The cryptocurrency presales have already existed for many years. It is an effective way for a project to make itself known, but also to attract investors in order to be able to finance the entire development and therefore deliver the final product.
Nevertheless, it is also the door to many unscrupulous individuals who see the opportunity to make money by building a presale through many promises, an attractive project then disappearing into thin air once the total amount has been collected, leaving you no recourse except to learned a good lesson.
Thus, there is some points to analyze before embarking on the investment of a presale. These will never guarantee you profits or even that the project is completely reliable, but at least you will have exercised caution.
Take into account that in any case a presale can bring significant profits, but just as much bring heavy losses if it is not all the money you have invested in it. Therefore, be sure only invest what you can afford avoiding having too many expectations.
Red Flag #1: A presale without roadmap or whitepaper
The very essence of crypto presales is of present their project specifying the most details in order to convince investors. Of course, if it is a prototype or images for example are already visible, this reinforces the credibility of the team.
Thereby, le whitepaper it’s technically the bible of the pre-sales project. This is the first thing you should consult to get all the information and define if the project interests you, if it seems to convince you.
Likewise, la roadmap serves to indicate the time scale over which the project will be carried out and what the team has in mind. Imagine this a bit like the specifications to be respected.
Therefore, if a pre-sale does not have a whitepaper or a roadmap or both, you can have strong doubts on the nature of such a project who is not even serious enough to make the effort to write concise elements to present their project and the duration of its creation.
Likewise, the tokenomics should make sense. In the case of the cryptocurrency and in particular of the tokens the distributions should not be too high for the team just as if there is a blocking of the liquidity for the latter for one or more years this further proves that they are potentially serious.
Cryptocurrency investing is offered by eToro (Europe) Ltd as a PSAN, registered with the AMF. Cryptocurrencies are very volatile. No consumer protection.
Red Flag #2: No KYC and audit verified
There are platforms like CoinSniper or even a team like SolidProof which aims to verify the existence and the veracity of a project in presale to limit scams.
On the side of CoinSniper, this one lists KYC projects (Know Your Customer), that is to say that they will check if the members behind the project are indeed the people they say they are, if there is a semblance of consistency between what they announce and their ability to develop it.
Audits are now supported on CoinSniper 🔏
Add your smart contract audit on CoinSniper and stand out to investors!
— CoinSniper (@coinsniper_net) August 31, 2022
For example, a team that has worked on old successful crypto projects and is launching a new presale will have much more weight only strangers for whom we have no profile to determine their skills.
In the same way, SolidProof verifies the existence of the project (KYC) and also performs an audit in order to check if it is reliable in terms of security so as not to be destroyed by pirate intrusions in the space of a few hours. This makes it possible to testify to the existence of the project and its development.
Thus, one should not consider that because a project is verified by SolidProof and CoinSniper that it is entirely true and feasible, but at least that increases credibility of the presales team.
Red Flag #3: Project Team Communication
Convincing investors to buy during the presale means doing it through marketing by offering a complete white paper, a solid project, but also an active and attentive team. The majority of presales use social networks to inform, to reassure their investors.
So, if you find that you are having trouble communicating with the team, this may indicate an abnormality. Likewise, if messages on social networks are rare when the presale has just started or is still nearing its end, this is infrequent.
This may indicate a extremely small team or of a scam who does not care to inform since the project is false and only serves to steal investors’ money.
So be attentive to the way the team communicates a pre-sale and if they are accessible to help you, answer your questions or if you are facing a gigantic silent wall.
Red Flag #4: The social media craze
Social networks are the ideal place for the project team to communicate on their pre-sale, but also with their investors. So the number of subscribers could be an index of health of a pre-sale and potentially of its legitimacy.
Nevertheless, more and more pre-sales from a marketing point of view use bots to artificially inflate their number of subscribers or to post positive comments. This is understandably shady, although real pre-sales are increasingly doing this as well.
Take the time to analyze if there are bots on social networks and how much abuse there is in their use. Inflating the number of followers of an account to increase credibility is one thing, using bots on each tweet or YouTube video to put positive comments on it is much more negative.
In the same way, it is always useful to take the temperature on social networks or even Discord, Telegram. You will have interactions with other investors like you which can give you a general feeling about the state of the presale and if it is a scam or not.
Red Flag #5: broken promises
The advantage of a roadmap is that it allows you to define deadlines for the launch of part of the project or the next steps of the presale. Thus, one must be pay particular attention to these deadlines or any other promises the team may make to you.
Of course, there are delays, but if they happen repeatedly, there is probably something abnormal that should catch your attention and make you suspicious. Investor confidence is essential for the success of a presale, not to obtain the necessary money for the project, but above all over time so that investors maintain confidence and do not decide to sell everything a few days after the end of the presale. .
Thus, if the promises multiply and that no apparent result occurs, either the team in charge of presales is inexperienced, which leaves you the choice to trust them or not. Either it’s a scam that only tries to put smoke in your eyes without anything concrete.
Balance sheet, if you participate in a presale, assume that you will lose everything. Do not invest more than you can afford and above all be vigilant, take the time to analyze whether the project is solid, if it interests you and to take the general temperature with other investors.
There are a lot of pre-sales going on every week, but in the last few days if there’s only one that you shouldn’t miss, it’s Dash 2 Trade who exceeded the 2 million dollars in less than a week.