Fundamentals · updated
How to check a token before buying
A ten-minute routine, in the order that catches the most for the least effort.
In short
- Confirm the address from an official source before anything else.
- Check the sell side before the buy side.
- Decide in advance what would change your mind.
Start with the address
Name and symbol are attacker-controlled strings on every chain. Anybody can deploy a token called anything, and impersonation of a well-known asset is among the most common setups there is.
Get the contract address from a source the project controls, and compare it character by character with the one you are about to interact with. Every other check is worthless if it was run against the wrong contract.
Check the sell side before the buy side
Whether you can get out is more important than what you are getting into, and it is the check most people leave until last. Run the sell simulation and look at the trading-restriction functions in the same pass.
Then ask the follow-up that a simulation cannot answer: if the sell works now, can somebody change that? A live owner with a tax setter or a blacklist means the current answer has a short shelf life.
Depth, locks, distribution
Look at pool depth in absolute terms and compare it against the market capitalisation being advertised. If the two are wildly apart, the chart is not describing a market you can exit at scale.
Then the lock — share and expiry, not the word — and the distribution. A top-ten share large enough to move the price on one decision is exposure regardless of anybody's intentions.
Finish on the confidence score
Before drawing any conclusion, look at how much of the intended checking actually ran. A report with few findings because everything was checked is a different result from a report with few findings because very little could be.
Finally, write down what would change your mind — a liquidity fall of a given size, an ownership transfer, an implementation swap — and set monitoring for it. A decision with a stated exit condition is a different kind of decision from one without.