members are known, check their profiles and experience
- make sure they are real, existing people [+Fake Team Guide by Coolcryptovator - tip by hugeblack]
- if team members are anonymous, check if there's a specific reason why they remain anonymous (for ex. because it's an anonimity coin). If there is no reason: consider it as scam unless proven otherwise

* NEWS & DEVELOPMENT

- do a follow-up of the development on social channels. WATCH OUT for fake Twitter accounts (make sure you are on the correct account - double-check the name )!!!
- do not only read "official" channels but also external media to find out if the project is known to "the outside world"
- has there been no significant news of development for 4 months? Stop kidding yourself then.

* SUPPLY  

- from an investor's point of view: most of the time, the higher the supply, the lower the chance of extremely high prices. But exceptions exist of course, especially for really good projects, which might take giant leaps, even with a rather high supply. Exceptions are however... errrm... exceptional.
  [+Supply in a nutshell by 1mau]
- from an anti-scam point of view: a high supply could mean a malicious dev is planning to drop a high amount of his self-created coins on the market. By the time you realize that he is dropping his coins, he'll have run off with the BTC you paid for his scam coins, leaving you without BTC and with a big bag of his useless scam coins.
  [+Recognize premined coins by tranthidung]

* AIRDROPS

Man... Honestly, I think it's over. Airdrops are soooo 2017 and even back then, most of them were just dropping useless or scam coins. Either the airdropped amount is so low, they are not worth the effort. Or they want you to put something on your Facebook or Twitter or ... and then it's actually not an airdrop but a bounty. They just call it "airdrop" to lure people in.

Personally, I've not participated in any airdrop for months. It's a free country of course, but I would not waste my time on them. However, should you decide to participate anyway: NEVER EVER send coins to someone who promises that you will receive an airdrop in return, and NEVER EVER give your private key to anyone.

* SUPPORT / COMMUNITY

- check how many followers: on Twitter, FB, BTCtalk threads and so on. In most cases: the higher the support, the more lifespan is guaranteed.
- check how many (decent) exchanges are selling this coin: good liquidity means you should be able to buy this coin as easily as you could sell it - and the other way around. You have to respect market prices, of course, but you just don't want to risk being stuck with a coin.
  [+CMC Overview of exchanges and the coins they have on trade]

* THE PROJECT - OF COURSE

The most important thing. Just another payment coin? Just another gambling project? Real estate?

I mean: is it really an interesting project which has something new to offer?

Be realistic and ask yourself:

1. Is this what we (or some - enough people to keep it alive) have been waiting for? Gap in the market? Interesting project?
2. Does the fact that the project is created on the Blockchain create an added value?


Don't forget: NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE. If it looks to good to be true, it's not true.

[1714159500]

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[Harlot]

* SUPPLY

In most of the cases: the higher the supply, the lower the chance of extremely high prices.

But exceptions exist of course, especially for really good projects, which might take giant leap, even with a rather high supply. Exceptions are however... errrm... exceptional.

I don't think that the quantity of their supply indicates that their ICO is a scam or not. Yes it is a good indicator for its price movement but you are straying away from your "DYOR" Topic. You might want to change that into something about Developers offloading their own supply. Or their Token Share from the start, which is a good indicator, the more tokens allocated to their own means the more control they have on the market. Sometimes Altcoin developers/owners with a lot of shares in the token allocation tends to dump their own token for good, but it all still depends on the token we are talking about, because there are coins where the majority of the supply really needs to be with the developers.

[friends1980]

I don't think that the quantity of their supply indicates that their ICO is a scam or not. Yes it is a good indicator for its price movement but you are straying away from your "DYOR" Topic. You might want to change that into something about Developers offloading their own supply. Or their Token Share from the start, which is a good indicator, the more tokens allocated to their own means the more control they have on the market. Sometimes Altcoin developers/owners with a lot of shares in the token allocation tends to dump their own token for good, but it all still depends on the token we are talking about, because there are coins where the majority of the supply really needs to be with the developers.

Great input. I'll think about a way of formulating it understandably (I mean Newbie-wise). Any (other) suggestions? Would be great if we could make some kind of "ultimate" anti-scam guide for newbies.

EDIT: added a section about airdrops.

[HabBear]

I'll add an important one that everyone needs to be a

* LIQUIDITY

- does the ICO have support from any exchange?
- how quickly can you divest if you see price weakness on the horizon?

