New tokens launch every day—some become blue chips, most go to zero. This guide teaches you how to evaluate new token launches before putting your money at risk.
Types of Token Launches
1. Airdrops
Free tokens distributed to users who meet certain criteria.
Risk level:
Low (free money)
Your cost:
Time and gas fees
Key decision:
Sell immediately or hold?
2. Fair Launches
No pre-sale, everyone can buy at the same time.
Risk level:
Medium-High
Your cost:
Capital at risk
Key decision:
Entry timing and size
3. IDO/ICO (Token Sales)
Early investment opportunity before public trading.
Risk level:
High
Your cost:
Capital locked, often with vesting
Key decision:
Whether to participate at all
4. Points-to-Token Conversions
Farming points that convert to tokens later.
Risk level:
Variable
Your cost:
Capital at opportunity cost
Key decision:
Is the expected airdrop worth the capital lockup?
Pre-Launch Evaluation
Step 1: Understand the Project
What does it do? Clear use case or vague promises?
Is there a working product? Or just a whitepaper?
Who uses it? Real users or just airdrop farmers?
Why does the token need to exist? What’s its utility?
Step 2: Research the Team
Who are the founders? Doxxed or anonymous?
What’s their track record? Previous successes or failures?
Who are the investors? Reputable VCs or unknown?
How transparent are they? Active communication?
Step 3: Analyze Tokenomics
Check
Green Flag
Red Flag
Team allocation
10-20%
>30%
Vesting period
2-4 years
<1 year or none
Community allocation
>50%
<30%
Circulating at launch
20-50%
<5% or >80%
FDV vs. raise
Reasonable ratio
10x+ overvalued
Step 4: Check Security
Is the code audited? By whom?
Is the code open source? Can you verify it?
Bug bounty program? Shows security commitment
Multisig controls? Or single admin key?
Launch Day Evaluation
Immediate Checks
Verify contract address: Only from official sources
Check liquidity: Is there enough to trade?
Run through Token Sniffer: Any red flags?
Check holder distribution: Concentrated in few wallets?
Look for sell transactions: Honeypot check
Price Action Patterns
Pattern
What It Might Mean
Immediate 10x pump
Likely to dump hard—careful
Gradual climb
More organic demand
Instant dump
Insiders selling, avoid
Stable then pump
Accumulation happening
Red Flags Checklist
Avoid If You See:
Anonymous team with no track record
Promises of guaranteed returns
Pressure to buy immediately (“launching in 5 minutes!”)
No working product, just promises
Copied whitepaper or documentation
Unrealistic tokenomics (90% to team, no vesting)
No audit or audit from unknown firm
Aggressive paid marketing (influencer shilling)
Too-good-to-be-true yields or returns
Contract not verified on block explorer
No liquidity lock
Disabled selling (honeypot)
Airdrop Evaluation
Before Claiming
Verify the airdrop is real: Check official channels
Never connect to random sites: Phishing is common
Check claim contract: Verified on block explorer?
Understand tax implications: Airdrops are often taxable income
Sell vs. Hold Decision
Consider Selling If:
Consider Holding If:
You don’t believe in the project
Strong project fundamentals
No clear token utility
Clear value accrual mechanism
High initial valuation
Undervalued relative to peers
Big unlock events coming
Most tokens already circulating
You need the money
You can afford to wait
Points Farming Evaluation
Questions to Ask
What’s the expected token value?
How many points will exist at TGE?
What’s your capital’s opportunity cost?
Is the protocol worth the risk?
Could points become worthless?
Calculating Expected Value
Simple Framework:
Estimate total points at TGE
Estimate token allocation to points holders
Estimate launch market cap
Calculate: (Your points / Total points) x (Allocation x Market cap)
Compare to opportunity cost of capital
Position Sizing for New Tokens
Risk-Based Sizing
Token Type
Max Position
Rationale
Established protocol airdrop
Hold initial + add 2-5%
Lower risk, proven product
New protocol with good fundamentals
1-3% of portfolio
Higher risk, needs to prove itself
Speculative launch
0.5-1% of portfolio
High risk, lottery ticket
Unknown/unvetted
0%
Not worth the risk
Post-Launch Monitoring
First Week Checklist
Monitor price action and volume
Watch for insider selling
Check if promised features are delivered
Follow community sentiment
Look for exchange listings
First Month Checklist
Assess actual product usage
Review team communication
Check TVL/metrics growth
Evaluate vs. initial thesis
Decide: continue holding or exit?
Key Takeaways
Most new tokens go to zero—be selective
Verify everything from official sources
Check tokenomics: team allocation, vesting, distribution
Security matters: audits, verified code, multisig
Red flags are called red flags for a reason—don’t ignore them
Position size according to risk—never more than you can lose
Airdrops: verify before claiming, decide sell vs. hold
Points farming: calculate expected value vs. opportunity cost
