Lesson 3 - ICOs / Presales with Unrealistic Promises

How it works: An ICO/presale is a way to raise funds before (or just as) a token launches. In a good case, you’re helping finance a real product and receiving tokens that will be used in that product later. In a bad case, there’s no product, no code, and no intent—just a glossy site, a countdown, and promises that ignore risk. The mechanics are simple: you send crypto to a sale address (or connect a wallet to a sale dApp) and receive tokens now or at “TGE” (token generation event). If supply is poorly designed or controlled by insiders, those insiders can dump on day one. If there’s no working code or adoption path, the token’s only gravity is speculation—and speculation without depth falls fast.

A reliable sale shows who’s building, what exists today, what’s audited, how tokens unlock over time (vesting), and where the liquidity comes from at launch. A predatory sale buries those answers under “guaranteed returns,” celebrity noise, or referral trees.

Spot it

• Returns framed as guaranteed or “1000% in a month.”
• Anonymous or unverified team; recycled photos or LinkedIn ghosts.
• No repo, no testnet, no audit; whitepaper full of buzzwords, thin on specifics.
• Tokenomics that give insiders large allocations with no/short vesting.
• Sale flow is a static wallet address or off-site form; questions in chat are deleted.

What to do

• Look for working code (even a minimal testnet), 3rd-party audits, and a clear vesting schedule.
• If you can’t verify people, code, audits, and vesting within minutes, don’t fund. Opportunity cost is cheaper than loss.

How It Plays Out

You land on a site that feels like a product launch—video hero, neon gradient, a promise that this token will “rebuild finance.” There’s a timer in the corner counting down to the presale. The whitepaper looks impressive until you notice it says a lot about the future and almost nothing about what exists now. The roadmap is a staircase of quarters; every step is labeled “phase.”

In the Telegram, the room is friendly until you ask for a repo or an audit. A mod replies with a sticker and a slogan, then your question disappears. The team page shows confident faces; reverse-image search finds the same faces selling project management templates. Tokenomics look pretty—but insiders own a thick slice that unlocks immediately. The sale widget asks you to paste a contribution into a single address—no on-chain sale contract, no caps per wallet, no allowlist. When you press, someone says the partnership announcement is “soon.”

What matters isn’t the shine; it’s the plumbing. Is there code you can read or a public test you can try? Has any security firm signed their name to an audit you can verify on their site? Do tokens unlock slowly for the team and quickly for the community, or the other way around? Where will initial liquidity live, and who controls it? If you can’t answer those questions, the safest answer is no.

And if you did send funds already, act like a grown-up with a checklist: record TX hashes, save copies of the site and chat, and set clear rules for the launch day—small allocations, test withdrawals, and no averaging up into hype. If the launch arrives and liquidity is thin, unlocks are lopsided, or withdrawals fail, your plan is to cut risk first, ask questions later.

Pocket anchors: Code over countdowns. Vesting over vibes. Audits you can verify, not logos on a slide. If the upside is guaranteed, the product probably isn’t.