How to tell if a coin is a red flag

Ladies and gentlemen, welcome to the last episode of Crypto 101 series.

(… finally for now. Perhaps 👀)

We have already covered the basics: Different ways of trade,, where to tradeand where to store their coins.

But it still leaves one big question: How to figure out what to actually buy?

Which is exactly what we look at today. We clinch 👇

Purchase of cryptocurrency is not just guessing what will increase. It is about understanding What do you buy – and why People could consider it worth it.

So, if you do not want to be rough on the first day, it is worth asking yourself these questions before you invest in the project:

1/ What is the coin doing?

Is this token useful or is it just … there??

You want a clear purpose. For example:

• Eth Authorized smart contracts on Ethereum;

• Univen Allows users to vote on changes to the Uniswap protocol.

To find these things, Check white project paper. You don’t have to read every word – enough to find out:

What problem do they solve? How? Is their solution unique, useful, or is it already done elsewhere?

If the project itself cannot respond clearly, That’s a 🚩

2/ Who built it – and are they legal?

The team behind the project can make a big difference.

Of course, there are some anonymous devils that built incredible things, But you often want to see Real names with real experience.

Make some digging. What were they working on before? Do industrial connections have? Are they supported by the famous VC or integrated into other platforms?

For example:

• Saltworks Former Qualcomm engineers began;

• Polygon There are partnerships with giants like Reddit and Disney.

If all you find about the team is a vague website, a generic folder of the road and a Telegram group led by someone named “CryPToking420” – – That’s 🚩

3/ How does tokenomics work?

Tokenomics – or token economy if we talk about full government names – It is basically structured with a crypto token.

These things are important too a lot. You could have the smartest project ever, but if the token model makes no sense, it can still be falling apart.

Here are some things worth checking out:

👉 Is there a maximum supply?

If not, new tokens can be forged infinitelywhich could increase the stability of the price of supply and influence over time.

Limited supply (like Bitcoin’s) helps to limit inflation.

👉 Who holds most of the supply – Early investors, devils or communities?

If most tokens hold insiders or early investors, there is a risk of being rejected later and demolished by the price.

Even distribution reduces this risk and shows stronger community support.

👉 How are new tokens publish?

Projects often have “determination arrangements” that unlock the tokens over time.

If a mass unlock arrives soon, it could overwhelm the market and pull the price, especially If insiders choose to sell.

👉 And finally, Why would anyone want to keep this token in the long run?

Does access to features, voting rights, investment rewards, discounts? Or it’s just something people buy only Because they hope that will be the moon?

If there is no powerful case of use or reason to hold, long -term demand may be limited – and without demand, prices usually do not tolerate.

Tl; Dr: If the token has an unlimited supply, without a case, mostly held by a small group of early customers – it is not a long -term investment. It’s a pump setting and a landfill.

Strong tokenomics will not guarantee success, but bad often leads to failure.

4/ What do market measures say?

Some basic numbers can offer an additional context:

👉 Cap Gives you a rough idea of how big (or risky) a project is.

👉 Volume shows how to actively trade token.

👉 Liquidity She tells you that you can easily move in and go out without too much effect on the price.

The token with good market measuring data is more sustainable in the long run.

5/ Is technology really good?

This part is too often overlooked. But if you are going to invest in token, you should know if it is built on a solid ground.

Start by watching Technology fundamental::

What kind of blockchain is that? Can it be scalved? Is it safe? Was it hacked before – and if so, how did the team answered?

Another advice: Check How often the project is updated.

Is Github active? Do developers still build?

Silent Repo = Peaceful Project = probably not what you want.

Take PolcadotFor example – it was built for flexibility and safety, with a consistently active devil. Such constant progress usually reflects long -term commitment.

6/ What is a community vibration?

Crypto is not just the code – these are people.

A strong, engaged community that is not a bot can trigger adoption and build trust.

Look for:

👉 Activity to Discord, x, Reddit;

👉 Real discussions (not just “wen moon”);

👉 Initiatives or suggestions of managing the guided community

Token with a strong community behind it can have more support and retaining power.

7/ Are there regulatory risks?

Not a fun part – but still important.

Be careful about whether a token can be considered certainty in the US or elsewhere. Does the team work transparent? Do they try to actively adhere to the regulations? Are there any lawsuits, prohibitions or investigations in the main markets?

You don’t need a degree, but if something looks shady, it’s worth being careful.

So yes, reading coins is not just checking the scales – but about a little digging. And if you have not looked at the basics, you are probably making a bet rather than a informed decision.

Asking the right questions gives you more context – and it can be useful no matter what the market is doing.

Oh, and before you go – If you liked this week’s beginner failures, answer or tap that evaluation button below to let me know. I could cook something similar in the future 👀

Have a cold weekend, don’t rough, and see you on Monday with a usual format!

You are in knowledge now. But think about your friends – they probably have no idea. I wonder who could fix it … 😃🫵 Expand the word and be a hero you know you are!