The craziness with all the memetokens, charity tokens, redistribution tokens and what not has given rise to a plentitude of scams which are very easy to fall into.
What are some of the things to look for?
Is the token just a clone of a similar token ? (When are we going to run out of dog goins?)
Is there a website for the token? Does it have any information other than the absolute minimum information that every other website has?
Are there any disclosed team members? Pictures, linkedin links, can you get in touch with them over social media? The fact that they quickly reply doesn’t guarantee though that in a couple of days from starting they will not run away though.
Does the project actually try to solve a problem, offer a service, does it bring any potential innovation? Or is it just one more roulette style moonshot money redistribution idea?
How does the price graph look like
Does the graph look natural with ups and downs? Be careful about coins that made a single huge spike at launch and then they went towards the bottom and stayed there. Make sure to check the graph in the coin that the new token is pegged to. For example check the coin versus BNB / ETH and not just vs USD. You could see the USD price fluctuate due to the BNB/ETH price even if the token is a honeypot and users never actually sell.
Amount of issued tokens and burn percentage
Did the creators of the token create a huge amount of tokens and then burned most of them to make it look like they only own a tiny amount?
Are there trillions of tokens to make the price look small and hard to track wallets or are there a decent amount of tokens to make anyone’s life easy?
Is there a decent amount of liquidity when the project starts? If it’s day 1 it will not be a big liquidity but the developers should have put at least some of their money in.
Is the liquidity locked? Use the scanners to check if the contract has it’s LP-tokens (Liquidity pools loken) mostly locked. Any one can add more liquidity not just the creators of the token, but overall you should see a good amount of tokens locked and no unlocked wallets holding most of the liquidity pool.
Take care that developers usually split their holdings to hide actual ownership.
As with LP-tokens, developers of tokens usually break their tokens into many wallets to hide how much they actually hold. Are there any wallets declared and are there any undeclared transactions made out of those wallets?
Check the balances of token holders using bscscan explorer and see if any of them have significant amount of tokens. They’re likely to dump a huge load of tokens into the liquidity pool and run away with your BNB/ETH.
Check that the contract code on BSC is visible and that the transfer and transferfrom functions look ok. At least ask a friend to look at the code. Honeypot tokens disable the sell of tokens and your BNB/ETH will be lost. If there is no code, run away!
Fresh projects can easily buy thousands of users, it cots about 1$ per 1000 Telegram users. Interact with the community, see how the community is involved in the project. Do a basic google search, check the BSC comments section on the token to see if anyone reports any problems with the token.
Consider checking the token that interests you on https://tokensniffer.com
Some of the scams are reported on their website.
Do you find this post helpful?
What other signals / red flags do you look for before investing in any project?