Essential Tips to Avoid Common Pitfalls on-chain
As Bitcoin halving approaches, the cryptocurrency market is witnessing a significant upsurge, characterized by increased traffic and investment inflows. This surge has propelled Bitcoin's market capitalization to unprecedented levels, reaching $1.4 trillion and surpassing the silver market to rank 8th in the Global Assets Ranking. With the crypto gaining momentum, more and more investors are considering figuring out some opportunities on-chain, especially Solana ecosystem projects related coins. However, how to avoid pitfalls, how to identify whether the contracts have vulnerability or unsafe practices, which is the key to achieve profitable. In this article, I will show you essential tips to avoid common pitfalls on-chain.
Key Strategies for On-Chain Safety
- Verify Contract Addresses：Every blockchain has its native ecosystem explorer scan, like Solana has Solscan, Ethereum has Etherscan, Bitcoin has Explorer.btc, etc. So when you get a new coin, you don't know if this project is a scam or not, you can copy the contract address, then paste into a corresponding explorer scan, reading its information and figuring out whether the codebase is open-source or not. If it isn't, stop your investment behaviors, please keep in mind.
- Assess Holder Count: If the number of holders is more than 100, it seems like this project is relatively true. Obviously, if the number of holders is less than 100, even less than 20, you can check it carefully about the addresses on buy and sell page. Dramatically, a scam project's price will run as several addresses, the buying orders are all from a same address, which is pretty common, but crypto beginners are often fooled because they don't have much time to check carefully when they are in FOMO(Fear of missing out) mood.
- Evaluate Official Resources:No matter how new a project is, it will has official website or community Twitter account. This is also an indicator to judge. Supposing a project is pretty new, which even has been created, it doesn't have official website, you can search related key words in social media like Twitter, Facebook an Telegram, if nothing can be searched, watch out, please.
- Private Key Security:Researching the contract address information, confirming if the address has a corresponding private key, and whether the program is verified or not. When the contract address has a corresponding private key, it means corresponding project can be controlled by someone, thus it can be definitely proven as a scam.
On-Chain Tools for Due Diligence
Conclusion:
Navigating the crypto market requires meticulous research and due diligence. The strategies outlined above aim to safeguard investors from common pitfalls, ensuring a more secure investment journey. Remember, this guide is for educational purposes only and not financial advice. Always conduct thorough research to make informed investment decisions in the dynamic world of cryptocurrency.
Disclaimer: And as a final reminder, this is not financial advice and it’s just for educational purposes only. Please do your own research and find out what investments are best for you. Cheers everyone! In the promising crypto world.
