What Does a "Verified" or "Renounced" Contract Mean in Crypto?

If you have been looking at crypto projects for any amount of time, you have probably run into the terms, "verified" and "renounced." These terms are used when discussing a token’s smart contract and can help provide the investor with some crucial information when deciding whether or not to invest in a project.

But what do they really mean? And more importantly, are these a good or a bad thing for you as an investor?

What Does Verified Contract Mean?

A verified contract is where the developer has uploaded a human-readable “plain text” version of the contract code which is automatically compared to the version the blockchain has to ensure it matches. This is important because sites like Etherscan display the text version for users to dig into a contract's code.

The risk of a non-verified contract is that a user cannot verify what the contract actually does. This is a concern because you are fully (and blindly) trusting the developer. The general understanding is if a contract is not verified, it is probably a scam, as there is no legitimate reason not to verify the contract.

So yes, a verified contract is in fact a good thing!

What Does "Renounced Contract" Mean?

Renouncing a contract is a fancy way of saying the developer is giving up ownership or control of the contract, and with that, the ability to make future changes using the contract.

There are pros and cons to renouncing a contract:

Pros:

• Taxes cannot be changed

• Typically limits changes that could affect an investors

• Cannot black list a wallet

• Can provide confidence to investors that items will not change

Cons:

• Unable to blacklist bots

• Unable to whitelist exchanges

• Unable to modify taxes (e.g. push more of the tax to marketing vs development)

• "Typically" means whatever is set in the contract is how it will remains

So while a renounced contract is more of a grey area in terms of "good" or "bad," it's important to know this piece of information when you're interested in a project. Overall, the general sentiment has shifted from “You must renounce” to “It is ok to not renounce as long as you have valid reasons”.

It is also important to note that there are scammers who will put code into contracts that allow them to perform certain actions even when the contract is renounced! Some scammers will even put code in to regain contract ownership. This is why Quick Intel’s scanner doesn’t just tell you if the contract is renounced, but also if any actions can still be run or if the ownership can be regained.

How Can I Find Out If a Contract Is Verified or Renounced?

Finding the status of a contract has never been easier! Quick Intel’s scanner not only displays a simple "yes" or "no" for verified and renounced information, but it also dives deep to ensure there is no other hidden scam code in the contract. This information is displayed in an easy-to-understand manner to help you understand all the risks so you can make well-informed decisions.