The "Dogcoin" in the currency circle usually refers to newly issued cryptocurrencies with extremely low market value, opaque project information, weak technical foundation or even no practical application scenarios. These tokens often appear with high-risk narratives.

1. Dogecoin projects generally lack substantive technical support and mature application solutions. Many times, they are just a token issued on existing blockchains without unique technological innovations.

2. The liquidity of this type of token is very poor. Trading on small or unknown exchanges, the buying and selling depth is insufficient, and large transactions may cause severe price fluctuations and even difficult to sell.

3. Extreme information asymmetry is a typical feature of Dogecoin. The project party has most of the information, and it is difficult for ordinary investors to obtain real and comprehensive project situations or team backgrounds.

4. Many Dogecoins have huge risks of "rug pulling the market". After the project party or large-scale investors attract funds to enter the market through publicity, they quickly sell the tokens in their hands, causing the price to plummet instantly and investors lose all their money.

5. The price of Dogecoin fluctuates abnormally. The rise may be astonishing in a short period of time, but it may also be instantly zero due to any negative news or market sentiment.

Typical signals for identifying Dogecoin scams

Not all new projects are scams, but in the field of "Dogcoin", vigilance needs to be mentioned with the highest level. There are some common signals to identify potential scam projects.

1. The project team members are unclear and even completely anonymous. A serious project usually reveals information about core team members and provides its background and experience.

2. The content of the Whitepaper is empty and has many grammatical problems, and lacks specific technical details, economic models or project planning. Some even just simply copy and paste content.

3. Commit an unusually high fixed income or return rate. Any project that claims to be "solid profit without losing money" and "return X% per day" is almost a variant of the Ponzi scheme.

4. Project publicity is only focused on social media for viral marketing, especially through a lot of orders and exaggerated publicity, but there is no official website, or the website is extremely simple and professional.

5. The project code is not public (non-open source), or the public code base (such as GitHub) is not updated for a long time, the code quality is extremely poor, and there are obvious vulnerabilities or backdoors.

6. The community atmosphere is extremely fanatical, full of a lot of calls, urging purchases, blind flattery to the project party, and lack of rational technical or project discussion.

7. The project party frequently modifys the rules in the short term, such as the total amount of tokens, transaction tax rates, lock-up mechanism, etc., without a reasonable explanation.

8. Use celebrities or KOLs (Key Opinion Leader) to over-stand, but these people have no substantial relationship with the project itself.

Basic observation points for evaluation projects

It is crucial to conduct your own independent research (DYOR - Do Your Own Research) before considering any Dogecoin project.

1. Deeply study the white paper of the project (if it exists) and try to understand its core goals, technical routes, and the problems it addresses (even if these can be far-fetched).

2. Try to understand the background and experience of core team members and search for their social media and past experiences. Lack of public information is an important red flag.

3. Check whether the project has a public code base (such as GitHub). Observe its submission history, code quality, and community engagement. The lack of active code bases suggests that the project may not be actually developed.

4. Analyze the economic model of tokens, including total supply, distribution method (team, private equity, public equity, airdrop, etc.), unlocking timetable, and whether there is a destruction or additional issuance mechanism. Beware of projects where teams or early investors hold the vast majority of tokens.

5. Pay attention to the discussion and evaluation of projects in non-profit channels (such as independent rating websites, technical forums, communities), rather than just promotional channels controlled by the project party.

6. Check whether the project has passed any well-known third-party security audit. Even if the audit is passed, the risk cannot be completely ruled out, but projects without audit are more risky.

7. Understand which trading platforms are mainly launched on tokens. Large and well-known trading platforms have certain reviews of projects, while projects launched on small or decentralized exchanges (DEXs) are at higher risk.

Things to note before investing in Dogecoin

The risk of investing in Dogecoin is much higher than that of mainstream cryptocurrencies.

1. Only invest funds that can bear all losses. Think of it as a very high risk speculation, not an investment.

2. Don’t invest blindly based on other people’s recommendations, so-called “internal news” or calls on social media. This information is often biased and even part of a scam.

3. Be vigilant and remain suspicious of any project that over-promotes, promises high returns, or creates FOMO (fear of missing out) emotions.

4. Take the time to do your own research, rather than relying on other people’s analysis. Understand what you are buying, even if it's just a concept.

5. Even if you decide to try, strictly control your position and set clear stop loss points.

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