Owning an investment is valuable because (A) it can appreciate in value, and (B) you can sell it easily when you no longer believe it will appreciate.

[friends1980]

I'll add an important one that everyone needs to be a

* LIQUIDITY

- does the ICO have support from any exchange?
- how quickly can you divest if you see price weakness on the horizon?

Owning an investment is valuable because (A) it can appreciate in value, and (B) you can sell it easily when you no longer believe it will appreciate.

I agree completely. Sometimes it's so evident, one tends to forget. However, I added it under "SUPPORT". I am trying to keep it short, understandable, easy, blah blah. Just taking in account the 95% newbies with a very short attention span. Feel free to disagree and plz let me know.

[jakasantosa]

As a Newbie do not rush to get a coin. Learn first so know the rules play. Thank's this information is very useful for Newbie.

[oly4life]

thanks for this, its a great deal for me, had an experience after buying the coin, it was locked for going to 1 year and after a while the site wasn't forth opening again. It was an eye opening for me because I really put in enough for it. I had to learn in a hard way but all the same it thought a valuable lesson to always do enough investigation before you venture into an ICO

[friends1980]

thanks for this, its a great deal for me, had an experience after buying the coin, it was locked for going to 1 year and after a while the site wasn't forth opening again. It was an eye opening for me because I really put in enough for it. I had to learn in a hard way but all the same it thought a valuable lesson to always do enough investigation before you venture into an ICO

You wouldn't be the first one who got scammed in the beginning or got tricked in believing in some useless coin's potential by shillers who only want to sell their own coins for the highest possible price. These lessons sometimes can be very expensive... It's better to play around a bit with a very low amount, trying out several different exchanges before really investing in several different coins. Don't fall into the FOMO trap. As you can see: waiting has been a lot more interesting lately than buying...

[daobitcoin]

Thank you for sharing your experience. I totally agree with your opinion. And my experience to evaluate quality ICO projects is to see the idea of having projects that apply to life, having actual products, quality teams of projects. In addition, project news is updated daily so investors believe they are actually developing the project

[wvizmanos]

I tend to agree with the OP. Noting also the Airdrop thing, I don't believe in it anymore. I'd rather do the hard way (bounty) to get tokens.

[friends1980]

I tend to agree with the OP. Noting also the Airdrop thing, I don't believe in it anymore. I'd rather do the hard way (bounty) to get tokens.

I think that's a good attitude. Even if the project is trustworthy, the number of airdropped coins is generally very low.

With websites like icorating and icobench, you can quite easily check the quality of ICO bounty projects, to make sure you get the most out of your bounties.

[friends1980]

2020 DeFi scams are 2017-2018 ICO scams all over again... Time for a small edit and make-over of the original post. The basic message has hardly been changed at all, since the scamming methods haven't changed either.

Be aware that some people have expressed serious doubts about ALL DeFi projects, so keep your eyes peeled whenever you consider investing your hard-earned money in any of these projects.

[hugeblack]

A good list of steps to follow, but you did not teach beginners how to do the research, it is easy to say to verify the team, but it is difficult to determine whether the team is scam or real, except by using some techniques, so it is better to add how newbie can search by himself.

[Guide] Prevent scam!!! Some useful tools for find scam / fake ICO team

You can also add a few things to research about word plagiarism, intellectual property, website template theft, and promises that look good to be believed.

[friends1980]

A good list of steps to follow, but you did not teach beginners how to do the research, it is easy to say to verify the team, but it is difficult to determine whether the team is scam or real, except by using some techniques, so it is better to add how newbie can search by himself.

[Guide] Prevent scam!!! Some useful tools for find scam / fake ICO team

You can also add a few things to research about word plagiarism, intellectual property, website template theft, and promises that look good to be believed.

I was hoping to make a nice mix between DYOR and scam prevention, but somewhere along the way, the thread bled to death, although I thought I wrote it in an understandable and accessible way if people remain indeed interested, I'd be more than willing to re-edit it further.

Thx for the great tips.

edit: will work on edit from OP, whilst trying to keep it as short and accessible as possible

[Krislaw]

Right now it's hard to check if the project is fake or not, they do it now professionally take SUSHI for example you can't even recognize that that is a exit scam it's even listed in Binance, it's inevitable even though you're being careful, there are a lot of factors to consider. I suggest to create another thread maybe try working on how the pump and dump works, or how the token is being manipulated or how to know if a token is an exit scam something like that.

