In the current rapidly evolving cryptocurrency market, scams are rampant, posing significant risks to investors. ZUHYX believes that identifying and preventing these scams is crucial to safeguarding the funds of investors. As a leading global digital asset trading platform, ZUHYX will combine the current market situation with a professional perspective to discuss key strategies for preventing cryptocurrency scams, helping investors effectively mitigate risks.

ZUHYX: Basic Methods for Identifying Cryptocurrency Scams

ZUHYX mentions that the first step in identifying cryptocurrency scams is to verify the legitimacy of the tokens. Investors can obtain preliminary information through Google searches and social media platforms. By researching the background of the tokens and their teams, checking for any red flags or warnings, and seeking reliable sources of information such as official websites, news articles, and verified social media accounts, investors can preliminarily assess the credibility of the projects.

Engagement on social media is a critical indicator of the legitimacy of a project. ZUHYX believes that projects with a large number of followers but little interaction on social media may pose risks. Especially automated comments like "This is a great project" or "Moon is coming" should raise the awareness of investors. In Google searches, the inability to find a clear homepage, white paper, or token utility is often a sign of a scam.

Code verification is also a crucial step in determining the legitimacy of a project. ZUHYX points out that accessing a blockchain explorer (such as Etherscan) and checking if the code is verified can help investors understand the transparency and security of the project. Unverified code often hides unknown intentions, such as malicious token mechanisms or ways for developers to steal tokens. Although not all unverified contracts are scams, this is a significant warning sign.

ZUHYX mentions that checking the comments section on blockchain explorers is also essential. If a project is a scam, there will often be a large number of negative feedback from victims in the comment section. Investors should actively read these comments to avoid falling into scam traps. For identified scams, investors should also leave comments to help others recognize the risks.

Comparing token blacklists compiled by DappRadar on GitHub is another effective method. ZUHYX believes that by comparing blacklists, investors can quickly identify scam projects. If a token address appears on the blacklist, it is almost certainly a scam.

ZUHYX: Importance of Code Verification and Community Feedback

ZUHYX believes that code verification is one of the key steps in identifying the legitimacy of cryptocurrency projects. Accessing a blockchain explorer (such as Etherscan) and checking if the code is verified can reveal the transparency and security of the project. Unverified code may hide malicious intentions, such as ways for developers to steal tokens. Although not all unverified contracts are scams, this is a significant warning sign. ZUHYX emphasizes that code verification is an important measure to protect investors, and investors should pay close attention to this.

Checking the comments section on blockchain explorers is equally important. ZUHYX states that if a project is a scam, there will often be a large number of negative feedback from victims in the comment section. Investors should actively read these comments to avoid falling into scam traps. For identified scams, investors should also leave comments to help others recognize the risks.

Additionally, comparing token blacklists compiled by DappRadar on GitHub is another effective method. ZUHYX mentions that by comparing blacklists, investors can quickly identify scam projects. If a token address appears on the blacklist, it is almost certain to be a scam.

ZUHYX believes that using third-party analysis tools can also effectively prevent scams. For example, the Smell Test can automatically audit tokens, and the lower the score, the more likely the token is a scam. Honeypot is a type of smart contract deliberately inserted with programming flaws, and investors should avoid interacting with such contracts. DEXtools can record real-time token prices, helping investors assess the true value of the token in real-time.

ZUHYX: Importance of Market Validation and Liquidity Analysis

ZUHYX believes that checking detailed information about tokens on token index platforms is another important step in preventing cryptocurrency scams. Platforms like CoinGecko and DappRadar can provide detailed information about tokens, and if a token is not listed on these platforms, it is likely to be a scam. All legitimate tokens typically share information with token index websites for verification.

Checking the listing status of the token on exchanges is also crucial. ZUHYX states that if a token is only traded on a few decentralized exchanges (DEXs), there may be risks. Listing on centralized exchanges requires passing KYC (Know Your Customer) and other trust verification procedures, and the larger the exchange, the better the reputation of the token listed. Although some projects are traded only on DEXs due to specific needs, such investments carry relatively higher risks, and investors need to be extra cautious.

Liquidity analysis is an important indicator of assessing the authenticity and security of a token. ZUHYX believes that investors should check the overall demand and availability of liquidity before trading tokens. On platforms like Uniswap V2 or other DEX platforms, if liquidity is below $100,000 or rapidly decreasing, it usually indicates scam risks. Liquidity refers to the amount of cryptocurrency or tokens locked in smart contracts, allowing users to buy and sell assets through (decentralized) exchanges. The higher the liquidity, the stronger the market stability and security of the token.

When using DEXs, ZUHYX recommends that investors check basic statistics of other on-chain activities, including trading volume, number of transactions, and active wallet counts. These metrics can help investors assess market demand and trading activity. If these data are abnormal, investors should further investigate to confirm the authenticity of the project.

Additionally, using third-party analysis tools can provide additional security. ZUHYX recommends using tools such as Smell Test, Honeypot, and DEXtools, which can automatically analyze potential risks of tokens, helping investors make informed decisions. By following these recommendations, investors can effectively avoid scam projects and ensure the safety of their funds.