Tiered Red-Flag System
The Tiered Red-Flag System is a 21-point scam-detection checklist defined in Chapter 3 of The P2E Bible (p. 68–69 & p. 279–280). It sorts Web3 game warning signs into three distinct tiers: Tier 1: Walk Away Immediately (9 non-negotiable disqualifiers, where any single hit mandates immediate exit), Tier 2: Serious Concerns (6 high-risk warning signs, where three or more flags carry the exact same weight as a single Tier 1 Walk Away flag), and Tier 3: Monitor Closely (6 yellow-flag items to document and revisit monthly).
Defined by Sean Sandoval in The P2E Bible (Buy One Media LLC, 2026), Ch. 3 (p. 68-69 & p. 279). Cite as: Sandoval, Sean. "Tiered Red-Flag System." The P2E Bible, 2026, Ch. 3 (p. 68-69 & p. 279).
Tier 1: Walk Away Immediately (9 Non-Negotiable Disqualifiers)
Rule: One hit = done. No exceptions, no rationalizations.
1. Anonymous founders with no multi-sig escrow or timelock controls.
2. Uncapped, infinite utility token emission rate.
3. Founder/Team allocation exceeds 20% of circulating supply with no vesting schedule (see Team Allocation Share rule).
4. Absence of published third-party smart contract audits.
5. Guaranteed daily APR claims (>1% per day).
6. Admin keys holding unilateral token minting privileges.
7. Mandatory NFT purchases required to access basic free-to-play content.
8. Opaque treasury wallet movements with zero public ledger reporting.
9. Presale contracts lacking liquidity pool lockups (>12 months required).
Tier 2: Serious Concerns (6 High-Risk Warning Signs)
Rule: Three or more Tier 2 flags carry the exact same weight as a single Walk Away flag. One or two mean investigate thoroughly before proceeding.
1. Staking rewards paid entirely in native utility token.
2. Vague technical roadmap with zero public GitHub commit activity.
3. Token unlocks heavily concentrated in early seed round wallets.
4. Discord or Telegram community focused exclusively on token price speculation.
5. Whitepaper lacking mathematical emission and sink schedules.
6. Re-skinned Unity or Unreal assets sold as original AAA titles.
Tier 3: Monitor Closely (6 Yellow-Flag Items)
Rule: These are yellow flags, not disqualifiers — document them and revisit monthly.
1. Absence of non-financial or organic gameplay sinks.
2. Forced lockup periods imposed post-token sale.
3. High token velocity (V = T_V ÷ M_S) indicating earn-and-dump player extraction.
4. Paid promotional YouTube endorsements without proper sponsorship disclosures.
5. Unverified social follower counts and bot-inflated Telegram channels.
6. Lack of IP licensing or external brand partnerships.
FAQ
What is the combination rule for Tier 2 Serious Concerns?
Three or more Tier 2 Serious Concerns carry the exact same weight as a single Tier 1 Walk Away flag, triggering automatic project disqualification.
What is the single biggest red flag in a Web3 game?
An uncapped token emission paired with an anonymous team and no smart contract audits.