How do you determine exactly if a coin is a scam?
There's so many different projects in crypto. Some of them memes, they pump, they dump, some of them exit scam.
How do you know if it's legit?
The holy grail of cryptocurrency research is liquidity. I don't care what anybody else says. Liquidity is how much money is invested into the project.
Real, hard, tangible cash. Think about it, if I create a coin and I have 30% of the supply, I have a whole bunch of coins, but not any liquidity because I can't sell it.
I can't sell those coins. Who am I gonna sell it to?
If I wanna sell the entire supply, who's gonna give me actual cash
in return for my coins, right?
In cryptocurrency, there's something called liquidity pools with automated market makers. Those are basically like when you go on an exchange
and you trade, they use the order book model.
Crypto uses automated market makers. And in those liquidity pools, you could see how much money and how much legitimate cash there is in the form of ETH or USDC, which can be sold widely throughout the entire world.
So for me to tell if a coin's legit or not, how much ETH and USDC is in that pool so that it's legit money in the pool and not some random scam coin that people can mint out of thin air, this shows credibility.
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