"Do your own research" is the most repeated and least practiced advice in crypto. Most people "research" a Solana project by reading the website, checking if the price is going up, and seeing if someone they follow on X mentioned it. That is not research — it is a recipe for buying the top of a pump and dump.
Real due diligence is a systematic process. You evaluate the team, the technology, the tokenomics, the market position, and the on-chain data before putting money in. This guide gives you a checklist that works for any Solana project — whether it is a DeFi protocol, an NFT collection, a memecoin, or an infrastructure play.
The Due Diligence Framework
Evaluation is not a single question but a series of questions across six categories. Each category has specific things to verify and red flags to watch for.
1. Team and Background
The team behind a project is the single strongest predictor of whether it will succeed or scam you. Anonymous teams are not automatically bad, but they require more scrutiny on every other factor.
What to Check
Identifiable team members:
- Do the founders have real names and verifiable identities?
- Do they have LinkedIn profiles with work history?
- Have they built anything before in crypto or tech?
- Are they active on X/Twitter with a track record of public statements?
Anonymous teams — additional checks:
- How long has the team been publicly active under their pseudonym?
- Have they shipped previous projects under the same identity?
- Do they engage with the community directly (AMAs, Discord, forum posts)?
- Would anything prevent them from disappearing tomorrow?
Red flags:
- Team members with no history before this project
- Stock photos or AI-generated profile pictures
- Claims of working at major companies with no verifiable proof
- History of previous projects that abandoned or rugged
Verification Tools
- LinkedIn: Cross-reference claims about past employment
- X/Twitter: Check post history, engagement quality, and consistency
- GitHub: For dev teams, verify coding activity and contribution history
- Crunchbase: Verify funding claims and investor relationships
2. Technology and Product
A legitimate project has a working product or a clear path to one. Marketing alone is not a product.
What to Check
Product status:
- Is the product live and usable, or still in development?
- Can you actually use it? Try it with a small amount.
- Does it work as advertised? Speed, reliability, user experience.
- Is there documentation? How thorough is it?
Smart contract security:
- Has the protocol been audited? By whom? Check the actual audit report.
- Are the contracts open source? Verify on Solscan or GitHub.
- Are there any unresolved critical or high-severity findings in audit reports?
- Is there a bug bounty program? How much does it pay out?
Technical architecture:
- Is the protocol upgradeable? Who controls the upgrade authority?
- Are there admin keys that could drain funds?
- Is there a timelock on significant changes?
- Is the code actively maintained (recent GitHub commits)?
Security Verification Tools
For a detailed guide on using token scanners, see our Best Solana Token Scanners guide.
Red Flags
- No working product despite months or years of development
- Closed-source smart contracts with no audits
- Single admin key that can upgrade contracts or drain treasury
- "Audited" by unknown or pay-to-pass auditing firms
- No GitHub activity or documentation
3. Tokenomics
Tokenomics determines the supply-demand dynamics that affect price. Bad tokenomics can sink a good project; good tokenomics can provide structural tailwinds.
What to Check
Supply analysis:
- What is the total supply? Is it fixed or inflationary?
- What is the current circulating supply vs total supply?
- What percentage of tokens are unlocked? What is the vesting schedule?
- Are there upcoming large unlocks that could create sell pressure?
Distribution:
- What percentage goes to the team? (>20% is concerning)
- What percentage goes to investors/VCs? (>30% combined insider allocation is a red flag)
- Is there a community allocation? How is it distributed?
- What is the concentration of holdings? Are top 10 wallets holding >50%?
Utility:
- Does the token have real utility beyond speculation?
- Is the token required to use the protocol, or is it just a governance token?
- Are there fee-sharing mechanisms (revenue to token holders)?
- Is there a burn mechanism or other supply reduction?
Token Distribution Analysis Tools
Bubblemaps is essential for this step. It visualizes token holder clusters and connected wallets, revealing if seemingly separate holders are actually the same entity. If a token's "decentralized" distribution is actually a few wallets connected through funding chains, Bubblemaps will show it.
CoinGecko provides supply data, circulating supply, fully diluted valuation, and unlock schedules for listed tokens.
Airdropped tokens deserve the same tokenomics scrutiny as any other launch. Our look at the Solana Mobile SKR token airdrop is a worked example of evaluating eligibility, supply, and what an allocation is actually worth.
Red Flags
- Team allocation >25% with short vesting (or no vesting)
- Large token unlocks within the next 3-6 months
- Insider wallets that received tokens at private sale prices far below current price
- Token serves no purpose beyond speculation
- Unlimited or uncapped supply with high inflation rate
