Encryption investment warning guide: If you see these 3 warning signals, please stop loss and exit immediately.

Author: The Decentralized Finance Investor

Compiled by: Tim, PANews

A few weeks ago, I talked about the qualities I pay attention to in crypto projects.

But later I realized that I had never specifically written an article to tell everyone which warning signs indicate that you should not invest.

In the past few years, failed protocols have shown the same warning signs. Therefore, in this article, I would like to introduce several key warning signs from my observation checklist.

1. Continually attacking competitors

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

"I will personally put an end to DAI."

Ironically, the UST stablecoin of Terra Luna collapsed a few weeks later, while the DAI stablecoin remains intact to this day.

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

However, his arrogance and excessive confidence led him to ignore these concerns, failing to address these issues, ultimately causing UST to experience one of the most severe collapses in cryptocurrency history during its decoupling from the dollar.

What can we learn? Invest in projects with teams that are humble, pragmatic, and willing to listen to community feedback.

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

2. The team flaunts wealth on social media.

If the founder of the project you invested in is enjoying themselves in Dubai this week, then heading to a casino in Monaco next week to splurge, and then off to vacation in France, then my friend, I’m afraid there’s some bad news regarding your investment.

Many protocols that were very successful in 2021 are no longer active today because their teams lost the motivation to work hard after achieving success.

How did I notice this? Usually, I pay attention to these aspects:

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

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

The posts released by the project party are like "Tianshu", full of popular terminology.

Have you ever read a lengthy article about a certain protocol, only to feel like you didn't understand anything in the end? I've encountered this situation several times.

This is not because I do not understand the meaning of certain words, but because the purpose of this article is to attract the public with fancy language, persuading them to buy tokens, rather than truly providing useful information.

My suggestion 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 understanding how a particular protocol actually works, then you are likely not to lose money because of it.

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

It is certain that if you want to invest successfully, you need to have a keen ability to discern the true from the false.

I would even dare to say that among the projects launched today, over 95% 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, you just have to be careful in choosing the tokens you want to buy.