Many BTC pamps’n’damps ago, I laid out some Tokenomics Red Flags for anyone looking to do some of that famous “DYOR” meme.
But there’s another important DYOR metric that tends to fly under the radar for a lot of beginning crypto investors: the Quality of the Discord.
In all my roving, lurking, and enjoyoring over the past year, I’ve come to identify 5 Red Flags for any DeFi project’s Discord server. None of these red flags alone are enough to spell doom for a project, but if you see 2–3+ together, it’s a sign to ponder your planned investment there a bit more.
Discord Red Flag #1: No Dev Presence
I get it. Developers are busy people and rightfully so. They make the project. Without dedicated devs, who are actually working on their project, the whole system would probably die.
However, if you’re in a server and you see that the devs used to be active and for some reason they’ve gone silent, some warning bells should ring. They may be working hard on the project somewhere in the shadows, but there’s no reason they can’t check in on the discord to say “gm” or chat a bit with the investors.
In my experience, this inactivity usually means one of two things: the devs’ relationship with their investors has soured to the point where interaction would be exhausting OR the devs are actually done with the project and looking to move on (or have already moved on internally).
Either way, it’s cause for concern, especially in the latter case.
Discord Red Flag #2: A Sus Mood
Take a glance at a few of the more active channels. Look at the interactions between the members themselves and also between the mods and members.
Do you see a lot of f*ck you, bro! getting thrown around?
How about any of these? FUUUUDD! SELL ME X TOKEN AT X PRICE AND GTFO! CHILL BRO!
Or any of these? SCAM! RUGPULL! GIVE ME BACK MY MONEY!
There’s no way to “control the crazy” or the anger in these DeFi metaverses, especially when people are overinvested.
An excess of the comments above most likely indicate an exploit or something suspicious in the recent history of this project. A hostile tone should signal more research before investing.
The flip side of this kind of “angry chatter” would be complete silence (or maybe an occasional “this project ded”). This isn’t the biggest red flag out there, but it’s a potential sign that the anger has been silenced (through mass banning) and also that the more upbeat members don’t have anything positive to talk about.
Either way, angry or silent, it’s sus.
Discord Red Flag #3: Low Effort, Cloned Server
Check the channel names. Are there simple spelling mistakes?
Check the rules. Are there repeats or obvious copy-pasta?
Check the entry requirements. Is there any verification process?
Check the basic server setup. Are the “welcome messages” to new users being displayed in the “general chat” channel?
And finally, check the channels themselves (such as the FAQ). Is there anything actually in them?
The answers to these will show how much the project cares about their Discord server. And of course, just because a project doesn’t care about their Discord server doesn’t mean it’s a bad one. But still…is it that hard?
Discord Red Flag #4: Mercenary Mods
This one requires a little more time and investigation, but it’ll become evident once you know what to look for.
Mercenary mods are outside people hired (at a very low salary) to run a Discord server. Many times these mods aren’t familiar with Discord itself (having come from Telegram most likely) or they aren’t plugged into the chat (and instead wait for pings to become active).
Also, in some cases, these mercenary mods are not native English speakers, which by itself is definitely not a problem — English is a global DeFi language shared by all !— but when it’s English for a position of customer service that requires the ability to understand subtext and nuance, that’s where more advanced English fluency is helpful.
But the main point about mercenary mods is that in many cases they aren’t actual users of the protocol itself nor are they familiar with how the protocol works. Too many times I’ve seen these mercenary mods misinforming users on how the system works or merely acting as a go-between for the users and devs, even with the simplest questions.
For sure, the use of mercenary mods is necessary and legitimate in many cases and it’s nothing against these mods themselves — most of them are just people looking for a decent-paying job in crypto.
However, the overuse of these types of public representatives can eventually create a disconnect between the protocol’s team and its actual users — something that Discord can easily remedy when used right.
Discord Red Flag #5: Oversaturation of LFGers
“LFG” — “To the moon!” — “How we doin’ fam?!” — “Diamond hands, bitches!”
These upbeat frens of ours are everywhere. Their energy is useful and often it’s a good sign that people are hyped about a project. Buuuut…at the same time…too much — and I mean every other sentence — is too much. Elon Musk himself might use these kinds of hype phrases every now and then, but I guarantee there aren’t multiple Elon Musks running around that server (just the one Elon maybe).
Most likely it’s a bunch of kids hopped up on Tide Pods and paint fumes that are trying to 10x their $20 off each other — please don’t add your $2k+ to their exit liquidity. If you see this in a Discord server, it’s not always the protocol team’s fault — so if you’re interested in investing, maybe first wait til the LFGers have faded away into the darkness from whence they came.
Thus ends my DeFi Discord Red Flags. Did I miss anything? Did I speak terrible injustice against anyone above? I wanna know!
Come join me in NomDAO Discord — one of my favorite spaces in all DeFi (we’re on Solana).
Or perhaps in Passage Fi Discord — soon to be one of my fav spaces as well (we’re going to be on Cronos).
