In this lesson
- get a checklist you can go through in ten minutes
- learn to find authorities, holders and liquidity in a block explorer
- find out which signals mean "hands off"
No check turns a token into a good investment. But it can expose tokens built to take your money. Ten minutes with a block explorer saves a lot of money – and above all teaches you to look under the lid.
Where to look#
A so-called block explorer is a website where you can look up any address, token or transaction. For Solana, for example Solscan or Solana Explorer (mentioned as examples). You paste the mint address and see everything recorded about the token.
The checklist#
| What you check | Warning sign |
|---|---|
| Mint address | you got it from a link in a chat or an ad, not from an official source |
| Mint authority | not revoked – the creator can mint more tokens |
| Freeze authority | not revoked on an unknown token – it can freeze your account |
| Token extensions | a transfer fee, a permanent delegate or a custom program run on transfer |
| Top holders | the ten largest addresses hold a big share of supply (excluding the pool) |
| Liquidity | a small pool relative to market value; pool shares neither burned nor locked |
| Age and trading | the token is a few hours old, volume comes mainly from a few addresses |
What to watch for#
- Holders. Do not count the liquidity pool and burn addresses among the "top holders". Check whether a group of new wallets got their SOL from the same source – that is what a creator hiding behind several accounts looks like.
- Liquidity. If the creator can withdraw the liquidity from the pool at any time, they can rug pull at any time. Burned or locked pool shares lower the risk but do not remove it.
- Test sale. Buy for a few cents and try to sell. If the sale fails, you are in a trap you can only buy into. It costs two fees – cheap insurance.
- Automatic checks. There are tools that rate tokens with a "traffic light". They are useful as a first filter, but scammers know them and can get around them.
A green check is not a recommendation
A token that passes every check can still lose 99% of its value – just more slowly and "honestly". The checklist protects you from a scam, not from a bad investment.
Common myths#
- "The mint authority is revoked, so the token is safe." Freezing, extensions, holders and liquidity remain.
- "Many holders = a healthy token." A thousand addresses can belong to one person.
- "The checking tool showed green." It is a first filter, not a guarantee.
Summary
- Always start with a verified mint address from an official source.
- In the explorer, check the mint and freeze authorities and the token extensions.
- Check the top holders (excluding the liquidity pool) and the size and locking of the liquidity.
- A test sale exposes a trap; but even a clean token is not automatically a good investment.