Red flags: Here’s what investors know before putting money into crypto projects, says Vadym Synegin of WeWay.
The demand for crypto projects soared in early 2021, and it shows no signs of slowing down despite the current bearish market. Top-tier companies including exchanges such as Binance and FTX are building new products to attract the general user and investors into the cryptocurrency and blockchain world.
There’s a lot to choose from in the DeFi ecosystem — Non-Fungible Token (NFT) projects, decentralized finance (DeFi) protocols, GameFi, metaverses, and more.
But often, investors don’t have the proper guidance when investing in cryptocurrency projects, and this lack of knowledge poses a risk for them. With so many options and information out there, it can be overwhelming even for the most experienced crypto trader. Another problem is that the crypto space is plagued with malicious scammers looking to trick newcomers.
Red Flags: Investing in Crypto Projects
In this section, there are a few tips on how to identify a profitable project, and which ones are outright scams. First of all, investors need to choose carefully which projects to invest in as there are lots of risks coming into play.
As the name suggests, the DeFi ecosystem is not regulated. Anyone can start a crypto project by creating a token in a decentralized exchange (DEX) like Uniswap and sell it to the community. Even if the project has no real value, i.e. it doesn’t offer anything unique…
