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Avoiding Rug Projects: Due Diligence Checklist

10 min read15,000 views2024-01-03BlockJob Team

Accepting a role at the wrong project can mean months of unpaid work, a damaged reputation, and legal risk. Use this checklist before signing any offer.

Team verification - Are founders publicly known with verifiable track records? - Search for their names on LinkedIn, Twitter, GitHub. Do their histories check out? - Has the team been doxxed through a reputable third party (e.g. Worldcoin's proof of personhood)?

Financials & token - Is the token distribution documented publicly? - What % is locked, and for how long? - Check token unlock calendars on TokenUnlocks.io. - Is there a reasonable TVL-to-market-cap ratio?

Technical audit - Are core contracts audited by a reputable firm (Trail of Bits, OpenZeppelin, CertiK, Spearbit)? - Is the audit report public? - Were critical issues found and remediated?

Governance - Is the admin key renounced or held by a multi-sig? - Is there a timelock on critical upgrades? - Are governance proposals transparent?

Red flags - Anonymous team + no audit = high risk. - Unrealistic token valuations and marketing-heavy narratives. - Copy-pasted codebases with no original research. - Anonymous "investors" who are just token buyers.