Not all warnings are equal. This guide explains the common red flags Verify raises and gives you a sense of how much weight to put on each. Severity matters: a warning is something to note, a critical flag is something to take very seriously.
Team and transparency flags
Limited verifiable public information means we could not confirm who is behind the project. This removes accountability. It is more concerning for a project asking you to lock up funds than for an established protocol with a long track record.
Audit and security flags
Audit status unverified means we have no record of an independent security review. For any project holding user funds in smart contracts, this is a significant concern. Exploits of unaudited code are one of the most common ways people lose money in crypto.
Tokenomics flags
Low circulating ratio with significant future unlocks means a large portion of the supply is yet to enter the market. When those tokens unlock, they can be sold, putting downward pressure on price. This is not hidden information, but many retail buyers overlook it.
Liquidity and market flags
- Thin liquidity: you may not be able to sell a meaningful position without crashing the price. A serious exit-risk concern for larger holders.
- Very high turnover: unusually high volume relative to market cap can indicate wash trading designed to fake activity.
- Thin trading relative to cap: the market is quiet, which can mean fading interest.
Regulatory flags
Unclear regulatory classification means the asset's legal status is ambiguous in many jurisdictions. This can translate into real risk if regulators act, exchanges delist, or tax treatment changes.