Token unlocking and market value trap: How to avoid being scammed?

author:Hanzo

Compiled by: Xiaobai Navigation coderworld

You were deceived by venture capital. Every limit down you bought was the venture capital cashing out to make huge profits.

If I hadn't figured out their tricks, I would have lost nearly $300,000 in June!

所有人在评估代币时都只看代币的价格，而忘记了市值和代币解锁。

This is a mistake.

There are many examples, Arbitrum, Starknet, Zksync, etc.

$ARB In mid-December, its price was about $1.1, with a market cap of $1.3-1.4 billion, then the price rose to over $2, and the market cap increased accordingly. By April-May, the price dropped to $1, but Arbitrum's market cap remained at $2.5-3 billion, the same as in December!

How did this happen?

As VC unlocks, the price increases from $1 to $2.

Venture capital firms began selling, causing prices to fall, but people saw every dip as a good buying opportunity.

This causes the price to go up, more tokens to unlock, VCs to sell, and retail investors to buy. That’s how it works.

Feeding a bunch of people is a complex task.Xiaobai NavigationWhat projects allocate airdrops on their own, manipulate prices, and play around with unlocks. Starknet is a good example of this, with prices gradually dropping as unlocks progress.

What conclusions can we draw from this?

• Before buying any tokens, please review the unlocks and token economics.

• Check the Market Cap Ratio (MCap) and its history.

• Analyze and logically evaluate whether it is worth buying a specific token.

In today’s market, it is quite risky and difficult to make a decent and consistent profit on regular altcoins. Currently, memes are performing much better than regular coins.

The article comes from the Internet:Token unlocking and market value trap: How to avoid being scammed?

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