8 ways to check if a token is a scam (Part 2)

Author: Darius Devėnas, DappRadar

Translator: Felix, PANews

Why don't scammers just verify their code?

Because once the source code of a contract is public, everyone can know the intention behind the contract. Or a ridiculous token system, or a way for the developer to steal all your tokens. But does this mean that every unverified contract is a scam? Not necessarily, but it is a very serious red flag.

3. Check Etherscan comments

This part is very simple. There is usually a comment section on each block explorer. Most of the time there are no comments, but if a project is a scam, you may find a group of angry people in the comment section. So be sure to click and check. If someone says it's a scam, there is a 99% chance that it is a scam. If you are a victim of this project, please leave a comment as well.

4. Check DappRadar blacklist

You can compare the token blacklist compiled by DappRadar on Github. If the token address appears on the list, it is a scam.

5. Check the token details in the token index

If you can't find the token on Coingecko or DappRadar's token index (or similar token price trackers), then the token is likely a scam. If you see a warning like the one below, proceed with caution:

All legitimate tokens share their information with token index websites for verification. However, platforms like CoinMarketCap and Coingecko require certain specific conditions to be met. Therefore, not all tokens (regardless of whether legitimate or not) are automatically listed on this token index platform.

6. Check how many exchanges list the token

If the token is only traded on a few decentralized exchanges (DEX), then it may be a scam. Listing on centralized exchanges requires KYC and additional trust, and the larger the exchange, the better the reputation of the listed token.

But not all tokens listed only on DEX are scams. Some projects do not require high trading volume, and some projects are only available to Web3 users rather than token traders.