The hottest ones will die, the most criticized ones will earn

The harder the step, the greater the multiplier

The more gas you spend, the more expensive the inscription will be.

The more positions you hold, the more likely you are to be listed on the exchange

Dragon One must be a shuttle, Dragon Two must defend himself

See the split, add positions and follow

I believe you have all heard this, especially when the inscriptions were crazy, people were asking which one to play every day. Including the current local dogs, especially after the SOL chain became popular, there are tens of thousands of local dogs every day, but there may be only one or two that are really valuable. So what are the characteristics of the popular and doomed projects that can be predicted in advance? How can we prevent them?

Overhyped

Often through heated discussions on social media, online forums, and even traditional media, these projects are hyped to a disproportionate degree, exceeding their actual value or potential.

Over-hype is most likely to occur when the bull market is at its peak: EOS, which is in the fifth wave, is known as Blockchain 3.0, and the top ten projects of 2018 that were born at the same time, including ICP, which is known as Web3.0 Internet Computer, are typical representatives of over-hype.

Tips for avoiding pitfalls: Pay attention to the difference between marketing and hype, especially in the bull market when everyone is getting rich. Be especially cautious of any project party that uses exaggerated means just to sell tokens to you.

Lack of substantive progress

The project may not have substantial technological progress or commercial applications to support its market performance.

For example, Otherside, the land of Bored Ape, was extremely popular in 2022 and successfully raised $320 million. As of now, it has fallen by more than 95%, and there has been no substantial progress in nearly two years. The price of 5ETH at that time caused most investors to lose money. Inscriptions of various public chains are inscriptions that only take advantage of the popularity and do nothing; after ORDI, all major public chains have set off a wave of inscriptions, but basically one is killed after one is hit, and the extinction rate has reached 99%.

Tips for avoiding pitfalls: For those who only talk about ideals and visions but not implementation and development, and whose PPTs are very impressive but have no specific development of any hot projects, these are at most short-term speculations and should not be held for a long time.

Highly speculative

The main driving force behind investors' participation is to make profits through speculation, rather than trust in the long-term development of the project.

MEME coin, why do most MEME coins flow in one wave? It’s because everyone only comes for short-term speculation and just wants to arbitrage at a high price and leave. In particular, the imitation disks of the leading MEME have more obvious speculative attributes. Their announcements are very fierce and are as popular as the leading ones, attracting the funds of retail investors who are short of the leading ones. However, from collective pursuit to collective stampede, from the beginning to the collapse, often It won't take more than 3 days, and it will even cool down immediately upon opening. This is also "Long Yi must shuttle, Long Er defends himself", but most people did not get on Long Yi's car, but died on Long Er.

Tips for avoiding pitfalls: Just fall in love with MEME coin, don’t get married. As for the imitation of Dragon-MEME coin, try not to participate, especially those started by the project party with a dark history. (Don’t believe in resurrection, most of them are just a flash in the pan)

High price volatility

In the "hottest must die" situation, price volatility will be very high, which will attract more speculators and further amplify volatility.

The so-called dog-eared plates that are not even MEME coins, or those scams that are originally intended to defraud. Some time ago, there were many examples of various sickles taking advantage of the popularity to cut leeks in the SOL ecosystem. After investors bought chips, they were in heaven one second and hell the next. Before they could recover, the pool was closed and returned to zero.

Tips for avoiding pitfalls: Not being anxious, not paying attention, and not participating are the best ways to avoid pitfalls.

Bandwagon effect

Many investors do not do their own research, but simply choose to join in because they see other people investing and media hype, causing the project value to deviate from fundamentals.

There are too many cases of bandwagon effects in the ICO bubble in 2017 and various Fi in 2021. At that time, people were in the false prosperity of the bull market. Not only investors followed suit, but also project owners followed suit to create imitations. Chiacoin in 2021 is a typical case. At that time, the popularity of Filecoin promoted the popularity of storage mining. Many investors outside the circle were attracted by the false and exaggerated excess investment returns, blindly followed suit to buy Chia mining machines, and finally lost all their money.

Tips for avoiding pitfalls: When your distant relatives or friends outside the circle who you haven't contacted for a long time ask you for advice on a cryptocurrency project, you should be very cautious, because the game of passing the parcel has come to the last stick. If you think about it again and again and still decide to participate, then think carefully about who will take over your business in the future. Can't think of it? Then you will be the last one to take over.

Difficulty in exiting

When everyone wants to sell at the peak, the market tends to reverse quickly, and those investors who bought at high levels find it difficult to find an opportunity to exit the market.

Projects that are difficult to exit are often due to artificial mechanisms that limit liquidity. For example, through layers of nesting dolls, high-liquidity funds are decomposed into low-liquidity fund pools. Once the market collapses, investors who bought at high prices cannot escape at all. RACA, a popular blockchain game in the cryptocurrency circle in 2021, can be said to have made a very small number of people rich while cutting the vast majority of people. The project party issued a series of low-liquidity NFTs to lock up the floating profit assets of retail investors. Later, the overall market turned bearish, and the chips of the takers had long been divided into low-liquidity pools. Except for a few experts, most people could hardly escape.

Tips for avoiding pitfalls: For projects with poor liquidity, ignore the so-called indicators and K-lines, disregard all kinds of brainless soft articles that sing praises of the market, earn what you can, and never expect to sell at the highest point.

Concept or theme hype

The project may be centered around a hot topic or concept—such as an emerging technology concept, a celebrity collaboration, or a similar marketing strategy.

The hype of technology concepts is the favorite of pyramid schemes. For example, a certain faction has piled up layers of high-sounding blockchain technology terms for itself. Its so-called decentralized mobile mining is to use a very centralized APP to distribute output, and then spare no effort to PUA users to cover up the essence of its pyramid scheme. As for the case of celebrity cooperation, for example, a certain bear NFT that cooperated deeply with a certain king easily harvested 70 million US dollars from fans that year, but now the floor price is more than 100 US dollars, with a market value of more than 1 million.

Tips for avoiding pitfalls: Never participate in a pyramid scheme. If you make money, you work on the sewing machine. If you lose money, you hand it over and the money is confiscated. If you don’t make any money, it’s a waste of time. You will lose money anyway.

You can never make all the money no matter how hard you try, but you can easily lose it without any effort. You are responsible for making money yourself. Do more research on your own.

Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together. If you have any questions, you can comment or send a private message