[CryptocurencyKing]

I mean, I agree with you completely on the airdrop and supply aspect. I mean, that's what most of these series of project owners do and they are really getting away with it in because, most users haven't gotten the idea to detect that which is legit and they always come up quite often than you can imagine.
For me, I recommend going with the pros for status. By that I mean, you asking questions and following the predictions of more experienced users in the forum on coins with potentials. You can get this informations on the local boards too as a few users does discuss these issues too. Otherwise, I'll prefer you stick to the already trailing coins like BTC, your safer that way.

[1miau]

* SUPPLY

- from an investor's point of view: most of the time, the higher the supply, the lower the chance of extremely high prices. But exceptions exist of course, especially for really good projects, which might take giant leaps, even with a rather high supply. Exceptions are however... errrm... exceptional.
- from an anti-scam point of view: a high supply could mean a malicious dev is planning to drop a high amount of the coins he created himself on the market. By the time you realize that he is dropping his coins, he'll have run off with the BTC you paid for his scam coins, leaving you without BTC and with a big bag of his useless scam coins.

Important point.

People should know how many coins will be in circulation in 5 or 10 or 20 years because it's very important in the long run. To find that out people should know the meaning of the different terms:

(1) circulating supply = coins in circulation, this number is used to calculate the marketcap: coins in circulation x price per coin = marketcap
(2) total supply = (1) + coins currently locked (team / investors)
(3) max. supply = (1), (2) all coins including coins which are still to be mined / staked if PoS coins have such a cap, otherwise it's also (4)
(4) infinite supply (not directly mentioned at Coinmarketcap) = there is no cap currently

While Bitcoin is limited to 21M (max. supply), Ethereum for example hasn't a max. cap yet, so it is "infinite supply". Make sure to check every coin where you are interested to invest carefully. Many shitcoins use this metric to deceive users.





Many PoS shitcoins are still in an early stage and very inflationary compared to Bitcoin. People should keep that in mind when buying them.

In addition, many new PoS shitcoin haven't many of their coins into circulation yet, for example Algorand. Currently, only 1,000,000,000 coins of 10,000,000,000 are circulation, that means 90% will still come into circulation and be added to the total marketcap after some time. Right now, Algorand has a marketcap of 400,000,000, which means the real marketcap with all coins into circulation is already 4,000,000,000. That is a huge difference.

[tranthidung]

Excellent explanation post, @1miau!

[Guide] Identify scam projects by hidden premined coin indicator via explorer

That thread was made in 2019, with the trend of stake & masternode coins. I can not count how many of them are scam. The value of the thread has still been here. Let's check the block explorer of SUSHI and review what happened last 2 day.

What SUSHI developer did is a shame and they moved huge tokens but in some other cases, scam developers move their coins or tokens gradually and you might not notice. Personally, I always check block explorers and investigate movements of big addresses before I consider to invest.

https://coinmarketcap.com/headlines/news/sushi-crashing-over-50-as-sushiswaps-lead-developer-sells-his-tokens/
https://www.theblockcrypto.com/linked/77090/sushiswap-founder-converts-portion-of-developer-fund-to-6m-in-eth

[friends1980]

(...)
People should know how many coins will be in circulation in 5 or 10 or 20 years because it's very important in the long run. To find that out people should know the meaning of the different terms:

(1) circulating supply = coins in circulation, this number is used to calculate the marketcap: coins in circulation x price per coin = marketcap
(2) total supply = (1) + coins currently locked (team / investors)
(3) max. supply = (1), (2) all coins including coins which are still to be mined / staked if PoS coins have such a cap, otherwise it's also (4)
(4) infinite supply (not directly mentioned at Coinmarketcap) = there is no cap currently
(...)

[Guide] Identify scam projects by hidden premined coin indicator via explorer

That thread was made in 2019, with the trend of stake & masternode coins.
(...)

Top-notch input, guys. I've integrated your posts in the original post. I'll try to cut up my OP a bit in the next days, to make sure there's not too much text.

[friends1980]

Keep your eyes peeled, people, many reports of scams and ponzis lately... Member qwertyup23 created a nice thread recently containing an overview of recent scam projects.

Check them out also before investing any money in a new project.