Basic Things to Look Out For Part 1

Publish date: Nov 9, 2021

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Basic Things to Look Out For Part 1

Are you new to the Binance Smart Chain world? Confused about how to go about aping into projects? We are here to provide a list of things that you could look out for.

Keep in mind that this is not financial advice. Anything can rug, so be careful and only invest in what you can lose.

Always ensure the contract is verified

Without contracts being verified, the community will not be able to review them in advance; in addition, your fund might be in danger because you will have no ideas what the contract will do to your fund.

Unverified contract is dangerous because they can have blacklists, high taxes, or issues with the contract that disallow sell or accidentally honeypot the project.

For example, a project called, EcchiCoin, actually launched and soon realized that there were issues with the contract that prevented everyone from selling. The community was not able to help because the contract was unverified.

Sure, a coin that has unverified contract can moon or has a lot of popularity; however, most unverified contracts rugged.

Verified contract has a checkmark and will let you or the community review the source code

You can enter the address of the token on BSCScan to view whether a contract is verified or not.

Check the list of holders to ensure the developers do not have excessive unlock tokens

Are you ready to ape into a presale? Be sure to check the list of holders to make sure the developers lock their tokens.

Unicrypt platform does this pretty well–it shows you that what would be the price impact if developers dump the unlocked tokens into the liquidity pool. Below, we have a project that has -100% price impact. Meaning that the devs could drain the liquidity if they dump their unlocked tokens resulting in rugging the project

-100% price impact. Meaning that the devs can drain the liquidity if they dump their unlocked tokens.

On the other hand, we have a project that has 0% price impact. Meaning that the devs does not have tokens to dump on the projects. The only ways that this project could rug would be if the contract has a mint function that would allow the devs to create more tokens and dump on the liquidity pool OR the presalers dump their tokens altogether. Generally speaking, 0% price impact is good!

I don’t use Unicrypt. How do I check on BSCScan?

You can check the list of holders by going into BSCScan, search for the tokens, click on the name of the tokens, and then click on the Holders tab.

Note, you might say that there are projects that moon even with unlocked wallets. Sure. We recognize that; however, you’d better off demanding the developers to explain what the unlocked wallets are for instead of aping into projects blindly.

Learnings

Demand the devs to verify their contracts prior to launch.
Demand the devs to explain the unlocked wallets are for?

Disclaimer: Not financial advice. Do your own research.