For me it’s insanely high staking APY with no real volume or utility behind it. Feels like a lot of projects rely purely on hype cycles instead of building something sustainable.
Curious to hear what others think.
What’s the biggest red flag you see in new crypto projects right now?
byu/Qq40437213 inCryptoMarkets
Posted by Qq40437213
3 Comments
High staking APY with no volume is a good one. The math only works if new money keeps coming in faster than yields are paid out. When it stops it unwinds fast.
The one I watch most closely right now is token unlock schedules. A lot of projects launch with impressive price action then quietly have 40 to 60 percent of supply locked for team and early investors unlocking 6 to 18 months post launch. The retail buyers at launch are essentially providing exit liquidity for people who got in at a fraction of the price. It is not always malicious but the incentives are misaligned by design.
The other one is projects that lead with the token before the product exists. If the first thing you hear about is the tokenomics and the APY and the roadmap has the actual product launching in Q3 next year that is a red flag. Real projects build first and token second or at least simultaneously.
Liquidity concentration is worth checking too. If 80 percent of the liquidity on a DEX pool is from 2 or 3 wallets the price can be moved or the pool can be drained whenever those holders decide to leave. Easy to check on chain and most people never look.
The sustainable projects I have seen long term are the ones where you can answer the question of who uses this and why without mentioning the token price.
Anonymous deployer wallet that’s launched 3+ tokens in the last 30 days, that’s the single biggest tell before you even look at anything else.
High APY is a close second but at least that’s visible. Serial ruggers are the ones that actually hurt
Crypto is mostly pure hype. A utility are stablecoins only, people actually use them. The rest, nada