How to tell if a project has problems from a token distribution

Author: Riyue Xiaochu Source: X, @riyuexiaochu

Sanctum has basically been reversed, and there are many complaints online. From the token distribution, it can be seen that this project is unreliable.

Let me explain the analysis logic in detail.

1. Team share is too high

   First of all, the most obvious is that the team share accounts for 35%, which is very high. The team share of most projects is around 20%, and some projects are only around 15%. If the team share is too much, the distribution in other places will be reduced. For example, only 25% of the shares are reserved for the community.

2. Abnormal Liquidity Provision

   The liquidity provision accounts for 25%, which is also the highest ever. The liquidity provision of general projects accounts for 5% at most. Liquidity provision is generally divided into two ways: one is in the liquidity pool of decentralized exchanges (DEX), and the other is to go to centralized exchanges (CEX), and this part of the chips can be sold openly.

3. Multi-signature tokens have hidden dangers

   Although Sanctum officials seem to be very open about multi-signature, there may be many high-sounding reasons to transfer these tokens in the future. For example, Sanctum has received financing, and the official has also released PR for publicity. However, there is no share of institutions in the token distribution, and multi-signature tokens can be transferred out for legitimate reasons in the future.

4. There are problems with the airdrop

   100 million tokens were allocated for airdrop, but most of the people on the Internet were complaining about being robbed. Therefore, there is a high probability that there is something fishy going on.