Red flags to avoid in crypto

People ask about it all the time, so I decided to make a post about red flags which you should avoid when investing in crypto. These are lessons I learned (sometimes the hard way) throughout my crypto journey.

1. High shares of ICO (initial coin offering):

Some coins allocate ridiculous amount of coins to early investors. Sometimes as much as 50% of the total supply. Many of them allocate another huge percentage to developers (themselves). This is a big red flag as those "investors" can sellout at any moment and send the price into a doom spiral (rug-pull). Also it means these coin are less decentralized.

1. Highly Inflationary tokenomics:

There is something called "supply and demand". If you release a huge number of new coins/tokens into circulation, it will ruin the price. It can be by rewarding unrealistic amount of coins to investors/participants or by design. Avoid these cryptos as they usually have an extremely messy price movement.

1. High APY (annual percentage yield):

Some cryptos offer very tempting staking options. It might look reasonable to buy and stake them. I mean who doesn't like 50% annual reward on their initial investment? The thing is, when there are more reward, there are more supply, and price will go down.

More importantly, where is this generous reward coming from? Most often than not, this type of rewards are either unsustainable, or coming from scams like Ponzi schemes

1. Memecoins:

First of all, the price of memecoins is based upon on thing, hype. They have no use or application whatsoever. If you wanna gamble away your money go ahead. But remember this, and I am talking from experience. For every successful x100 memecoin, there are hundreds of worthless shits which will just die out after a while. And second of all, those successful memecoins will eventually go down after the hype is gone.

1. Metaverse projects:

I am sure one day metaverses gonna be as huge and dystopian as "ready player one." But that day is not here yet. Neither hardware nor the technology are cheap or efficient enough to deliver a huge, realistic and fun virtual world.

What are your red flags? Feel free to share them in the comments.