Investing in the cryptocurrency market can necessitate extensive research, a lot of time, and extreme caution to avoid falling victim to rug-pull scams or pouring your savings and hard-earned money into projects that will not kick off or “times X” anytime soon. 

The space is full of hidden gems and promising projects that seasoned investors know how to scout out in the shortest amount of time, with specific pointers that you can use to “DYOR” (do your own research).

Tools Needed For Quick Research

The internet has made things a lot easier. Numerous data collection and analytics platforms aid in organizing the majority of the needed information. These tools are essential if you want to conduct quick research without making costly mistakes. 

     1. Price-tracking Apps

Several detailed and data-heavy platforms are loaded with various types of cryptocurrency price information that is tracked in real-time. Such platforms can be intimidating for new investors who are unfamiliar with the terms and indices, but once you know what to look for, they become simple to use. Many investors prefer popular tracking apps such as CoinMarketCap and CoinGecko due to the volume of data and the scope of currencies covered.

You can use the tool to conduct quick research and verify: 

• Basic project summaries that can be found at the bottom of most coins and projects. 
• The price performance of coins, which is displayed over time (24 hours, 1 week, etc). 
• Market capitalization, circulating supply, and the current total number of coin holders.

       2. Coin Review Platforms

These platforms hire industry experts to identify new, emerging, and existing crypto projects for rug pulls, hacks, frauds, and faulty smart contracts. Sniffer is a well-known platform in this category. The tool evaluates Ethereum and Binance Smart Chain projects and displays vital information such as the contract code, creator’s wallet address, addresses of the top 100 holders, and other indices that can assist you in making informed investment decisions. Token sniffer also displays trending coins, the newest coins, and the latest scams and hacks on their website, as well as scam alerts on Twitter for users to act accordingly.

When using these tools, search for the project using the Contract ID rather than the project name to avoid investing in scams that duplicate original project names or projects with similar names to the one you’re looking for.

Indicators to Look Out For When Conducting Quick Research

While tools provide adequate data, they may not clearly state whether a project is a scam or will be very successful. There are additional indicators that you can quickly examine to make your own informed decisions. With this in mind, platforms like CoinMarketCap are safer places to get official links to projects you want to invest in, such as official websites and community pages.

       1. Project Website

The project’s website is a critical component that informs you about the project’s presentation, plans, and activity. At first glance, a rug pull project may appear to have a shabby landing page full of grammatical errors and generic designs and sections lifted from other projects. Before connecting your wallet to make any purchases, go over the sections and confirm that the website is fully functional.

       2. Whitepaper or Litepaper

A whitepaper is a lengthy, detailed, and technical educational paper that contains all of the essential details about a project. A litepaper, on the other hand, is simply a shorter version, usually a one-pager that includes important project information. These elements are critical, and the lack of them on a project’s website is a clear indication that you should proceed with caution when investing in such a project.

Reading a whitepaper can be exhausting, but it can be sped up if you look for answers to questions such as:

• What is the project’s purpose? 
• What are the project’s utility and use cases? 
• How are the tokens distributed? (Tokenomics) 
• What is the road map? 
• Who are the team members and partners?

      3. Project Team Members

Project leaders, community leaders, blockchain developers, marketing managers, and other team members all play a significant role in the project’s success or failure. As a result, it is wiser to invest in projects with doxxed team members so that you can verify their experiences and capabilities and hold them accountable when things go wrong. 

Team member information is typically included in the whitepaper or on the project’s website, but you can go a step further by verifying their portfolios on trusted career platforms such as CrunchBase and LinkedIn.

     4. Partnerships and Sponsors

Partners and sponsors of a project can speak to its authenticity and potential because investors such as Venture Capital do not want to tarnish their reputations by partnering with scam projects that cost people money or lose funds to projects that do not have the potential to yield returns. This is an important metric as well because having the right investors and partners can drive the necessary traffic, onboard more investors, and even influence price action. 

These collaborations can be verified by visiting the respective partners’ official blogs and verified social media handles. Brands would typically announce such partnerships and post about the project’s activity as it relates to them. Accredited crypto news sources like Investopedia, Coindesk, Decrypt, Cointelegraph, Yahoo Finance, and WatcherGuru can also confirm sponsor and brand involvement in the projects you’re looking into.

  5. Project Community

On CoinMarketCap, you can confirm the project’s social media handles and community pages, as well as their following and engagement on platforms such as Twitter, Discord, Telegram, and Reddit. Check the handles that the project follows and the people who follow them to see if the page is followed by known crypto enthusiasts and to ensure that it is not full of bots. Look out for the creators’ communication style, interaction with the community, and events such as AMAs, influenced activities, and partnership events. 

Finally, make sure that the overall comments and engagements are valuable and not bot content used as a ploy to make the project appear more active.

Disclaimer: This is not financial advice. This article was written solely for educational purposes only. The crypto market is still highly volatile so invest only what you can afford to lose and keep your sensitive information safe.