Tony Drummond unpacks crypto’s biggest red flags

A digital token can go from idea to millions in minutes – fuelled by a smart contract and a surge of online attention. In crypto, fortunes rise and fall faster than most can react.

Tokenomics expert Tony Drummond told The Crypto Radio how he navigates this chaotic landscape, breaking down intricate concepts into digestible insights for everyday investors and curious newcomers.

Tokenomics: more than just digital money

"Imagine tokens similar to hard currency in a video game," Drummond said. "Just like Candy Crush has its own in-game currency, blockchain projects create tokens with specific purposes." These digital assets aren't just speculative investments, but can serve as payment systems, reward mechanisms, and community incentives.

That distinction matters. While many people chase short-term gains, Drummond stressed that tokens have the potential to power entire ecosystems – if designed properly. Without a clear function or sustainable distribution plan, even the most exciting token can collapse under its own hype.

The wild world of memecoins

Drummond addressed the controversial memecoin phenomenon head-on. "Most of the time when you're buying a memecoin, you ideally want the community to own most of those tokens," he said.

The red flag? When a small team controls 80-90% of a token’s supply, it’s likely a potential scam. That kind of imbalance doesn’t just raise questions about fairness – it sets up a situation where insiders can tank the price by selling off their share once hype peaks.

And while memecoins often lack utility, Drummond believes they still play a role. They can act as entry points for everyday users. "The guy that installed my kitchen cabinets was asking about Shiba and Doge, not complex blockchain platforms," he shared. In his view, the humor and accessibility of memecoins can help onboard people into the crypto space – even if they don’t stay there.

Community: the heart of successful tokens

One of Drummond's key insights is the critical importance of community building. "A realistic time frame from community building to token launch is generally three to six months," he explained. This isn't just about marketing, but about education and genuine engagement.

Drummond, who helped grow a project to 75,000 holders, said success relies on creating "bottled energy" – a community that’s genuinely excited and informed.

But that doesn’t happen by accident. “All you can control is your marketing, your exposure, your branding,” he said. “Build a real community of people who want to support you.” In a crowded market, that kind of loyalty can make or break a project.

"It's almost like a game of Where’s Waldo," he added. "If you're a quality builder, how do you stand out among the noise?"

Investing wisely: red flags and smart strategies

Price charts can reveal more than trends – inflated valuations and sudden drops are key red flags to watch. Photo: Unsplash / Austin Hervias

For potential investors, Drummond offers clear advice. Look at token allocation percentages. Projects where investors hold 25% and the community only 2% are red flags. “Does it feel like you're the underdog?” he said. “If that’s the case, don’t buy it.”

He also warns about inflated valuations. Many new tokens launch at unrealistic billion-dollar valuations, making future growth nearly impossible. "Now you're more likely to go down because you're overvalued," he said.

Another issue is insider trading. Many retail investors don’t realize how often teams pre-allocate tokens to insiders before the public even hears about them. "If a team already knows that a token is going to be launched in advance, then they can do things called insider trading... They can give out to all their friends and say, 'Hey, this is going to come out soon.'"

Then there’s inflation. Even if a token looks fairly priced at launch, that may not last. "If I look at the circulating market cap... as those tokens are going to release over a few years, that's going to be inflation, that's going to get me destroyed."

Making crypto understandable

A key point Drummond returned to throughout the conversation is simplicity. If a project or explanation leaves you confused, that’s a warning sign.

"A confused mind will never buy," he said. "If someone can understand this now, they're more likely to buy into this because they know they're buying a dot coin." Drummond believes that clarity isn’t just good marketing – it’s essential for mass adoption.

This is also why he encourages founders to stay focused on communication. “People don’t buy what you do, but they buy your mission of why you’re doing it in the first place.”

Practical advice for newcomers

There’s no promise of overnight riches here – just grounded advice rooted in caution, curiosity, and clarity. “Take your time. Don’t put in more than you’re willing to lose, and always do your due diligence.”

Newcomers, he said, should stick to reputable launchpads, learn a token’s purpose, and ask the right questions. Without that foundation, it’s easy to get swept up in hype – or fall into a scam.

The man behind the expertise

Drummond's background is as colorful as his virtual background – which features a space suit, cryptocurrency logos, and portraits of innovators like Einstein and Ben Franklin. A former hacker turned process improvement consultant, he brings a rare mix of technical insight and practical know-how to crypto.

He doesn’t present himself as a guru or a gatekeeper. Instead, he wants to help more people ask the right questions, especially in a space where those who shout the loudest often get the most attention – even if their projects aren’t built to last.

Listen to the whole interview on The Crypto Radio's live player or in The Pulse podcast.