If you was hanging around the crypto space for even a little bit you probably heard stories about peoples turning a few hundred dollars into millions. Usually them stories comes from guys who got in super early. That is basically what a crypto presale is. Its the change to buy tokens before they gets listed on public exchanges like Binance or Coinbase. But is it save? Well, it depend on alot of things.

Investing in presales is kinda like the wild west. There is gold out there but there is also bandits and snakes everywhere. I been investing in these for couple year now and trust me I learned some lessons the hard way. So before you throw your hard earn money into the next "moonshot" lets talk about the actual risks and rewards plus 7 tips to help you survive.

The Rewards: Why Do We Do It?

The biggest reason anyone invest in a presale is obviously the money. When a project is in presale stage the price is usually much lower then the listing price. If the project actually take off the gains can be insane. We talking 10x 50x or even 100x. You just dont get that buying Bitcoin or Ethereum anymore unless you waits ten years.

Another reward is being part of community from day one. There is a excitment in helping a project grow joining the Telegram groups and seeing the roadmap get completed. Plus some presales offers bonuses or extra tokens for early buyers which is nice.

The Risks: The Scary Stuff

But we gotta be real. For every project that go to the moon there is probably 50 that crash and burn. The biggest risk is a "rugpull". This is when the developers takes the money raised in the presale and just disappear. They delete the website the twitter and your money is gone forever.

Even if they dont steal the money the project might just fail. Maybe the team is incompetent or the market conditions is bad. Also liquidity is a issue. After presale if there isnt enough liquidity added to the exchange you might not be able to sell your tokens even if the price look high on the screen.

7 Tips to Stay Safe in Presales

If your gonna risk it you need to be smart. Here is 7 tips that helped me not loose everything.

1. Research the Team This is number one for a reason. Do you know who is running the project? Are they "doxxed" (publicly known) or are they anon? While some legit projects has anon devs it is much riskyer. If you can find there LinkedIn profiles and see they have experience in blockchain thats a green flag. If the CEO is a cartoon character with no history be careful.

2. Read the Whitepaper (Actually Read It) I know its boring. But you have to skim it atleast. Does the project actually solve a problem? Or is it just a meme coin with no utility.
Alot of scam projects just copy and paste whitepapers from other legit tokens. If the text sound generic or has alot of spelling mistakes (ironic I know) stay away.

3. Check the Tokenomics You need to look at how the tokens is distributed. If the team keeps 50% of the supply for "marketing" or "development" that is a huge red flag. They could dump them tokens on you as soon as trading start. Look for a fair distribution where the community own the majority. Also check for "vesting" periods which means the team cant sell there tokens for a certain amount of time.

4. Analyze the Community Go into there Telegram or Discord. Are there actual conversations happening? or is it just bots spamming "LFG" and "To the moon". If you ask a difficult question about the tech and get banned or ignored that is a bad sign. A real project will have a team that answer questions patiently.

5. Look for Audits Smart contract audits is important. Companies like CertiK or SolidProof checks the code to make sure there isnt bugs or "backdoors" that let the owner steal funds. If a project say "Audit coming soon" wait for it. Dont take there word for it.

6. Don't Fall for FOMO Fear Of Missing Out is your enemy. Scammers loves to use countdown timers and phrases like "Last chance to buy!" to make you panic. Take a breath. If a project is good today it will be good tomorrow. Never rush a investment decision just because you see a timer ticking down.

7. Have an Exit Strategy Before you even buy decide when your gonna sell. Are you selling half when it does a 2x? Are you holding for a year? The worst thing is watching your investment go up 10x and then riding it all the way back down to zero cause you got greedy.

Conclusion

Crypto presales is defi not for everyone. It is high risk high reward. You can make life changing money or you can wake up with a wallet full of worthless coins. But if you do your homework follow these tips and only invest what you can afford to loose it can be a thrilling ride. Just remember nobody knows the future no matter what the influencers on YouTube says. Stay safe out there!