Author: The DeFi Investor

Translated by: Tim, PANews

A few weeks ago, I discussed the traits I look for in crypto projects.

But then I realized that I had never specifically written an article to inform everyone about the danger signals that indicate you should not invest.

The failed protocols of the past few years have exhibited the same warning signs. Therefore, in this article, I want to introduce several key warning signals from my observation checklist.

1. Constantly Attacking Competitors

Those of you who have been in the crypto space for a few years may remember the famous tweet from Do Kwon (founder of Terra) in 2022:

“I will personally end DAI.”

Ironically, Terra Luna's UST stablecoin collapsed just weeks later, while the DAI stablecoin remains intact to this day.

In hindsight, the collapse of UST was not because Do Kwon was an arrogant cult leader. However, many people pointed out before the collapse that UST's economic model was unsustainable.

Yet, his arrogance and overconfidence led him to ignore these concerns and fail to address the issues, ultimately causing UST to experience one of the most severe crashes in cryptocurrency history when it depegged from the dollar.

What can we learn? Invest in projects where the team is humble, pragmatic, and willing to listen to community feedback.

Ethereum, AAVE, Hyperliquid, Pendle, Uniswap, and almost all leading projects in the field have leaders who are very humble and low-key; I rarely see them attacking others.

2. Team Members Flaunting Wealth on Social Media

If the founders of the project you invested in are partying in Dubai this week, gambling at a casino in Monaco next week, and then vacationing in France, then my friend, I have some bad news about your investment.

Many protocols that were very successful in 2021 are no longer active because their teams lost the motivation to work hard after achieving success.

How did I notice this? Typically, I pay attention to the following aspects:

• The project founders or team members are very active on social media and show great enthusiasm for the project's direction.
• You have never seen posts or photos of the project team flaunting a luxurious lifestyle on social media.
• The team consistently delivers quickly and keeps their promises.

If the project you are optimistic about is performing contrary to expectations, then you may need to reconsider your investment choices.

3. Posts from the Project Team Read Like “Heavenly Books,” Full of Buzzwords

Have you ever read a long article about a protocol but ended up feeling like you understood nothing? I have encountered this several times.

This is not because I do not understand the meanings of certain words, but because the purpose of the article is to attract the public with fancy language and persuade them to buy tokens, rather than genuinely providing useful information.

My advice is to stay away from these flashy projects.

If a project's vision is unclear, and you need to spend more than 5 to 10 minutes to understand how a protocol actually works, then you are likely to lose money.

The most successful products are usually created by teams that can explain their functions in just a few words.

It is certain that to invest successfully, you need to have a keen ability to discern truth from falsehood.

I would even dare to say that more than 95% of the projects launched today have the sole goal of making as much money as possible.

Does this mean you can no longer make money through cryptocurrency?

Of course not; it just means you have to be careful in choosing which tokens to buy.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。