Lately, in the bull run, there had been a number of scam coins, crypto influencers also promote them hence a number of innocents long them and the project gets rug pulled.
In this article I’ll explain how to recognize a scam coin with these few easy-to-follow steps, you don’t need any technical or coding knowledge for this.
The example coin
We are going to use a coin called MotherDoge as an example. Note that we are NOT saying that this coin is or is not a scam coin, we just picked it because it flags up some useful metrics I wanted to discuss.
Also Read: UK Officials Seize $408M Worth Of Cryptocurrency In Money Laundering Investigation
This is always my first stop, you can quickly find out if a coin looks legit using the “Smell Test”. Any red crosses is an instant no for me.
We can see here that this coin has an ‘X’ showing that there are prior similar contracts. So we scroll down to investigate further
And we can see there’s a quite load of nearly identical contracts.
Score: shows how similar with 1 being almost the same. This coin has many others with > 95% similarity.
Deployed: shows that these similar contracts are being released almost daily. High frequency could indicate a team re-using their code, either way, a red flag.
If we are lucky, our coin has been audited already by an auditor you trust.
I won’t post an image as the website is pretty self-explanatory, they flag up any errors and discuss everything in lay-mans terms.
Click on any of the scores for more details on what you are getting yourself into.
Don’t be put off by the name, this site is incredible for quickly assessing coins.
(1) Total supply.
As a general rule, if this has 4 or 5 sets of zeros (i.e. a trillion or a quadrillion coins) I will not touch this. The only benefit to having that many coins is to keep the price low and con people into thinking they have a good deal, which is why this coin is trading at $0.000000000009303.
(2) Warning about unlocked wallets holding large amounts of the supply.
This means there is a whale with the freedom to rug-pull you at any time. Avoid at all costs. CoinBureau(YouTube) recommends avoiding any coin where a whale holds 10% or more.
Has a bunch of additional tools for checking the coin such as RugCheck, which will show you what the owner’s wallet has been up to.
You can also check how many people hold the coin and what percentage they hold by clicking ‘Holders’ on poocoin, which takes you to the correct page on the BscScan website.
(Ignore the dead coins wallet, which is sometimes displayed as Burn Address or 0x000000000000000000000000000000000000dead)