The detractors of anything new, usually people deeply embedded in the system the emerging creature aims to replace, will compare it to something dark and frightening. Crypto as an industry threatens bureaucracy itself, which is one of the most popular business models in today's society, so you are never far from a person frothing with anticipation at the chance to tear it down a peg. It is almost a trope at this point, but the common comparison is with the wild West. They might be right, but not in the way they intend.
The gritty, lawless pictures of the American West in cinema that have endeared generations are, for the most part, fabricated. While justice didn’t quite resemble what we lean on in today’s society, there were plenty of independent peacekeeping agencies and order where many imagined chaos. They weren’t perfect communities, but they were far from as wild as we have been led to believe, and studies found that there were likely far fewer murders. The analogy between crypto as an industry and the historic American West is, therefore, not necessarily far wrong.
Many of us staunch believers in the power of blockchain technology fear for some of its users. The on-ramp into crypto is getting easier, but there are plenty of areas that can confuse even those experienced in the field. Every week my heart is a little broken when I read the desperate requests for help from people who have unknowingly signed a smart contract transaction that was duplicitous in intent. That is why we need independent peacekeeping agencies in crypto, and at MyMetaverse, we are always willing to take that responsibility on.
In this article, I will walk through numerous ways you can insulate yourself from the blockchain gaming and NFT projects that aim to hide in the shadows of confusion and extract your money. These projects are occasionally borne of poor calculations and panic, and sometimes of ill intent, but the proactive measures you can take are the same. It is worth highlighting that while projects needn’t tick all the boxes and avoid all the red flags, if they are lacking in one of these three key areas, the other two areas go up in importance.
Is There Accountability?
The suggestion that crypto is anonymous is a misnomer; while you do not need to put your real name to your wallet addresses, it is still only pseudonymous. However, in the development of blockchain games and NFT projects, there can be anonymity and it is overlooked due to the perceived nature of crypto. This is not to be shrugged off as part and parcel of the new system and nor should pseudonyms.
When you look at a project you wish to back or invest in, you must research the team and developers behind it. My first port of call is to check if they are using their real names. If they are, check their social media presence and ensure they are who they say they are. It’s increasingly rare that people use their real names — which isn’t necessarily an issue — but if somebody is verifiably who they say they are and has an online presence with their real name, they are generally unable to cut and run. The chances of the project being a scam goes down significantly, therefore. Here at MyMetaverse, the Founder and CEO, Simon Kertonegoro, works under his real name and his history in the sector can be seen on LinkedIn and Twitter. I too go under my real name whilst working in crypto, but I can understand why some people choose not to.
If a project’s developers and leaders use pseudonyms, the important checks to make revolve around whether or not their pseudonym has any legacy to it. Do they have a body of work under that name, or a social media presence, or any large communities they are a part of? While it isn’t quite as trustworthy as a real name, many of our nicknames are a part of us and we are known for them, so we wouldn’t want to undo that with a scam. Often in business, credibility is your most important asset, do they have any credibility to lose?
How Comprehensive Is the Project?
When assessing a new project, it is important to delineate exactly how much work has gone into it. The difficulty with crowdfunding — which is exactly what the majority of crypto projects are — is anyone can make inviting-looking plans. The old adage “talk is cheap” is relevant here. A couple of years ago, you could forgive blockchain projects for being little more than roadmaps and whitepapers, but I am less and less tolerant of that now. If a project has merely sketchings of ideas, concept art, and so on, but no real results to show, you ought to be wary.
While all projects must start at the drawing board at one point, they should not expect investment for the bare-bones of an idea. The difficulty, particularly with crypto projects, is in the execution. This is where projects dubbed scams could have simply been poorly calculated and caused the developers to panic and run, which is why accountability is so important. Similarly, some projects are set up to be nothing but ambitious plans with little in the way of real work, only to pull the rug once the money is in.
If there is not enough meat on the bones of a project and it is looking for your investment, fight the FOMO urges rife within crypto and wait. The concept phase is the easiest in the development journey and unless the developers are proven and have investment outside of crowdfunding, I would want some gameplay footage and depth to their plans at the very least.
Do They Pass General Due Diligence?
If a project can pass my first two checks, in that they are accountable and the project is well fleshed out, I will finally do what should be common practice with any investment: due diligence. Here is a list of worthwhile checks:
- Do they have a social media following?
- Does the team engage with its community?
- Is there an active Discord/Telegram?. Does the project have a business model?. Is there wide demand for the product they're creating?
- Is the roadmap achievable?
- Has the team created anything else and did it succeed?
- Are there any articles or videos about the project from independent, trustworthy sources?
- Are they transparent with how they work and any difficulties?
- Does the team/project seem professional? For example, spelling, graphics, and website etc.
- Does it feel right?
This isn’t an exhaustive list by any means, but the last point is one I want to unpack briefly. If a project doesn’t feel quite right, even if you’re not sure why that is, wait a while before you invest. Let the project become a little more developed, with some more of the goals achieved, and then reassess. The cult-like “to the moon” cries can drown out reason when it comes to early investment. Yes, there are projects you could have made tens of millions of dollars from if you invested early enough, but they’re exceptionally rare and you seldom needed to have invested on day one.
It’s an exciting time for gamers and NFT collectors. The metaverse — the neon dream of us nerds — is materializing and it’s all too easy to be swept up in the ceremony. Nothing is more deflating, however, than handing over your money to those who do not deserve it. What infuriates us the most is the blatant exploitation of the excitement of gaming and blockchain enthusiasts. It’s a vulnerability, but a pure one, and we want as few people as possible to experience that heartache.
Be selective, be inquisitive, be willing to miss out. The right projects will take you in and reward you no matter when you come knocking. We do not dissuade the diligent, punish the particular, or chastise the conscientious; whenever we clear your vetting process, you'll be warmly welcomed.