Why this matters before you buy
Your sale needs someone or a pool to take the tokens. If a dev or another large holder sells heavily while buying is weak, the price and your sale proceeds can fall. The holder list, available supply, permissions, and liquidity help you judge that risk.
People may buy because of a story, community, product, or promotion. You still need to check how the token works and what its holders can do. Keep a separate record for the reason people might buy and for the supply checks.
Dumping risk in practical terms
A group may hold tokens across several wallets. Add reliably linked balances to see how much the group can sell. Check what it paid: someone who acquired tokens cheaply may still profit at a price where later buyers lose money.
Watch actual sales, remaining holdings, upcoming unlocks, and other buyers over the same time window. A large holding shows potential selling capacity. Completed swaps show what was actually sold. A lock delays access only for the units and rights it covers.
Selling can fund work or let someone take profit. Review the amount, pace, disclosure, spending evidence, and effect on buyers. Heavy selling into weak demand can damage the market even when the dev says the money is for development.
Other risks to check
| Risk | Practical question |
|---|---|
| More units or changed rules | Can anyone mint, freeze, restrict transfers, change fees, or upgrade the relevant program? |
| Unlocks | How many units become available next, when, and to whom? |
| Liquidity control | Who can remove or change liquidity, and which pool does the lock cover? |
| Weak buying | Does buying continue when the dev's group or paid promotion stops? |
| Incomplete evidence | Are wallet links, purchase costs, private arrangements, or control rights still unknown? |
How to investigate it
Make a list of the holders who could sell, the units available now and later, the controls still active, and current sale quotes for stated sizes. Compare these with actual buying. Save transaction links, pool details, and timestamps. The following sections explain each check.
Practical case — illustrative
At SAMPLE's first snapshot, five linked wallets hold 2m each out of 100m available holder units. Together they hold 10%. Looking at each wallet separately would miss the group's selling capacity. You still need to check whether the creator owns that group, how much it sells, and what the market can absorb.
Keep this record
Write the main risk in a sentence: who could sell or change something, how much is involved, what evidence supports it, and what remains unknown.
Add these findings to your review worksheet →
Check your understanding — answered
The dev has not sold yet. Is dumping risk gone? Check remaining available holdings, unlocks, and liquidity. Keep potential sales separate from completed sales.
The story is convincing. Can I skip the supply checks? Check ownership, permissions, unlocks, and liquidity before drawing your conclusion.
A sale is described as development funding. What should I check? Record the sale and look for outgoing payments and delivered work, then review the effect on buyers.
SAMPLE is made up for this course. Date each finding. For a real token, use current transaction records and platform rules. Inspect shows sampled trades; use external records to check ownership and permissions.