Maxim Kurbangaleev, an expert in the cryptocurrency market, discusses the problems of the industry. High-profile scam projects have been depriving investors of money for many years and each time they succeed more and more in the execution of their plans: in 2021 alone, scammers earned $14 billion from crimes related to cryptocurrency.
News about the staggering losses of holders come out almost daily – in the penultimate week of July alone, the meme-cryptocurrency TeddyDoge collapsed by 99% after an unexpected sale of tokens worth over $4.5 million.
“Playing a cruel joke” – Maxim Kurbangaleev about red flags in the market
It would seem that forewarned is forearmed: many professional resources often tell how not to fall into the bait of intruders and how to protect yourself from their schemes. So why is the number of victims of scams showing such a rapid increase year after year?
“The creators of scam projects skillfully play on the weak trait of the investor – his emotions. The desire to make quick money overshadows the cold mind of novice traders, and at times when greed takes over, it is easy for fraudsters to promise mountains of gold. Lack of emotional discipline and belief in one’s own illusions are the Achilles’ heel of many investors,” Maksim Kurbangaleev believes.
Finding a true treasure among thousands of grains of sand (today, according to DropsTab, the number of projects has stepped over 10 thousand) is no simple task. Especially when celebrities start talking about projects with enthusiasm – how not to trust a familiar face and not invest your money by following your favorite actor / musician?
“It is important to understand that scam projects often hire famous people to advertise on social networks and shoot promotional videos. When projects that have barely appeared on the market try to attract as many stars as possible, this is nothing but aggressive marketing”, Maxim Kurbangaleev explains.
According to the expert, investing in such projects is not worth it. Exploitation of popularity and fame does not make the project high-quality, and often speaks of the desire for easy money among its creators.
Maksim Kurbangaleev: project selection and verification
What else is worth paying attention to when choosing a project for investment? As Maxim Kurbangaleev says, it is necessary to focus on proven platforms (CoinList, DAO Maker, and others), which give investors the opportunity to participate in the sale of tokens at an early stage. Startups, presented on reliable platforms, undergo a thorough analysis and have a real product.
“Investors can also enter the crypto-venture community, where you can always search for and buy out allocations among friends and acquaintances. This is the method I used when I went to the Mina Protocol project”, says Maxim Kurbangaleev.
According to the expert, it is really possible to find quality projects on the market. Among the already released successful projects, Maxim Kurbangaleev cited the following: The Sandbox – a classic “sandbox” with a well-thought-out economy, Polygon (MATIC) – a Layer-2 solution for scaling the Ethereum blockchain, as well as dYdX – a decentralized exchange with the ability to earn money on liquidity supplies. Market giants invested in each of these projects – for example, Andreessen Horowitz (a16z), Naval Ravikant and others invested in dYdX.
“One of the indicators of a promising project is its investors. If the largest market players invest in a startup, this indicates a great potential and usefulness of the product. Moreover, good projects provide their holders with various opportunities: from voting to making changes in the distribution of the fund’s resources”, Maxim Kurbangaleev explains.
Is it realistic to assemble a team and create your own product?
“Creating your own product that is useful to people and brings profit is possible, but not easy. And it’s not even about financial resources and time, which will be required in any case, but about the coherence of the team itself. The “Dream team” is formed only after tedious grinding – at first people are very polite, communicate with each other carefully and are sometimes ready to do anything to make the right impression. It is at this time that many teams break up before reaching the desired results”, – says Maxim Kurbangaleev.
КHow does corporate culture affect the final result of a product? In a team where understanding has been reached, the stage of conflicts has been passed and agreements exist, there are more chances to realize a worthy project.
“A successful product must be based on important values – these are not just words. It is important for the team to understand why and for whom the project is being created, and this should be broadcast by the CEO”, Maxim Kurbangaleev sums up.
In fact, a lot depends on the internal culture of the team – what the project will be like and how it will help people. However, not everyone takes kindly to such questions, preferring to take the easy way – to copy someone else’s work and bring another identical clone to the market.
And while the cryptocurrency market makes it easy to deceive investors, scam projects will multiply and learn, like bacteria that often mutate and defend themselves against the latest drugs. Do they care about culture? Hardly.
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