SolDegens.Club

$SDCU Rug Awareness

1. Due Diligence
  • Research the Team: Look for information on the team behind the memecoin of interest. Anonymous teams are a red flag unless they have a solid track record in the crypto space.

    Check if they have doxxed themselves (revealed their identities), their past projects, and their reputation in the community.

    If team(s) rejects and silences criticisms and/or refuse to communicate transparently with their investors, this is a red flag!

  • Whitepaper and Roadmap: A legitimate project should have a clear whitepaper detailing the project’s goals, development, and roadmap. Be wary if the whitepaper is vague, full of buzzwords, and/or non-existent.
2. Tokenomics
  • Liquidity: Check to see if the project liquidity is locked permanately, or for a significant period. A ‘true’ rugpull involves the development team pulling out all liquidity, crashing the price to the floor. Check to see what percentage is locked, if the entire liquidity pool is not locked, so you can measure your risk.
  • Token Distribution: Check to see how tokens are distributed. A large percentage owned by a few wallets (especially if those are associated with the team) could mean they can manipulate the market. Beware of bundling and check bubblemaps and wallet holders, often, to identify token movements and high transfer rates of tokens, between multiple wallets.
  • Token Locks: Check to see if the team has locked up any supply. If so, this shows a team commitment to the longevity of the project.
3. Community and Social Media
 
  • Engagement: A genuine project generally has active, engaged communities on platforms like Telegram, Discord, and/or X. Be cautious of inactive or heavily botted communities. Even communities may not understand how important their status is, within the project. The community is the main driving force to the overall success of a project.
  • Scrutinize Hype: Intense marketing campaigns, project boosting without development or underlying value, KOL endorsements, etc…can be orchestrated to eventually rugpull a project. Be skeptical of projects that seem to gain massive popularity and/or high marketcaps, overnight.
4. Audit and Security
 
  • Smart Contract Audits: Look for projects that have undergone third-party audits. While not foolproof, an audit by a reputable firm can reduce the risk of hidden vulnerabilities or malicious codes.
  • Code Transparency: The project’s smart contract should be open-source for community scrutiny. Use SolScan.io to investigate smart contracts. Avoid smart contracts that allow contract freezes.

5. Investment Practices
 
  • Only Invest What You Can Afford to Lose: Memecoins are inherently risky. Never invest more than you’re prepared to lose completely.
  • Diversify: Don’t put all your funds into one coin, especially in the memecoin space where volatility, rugpulls and scams are very common.
6. Stay Alert, Stay Green
 
  • Pay Attention!: Follow memecoin project news and updates, pinned messages in TG, recent announcements across project socials etc. If there are warnings about potential rugpulls and market sentiment towards a specific memecoin project, it can also be found Platforms like TG, Reddit, X, Facebook groups and crypto dedicated blogs. Do proper research and stay up-to-date on your investment, at all times!
7. Additional Red Flags
  • Unrealistic Promises: Promises of guaranteed high returns or unique features that seem too good to be true, usually are.
  • No Product or Marketing: If there is only boosts/hype and no real product or social marketing and/or communities are locked out of social interaction, especially on TG, this might be a clear sign of a scam/rugpull, in action.
  • Rushed Listings: Projects that rush to get listed on decentralized exchanges with little to no history/background and/or development, may be aiming for a quick exit.