Avoiding the Scam - What to Look Out For
If you’re like me, when you jumped into crypto investing, the hype surrounding it made it that much easier. After a while, patience ran thin on profits and my portfolio was looking a bit stale. On my social media platforms, I see influencers that I follow begin promoting these DeFi projects. With massive followings, it was a no-brainer that these projects should be legit… right? I'm already looking for ways to boost my profitability so this is definitely a trusted source.
WRONG!
After seeing multiple different posts a day from different influencers for different projects, I decided that it would be time to do a little research to see what this newly generated hype is all about. Luckily, with the plethora of project advertisements flooding my notifications, I noticed something a bit strange. They were all the same...
It’s almost like the codes were copied and pasted in these different contracts and were promoting the same thing. To the moon, 100x return, liquidity locked until 2099, no owner, community-driven, and the list goes on and on. This was my first sign of realizing that something isn’t normal here. If all these “different” projects are promoting the same thing, how is the investor able to decipher which one is actually worth investing in?
I sat there for a few days watching these projects. Whether they were in presale, launching soon, or already up and running, their Telegram channels were busy hyping up the tokens and banning anyone who had any doubt. While FUD is undesirable for any project, this was a bit strange. Why would you ban someone for asking a legitimate question regarding the project’s motives?
99.9% of the time, the developer(s) and project team members are anonymous. They claim to avoid doxxing themselves to protect the privacy of themselves and their team alike. Protecting your privacy is great and all but no wonder... why would you want someone knowing your name and reputation when the end goal is to run off with everyone's money?
Searching through pinned messages, we find the lovely trading chart for the token. Here’s another common denominator… massive green candlestick pump when the token was launched and then the value is dead in the water. Seemed a bit fishy to me, but I kept waiting and watching these projects to see how they recovered. The unfortunate part about this is that they never recovered.
The token would remain stagnant at the bottom and only a small amount of transactions were made per hour contributing to the project. Remember earlier when I said liquidity was locked? Well, all of a sudden, that 78-year lock was unlocked and the liquidity value of these projects went to $0. Telegram channel? Gone. Twitter page? Either gone or already renamed into a different project with the same amount of followers. Influencer advertisements? Deleted.
Luckily, with no trust going into these “investment opportunities”, I was able to avoid getting scammed myself. It looks like the only person going to the moon is the malicious developer who wanted nothing more than to take the funds of new investors all over the world. Burn address for the project? It might as well have been your own wallet address because you were burned the most in the end.
I hope this article allows you to be a lot more hesitant and cautious before throwing your money away. This isn’t financial advice, but speaking from experience I can say that these shitcoins should be avoided at all costs. Even if you profit, it’s still comparable to a pump-and-dump scheme, and depending on where you live, this is extremely illegal. In the crypto realm, we are contributing to a trust-less system, not a moral-less system.
Be safe out there, ask the right questions, and do your due diligence!
Have you fallen victim to a rug pull? Leave a comment below and share your experience(s)!
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