1. Purpose: what problem does it solve?
Start with the plainest question: what does the token do that could not be done without it? A clear use — paying network fees, governing a protocol, funding a defined cause — is a better sign than a list of buzzwords.
2. Tokenomics: who owns what, and when
- Total and circulating supply, published as numbers.
- Allocation to presale, team, treasury, liquidity, ecosystem and rewards.
- Vesting or lock-up rules for team and early allocations.
- Whether anyone can mint new tokens later.
Large unlocked team or treasury allocations can mean heavy selling pressure. Missing figures are a red flag on their own.
3. Roadmap and delivery
A good roadmap names concrete technical milestones (testnet, explorer, audits, mainnet) rather than vague phases. Compare earlier promises with what has actually shipped.
4. Contracts and audits
- Are contract addresses published on the official site?
- Is the source code verified on a block explorer?
- Has an independent firm audited the code, and is the report public?
- Are admin rights (pausing, minting, upgrading) disclosed?
5. Team, legal entity and communication
Check whether the people and legal entity behind the project are named, whether there is a legal notice and privacy policy, and whether official channels are consistent across the website and social media. Honest projects describe risks in plain language and avoid guaranteed-profit claims.
6. Community and liquidity
Look for real discussion rather than only price talk. After launch, check where the token trades, how deep liquidity is and whether liquidity is locked.
Red flags at a glance
- Guaranteed or "risk-free" returns.
- Pressure to buy immediately, countdowns without substance.
- Anonymous team combined with no audit and unpublished contracts.
- Supply figures that differ between pages.
- Requests for your seed phrase, ever.
Apply the checklist to DPC
We publish DPC's supply and allocations on the tokenomics page, milestones on the roadmap, contract context on the contracts page and risk language on the security page. Use the same questions on us that you would use on anyone else.
Start with published numbersDPC's total supply and every allocation are listed in text on one page.
View DPC tokenomicsFrequently asked questions
What is crypto due diligence?
It is the research you do before buying a token: checking its purpose, tokenomics, roadmap, contracts, audits, team and community, and looking for red flags.
What are tokenomics?
Tokenomics describe a token's supply and distribution: how many tokens exist, who receives them, when they unlock and how new tokens can be created.
Does an audit make a project safe?
No. An audit reduces the chance of undiscovered code issues, but it cannot rule out bugs, admin misuse or business failure. Read the findings.
What is the biggest red flag?
Any promise of guaranteed returns, and any request for your seed phrase. Legitimate projects do neither.
This guide is general information, not financial, legal or tax advice. Crypto assets are volatile and can lose value. Check the rules that apply in your country.