One of the easiest way to make fortune out of investing in cryptocurrency is to be an early investor in a promising cryptocurrency. With launchpad sites like http://pinksale.finance , https://theqube.cc/ , https://awesomepolygon.com/red-kite-launchpad/ , https://www.polkastarter.com/ , and https://unicrypt.network/ , Finding the next 100x GEM can be both promising yet difficult to navigate the SWAMP and avoid being scammed.
To find such early yet promising projects, you need to do through analysis and research of token fundamentals. There is simply a ridiculous number of tokens being released every day and it becomes exceedingly difficult to get all the information that you need to look at before buying. As a result, you end up relying on the partial information shared by the coin (token)developers in their marketing posts or manipulated comments on reddit, telegram and discourd forms. The result, you become the victim of pump and dump cryptocurrency AKA RUGPULL. Not only you lose your investment on these scam coins, but it also degrades our trust in cryptocurrency in general.
Learn how to thoroughly vet a project with some simple steps and free tools.
- Locate the tokens contract first and enter it into a research tool
- MarketMove.Ai
- Mudra Research Tool
For the purpose of this tutorial we will focus on WHAT to look for in a tokens contact to determine whether or not it was designed to SCAM you out of your hard earned money. Later Tutorials will focus on how to use the individual tools or you can visit the respective websites and view documentation.
Token Ownership tells whether there is any owner with special privilege’s over the token or whether it has been renounced by assigning contract ownership to a burn address. A burn address is an address to which you can send assets, but from where they can never be recovered because there is no private key corresponding to that address. So it literally “burns” the assets. While renouncing ownership is good practice, developers can still hardcode privileges into their token contract .
Token Burn – this is a percentage reduction feature that removes a certain supply of the token out of the contract by transferring it to a burn address. When a developer burns tokens it is a good sign because they reduce their share and minimize the likelihood of a dump (AKA DILUTION).
Liquidity Pool Value – also know as LP. Is the value of the tradeable asset in terms of USD. It is important for a newly release coin because it helps facilitate trading over an exchange like pancakeswap, uniswap or sushiswap. Developers have to create a liquidity pool by pooling BNB or some other coin which has value. It represents an investment commitment from the developer. A liquidity pool of $100,00.00 USD or more worth of BNB is a good sign that the project has at least some substance backing it.
Liquidity Pool Token Allocation – This is the percentage of “tradeable” token supply allocated to the liquidity pool. After releasing a token the developers own the entire supply. Liquidity Pools allow digital assets to be traded in an automatic and permission less manner.
In an attempt to make the “outside” look safe, developers will sometimes distribute the token supply over multiple wallets with no whale (a wallet holding >= 5% of the available token supply) visible in the holders list. If a high percentage of “tradable” token supply is allocated to LPs, developer share is reduced and they cannot benefit from dumping their share. For newly released tokens, LP token allocation should be as high as possible, meaning greater than 80%.
Locked Liquidity – is the percentage of liquidity locked today so that the developer cannot “rug pull” or width draw the liquidity (money) from the exchange (pancakeswap, uniswap, ect..) and run away with your money! Developer’s should renounce their right to width raw liquidity by locking their LP tokens in a timed lock contract. Use of a well established third-party locker inspires confidence rather than a “custom” developed locker contract.
Locked Liquidity Time – this value basically indicates the percentage of liquidity that is locked up and for HOW long it will be inaccessible by the developer. Generally if more than 50% remains locked after one year you can bet that this developer is serious and is not intending to scam you immediately of your hard earned cash!
Hopefully these metrics and definitions will help you understand what to look for when researching for your next 100x Crypto GEM that can make you a fortune. If you have any questions or comments please don’t hesitate to ask me a question. I can be reached at ramon@eyeownu.com