FAQ - DYOR (ILO related)

Why DYOR is important?

There are often in our ILO channel questions and concerns about upcoming ILOs, or even ended ones which had a rather shady start or end. Our stance remains the same: we are a tech provider, our platform is decentralized and any dev can start a fund raiser, hence it is your duty as a participant to know exactly what are the risks involved, and take the decision to skip some ILOs, or only invest what you can afford to lose. It is your risk management versus your risk appetite.
Even an audited and KYC ILO doesn't protect you from losing your funds, as there are many more ways to steal your funds than there are ways to protect you.
With the ILO Platform v6, a lot of improvements were implemented, the major one in term of UI are the blue/orange/red coloring which are giving you a quick taste of the "quality" of an ILO.
That being said, some red flags doesn't necessary means shady, and all blue doesn't mean it's safe.
Here are some hints to help you conducting your own research and finding a lower risk ILO.
Do also check the DYOR guide of our partners SolidProof and FOMODEX.
Note: Green color was changed to blue in v6. This is to prevent misconception that green="safe". No ILO is safe on a decentralized platform. Blue="passed" or "not failed", it does not mean "safe".

How do you feel about the flags?

Flags are rather blue?
Or rather red?
Though the blue flags look appealing, do dig into the details of the ILO, like locks expiration (both LP and tokens), type of token locking (linear or standard), audit details, etc. and ask questions in our dedicated channel and in the project's channel.
Note: you can find the description for each icon above on this page.

Is 80 to 100% of the liquidity locked?

Did they lock the minimal % of liquidity or the maximum 100%? Locking 60% means that, 40% of the BNB/ETH are sent to the team/dev/project wallet directly after presale's success.
Locking 100% of the liquidity does not mean however that your funds are safe.


Liquidity lock is different than token lock/vesting. ETH/BNB/etc. is not "locked" in the liquidity pool, but the LP token (representing the ratio of tokens in a pair) is locked.
Take for example and ILO called XYZ supplying XYZ tokens with the funds raised in BNB.
A pool is created with 100 XYZ and 100 BNB upon ILO completion.
The XYZ/BNB token ratio in the pool depends on the price of both tokens in the pair. Unlocked XYZ tokens sold to the XYZ/BNB pool will reduce the amount of BNB and increase the amount of XYZ in that pool, meaning the price of XYZ will decrease.
1 LP token could represent 1 XYZ and 1 BNB, meaning XYZ has a rather high price tag. However, if a large amount of XYZ are sold to the pool, the LP token may represent 100 XYZ and 0.01 BNB: this would mean that 1 XYZ token has practically no value anymore: the liquidity pool was drained. The amount of locked LP tokens remains the same and are still locked, but their value is extremely low.
If the concepts of liquidity pool, liquidity locking and impermanent loss is not clear to you, we recommend watching this video.

How to read the Tokenomics?

Under the "info" tab of every ILO, you will see, among other pieces of information, the tokenomics.

Definitely bad tokenomics

This is a tokenomic to stay away from
Why: To many unlocked token, will drive the price close to zero if market sold

Potentially good tokenomics

Why: 80% of tokens are for presale and liquidity pool, no unlock supply (or <1%). However there is about 20% of locked tokens: lock type (linear unlock or standard) and lock duration need to be investigated (check "token vesting section" below).

Funds raised & liquidity locked

Do note that the tokenomics chart is only considering the tokens of that project and not the BNB/ETH/etc. raised. The amount of ETH/BNB that the team will receive is:
  • ETH/BNB raised minus the amount (in %) of liquidity locked.
  • If 100% of 1000 BNB is locked in LP, the team receives 0 BNB.
  • If 70% of 1000 BNB is locked in LP, the team will received 300 BNB.
However, in case 100% of the liquidity is locked, this doesn't mean it is safe:
  • Check the circulating supply in the tokenomics chart: how will those tokens be used/sold? Where are those tokens (which wallets)? Are they locked/vested with a competitor? Or are they available and can be market sold, draining the liquidity?
  • If the contract is unaudited:
    • can new tokens be minted and market sold?
    • can fee/tax on transfer be raised?
    • can trading be paused?
    • etc.
  • For how long is the liquidity locked? Can the team remove the whole liquidity in 1 month?

