Scams cost crypto users billions every year. Fake tokens, rug pulls, and phishing attacks are everywhere. This guide teaches you how to verify tokens, spot red flags, and protect your funds.
The Most Common Crypto Scams
- Fake Tokens: Tokens with identical names but different contract addresses
- Rug Pulls: Developers drain liquidity and disappear
- Honeypots: Tokens you can buy but can’t sell
How to Verify a Token
- Get the contract address from official sources – Never from random messages
- Verify on block explorer – Check for verification checkmark
- Use Token Sniffer – Check contract safety score
- Check DEXTools – Review liquidity and holder analysis
Red Flags Checklist
- Can’t find contract on CoinGecko/CoinMarketCap
- Contract not verified on Etherscan
- Top 10 wallets hold more than 50% of supply
- Liquidity not locked
- No sell transactions on the chart
- Anonymous team with no track record
- Promises of guaranteed returns
Key Takeaways
- Never trust contract addresses from unofficial sources
- Use Token Sniffer and DEXTools before buying new tokens
- Check if liquidity is locked and for how long
- Use a separate wallet for risky trades
- If something seems too good to be true, it’s a scam