High correlation between crypto assets increases portfolio risk during downturns. Diversifying across uncorrelated assets helps manage volatility and improves long-term risk-adjusted returns.
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Governance tokens give holders voting power over protocol changes. They promote decentralization but often suffer from low participation or whale dominance. When well-designed, they align incentives and enable responsive, community-led evolution.
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To identify potential risks in an airdrop project, start by checking if the project has a clear, transparent roadmap and team details. Be wary of projects that lack a comprehensive whitepaper or whose team has little to no prior experience. Additionally, watch out for projects that ask for excessive personal information or payment to participate—these are red flags for scams. Check the community's sentiment on platforms like Reddit or Telegram. A lack of engagement or negative feedback could signal underlying issues. Always verify the legitimacy before getting involved.
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