Token Lock/Vesting

If tokens are vested with Unicrypt, you will see all the locks under the tokenomics chart. Otherwise they will appear as "Circulating / Unlocked".
Also ask yourself this question: will the team ever own more tokens than the amount sold during presale once they are unlocked? If yes, how long until this happens: 1 week? 1 month? 1 year?
See next section for details.

Are the tokens vested / locked PROPERLY?

The team has the possibility to lock their tokens through Unicrypt: you will see the amount of locked tokens: Are they all locked? For how long? Is it a linear unlock (i.e. release some token at every block)?

Linear lock and standard lock example

Linear lock warning

Some teams/devs use the "Linear Unlock" in their ILO to have their tokens in a smart contract rather than circulating: this looks "good" on the tokenomics, however token can be already "unlocked in the locking contract", which means a large amount can be withdrawn by the team even before the ILO ends.
Do check the details of linear locks, here is a good example of a proper linear lock, as there is no token release until 8 months later:
The linear lock does not release any token before 8 months time

Is the contract audited by one of our whitelisted auditors?

The audit by our partners have proven to detect things like errors in code preventing a successful finalization of the ILO, customizable tax amount (which in some cases could be changed to 90%+ at any time), unlimited minting, and so on.
No auditor can detect and flag everything suspicious: the findings of an audit depends on many factors and is not an exhaustive list of all potential threats hidden in a code. Do use those findings, that you can read in the full audit report, and not only the passed/not passed audit flag, as a part of your DYOR.

Is the team KYCed by one of our whitelisted partners?

If a team has passed KYC, it is a good sign: it means that the team behind the project should be known by the KYC provider.
However: Do not trust blindly a team and their project because of a KYC badge, an audit and even with 90% of raised funds locked to liquidity. Scammers will always find a way around any process to steal your funds. Despite the KYC process of our providers being as tight and tough as possible, an unfortunate turn of events may still occur.
In case of concerns about a team behavior after a launch on our platform, do get in touch directly with the KYC provider.

Is the Telegram group botted? Are admins open to any question?

Do you only see moon boys? Can you ask question without being muted or banned? Are there thousands of people (bots?) in the tg already saying "good project"?

Is the Twitter account recently created? Is it botted?

Do you see some tweets with thousands of likes and retweets? Are typical answer to those tweets repetitive and pointless (e.g. "Good project")

Does the project use a copyrighted item/picture/movie/anime?

If they use "Ironman" as their token name and Ironman pictures, do you think they were granted a license by Marvel/Disney?
Licenses as such can cost millions: Why are they raising funds then?
If they have a CG trailer which is absolutely breathtaking, and likely costs hundreds of thousands, do they need a fund raising?

Do they have a real product?

Or did you participate based on people shilling it?
If they claim to have a fantastic product, do they have a beta?
If the economic model is based on taxing other investors, isn't it a type of Ponzi scheme? If not, what are the other source of incomes that will benefit all holders and bring this out of the typical Ponzi scheme?
Look for real long term hold with a real product and a sustainable economic model, and with lots of room to grow, especially if you wish to make it through the bear market.

Bottom line

To remain as decentralized as possible, Unicrypt team will not check nor recommend an ILO, unless it was "incubated". Hence a poorly conducted DYOR means you accept the risk of loosing your funds. Avoid this by learning how to sense shady projects and discover solid ones. Come to our tg channel to ask questions.
Empower yourself, do thorough DYOR, invest according to your risk appetite, and be accountable for your investments. This can only help you in your crypto journey.