How to Check If a Project Is Real

Anyone can create a token in minutes. These checks take about fifteen and eliminate the large majority of what is not worth buying.

1. Does the product exist and does anyone use it

Not a roadmap. Not a demonstration video. Something working that people use.

If usage can be measured, measure it. Transaction counts and active users are published for most networks and protocols.

A token whose product is a plan is a bet on the plan arriving, which mostly they do not.

2. Who holds the supply

A block explorer shows the distribution across holders. Look at what share the top ten addresses hold, excluding known exchange and pool addresses.

If a handful of addresses hold most of it, the price is set by whoever has not sold yet. That is not fraud by itself and it does tell you the price depends on a small number of decisions by people you cannot identify.

3. What is the unlock schedule

Tokens held by the team and early investors usually unlock over time on a published schedule.

Supply arriving on a known date is the most price-relevant fact about most tokens, and it is almost never mentioned in the promotional material.

4. Is the contract verified

If a block explorer shows readable source code, anyone can inspect what the contract does. If it shows only bytecode, nobody can.

An unverified contract for a token being actively promoted is a deliberate choice, and it is sufficient reason to stop.

5. Who is behind it, and what have they done before

Anonymity is not disqualifying in this sector and it changes what recourse you have.

A team with a track record that can be checked is different from a set of first names and cartoon avatars.

6. Where does it trade, and how deeply

An asset whose liquidity sits on one small venue is one where an exit may not be available when you want it.

Check whether it is listed on established venues and what the depth looks like. Assets available on regulated platforms, such as a regulated exchange such as Collect & Exchange, have passed some review by a party with money at stake.

The honest note about the checks

They filter out the obvious problems. They do not identify good investments.

Plenty of projects pass all six and still fail, because the underlying idea was not something enough people wanted. That is an ordinary business risk rather than a fraud.

What these checks prevent is losing money to something that was never going to work at all, which is where most beginner losses come from.

The check that matters most

Can you explain what this does, in two sentences, to someone who does not follow this?

If not, you are buying because someone confident told you to, and that has a documented failure rate.