How I Fell For An Obvious Crypto Scam And How To Identify And Avoid Defi Scams

It's really painful to type this but I have to do to help out the thousands or millions of others out there so that they don't get into similar situations!

I don't blame the people who fell for the squid game crypto scam because I fell for something similar with all the years I have been in crypto!

How I Fell For An Obvious Scam

So y'all remember the time Mark Zuckerberg to h the CEO of Facebook posted his two goats named Max and Bitcoin?

If you don't remember let me post a pic for you below.

This happened around May of this year

Image Source

So some crazy mofo went ahead and created a Bep20 token called ZuckGoat! In fact many tokens were created in that period!

Remember anyone can create any kind of token on many of these blockchains, you can read more about creating tokens online.

So I am in many crypto groups, and in one group an "influencer" tells the group members to buy the ZuckGoat token!

He has dropped some gems in the past with notable success and I got tempted to test this out too.

So I bought the token(with pocket change) and it skyrocketed and then fell in like 2 hours!

I just checked my Trust Wallet and I still have a billion of ZuckGoats 🤣

So folks that how I got scammed of I think either 10 or 20$ .

The truth of the matter this has been one of my dumbest decisions in the Crypto space! I didn't research about the coin,token metrics and the rest.

I just blindly followed the group "influencer" ! So this was solely on me .

It was a learning lesson for me .

How To Identify and Avoid Defi Scams

Let me now talk of what I was supposed to do before I bought the ZuckGoat token or what the who got scammed with the Squid token should have done.

1. Project Team Members

The easiest way to identify and avoid a defi scam is by going through the project team .

For the uninitiated, Defi literally mean decentralised finance where everything done by banks like lending, borrowing , loans , earning interest can now be done in crypto and anyone can participate!

In short anyone world over can participate in Defi without any barrier, but it also has its risks like the one this post is about, scams.

So before you Ape or get into(or buy their token) any Defi or crypto project, you must first look at the founders.

Does the Defi project even hvia website? Are the founders and project team members listed on it?

Yes, the creator of bitcoin is still unknown upto know, so you might say I don't have to put much emphasis on team members !

Yo, Bitcoin is bitcoin and is king and is undisputed! For this other projects you must find out the team members.

If the team is just names on the website and no links to any social media accounts, then take precautions!

Now If there is no trace of a team at all then please never invest in that project.

Why would people who trust their project mot show themselves.

So always check and vet the team so that in case of anything you or others can reach them.

It's so easy for a project with an anonymous team to rug pull than for a project with a team .

2. Project Usecase

Another on how to identify and avoid Defi scams is through vetting the project Usecase.

What does the purported project do? What's the real life Usecase ?

In my case of ZuckGoat, it didn't have any usecase at all just hype which was similar to the squid game token.

Scammers know how to utilize hype very well, we all know squid game is among the trending series or show at the moment, so scammers use that opportunity to lure unsuspecting people into their scams.

As I said earlier anyone can create a defi project and just copy other projects! So ask yourself what new thing is this new project adding to the competition?

So the project Usecase is also a point to consider when investing in these Defi projects.

3. Smart Contract Audits

Now I know this sounds alien and so technical to the new people in the space hehe, but you have to know these things.

Y'all say crypto is hard, but do you remember in high school how shit was difficult too but we persevered because we wanted that certificate?

What did you first think when you heard of a bunsen burner,moonsoon winds, mole concept, coral reefs ( I had to throw it in coz this shit fucked me up a lot haha) and other stuff we suffered with at school.

So If you've decided to be in Crypto, you must learn daily because here you can earn while still learning!

If you don't understand what smart contract audits are just copy and paste it now on Google and take like 5 minutes getting an overview of it.

Image Source

In crypto we don't encourage laziness especially when all the info is available for free on the internet!

Okay for the lazy ones just under that above image is a link to what smart contract audits are, go read it.

Smart Contract Audits are expensive are meant to make sure the code of the project is running security since crypto basically runs on code.

4. Token Distribution

Another way on how to identify and avoid defi scams is looking through the token distribution.

If the founder allocattes over 50% of the tokens to themself that wouldn't be a good sign because he can dump them on you!

Are the team tokens locked for a long period of time ie years and not just months?

Since this is also a technical topic, I would implore you to go and read more about crypto tokenomics

5. Development Activities and Social Media activity

Since defi and generally crypto is open source,the project should available the public with their souec code which is on GitHub.

Is there any ongoing development on the code or their GitHub was last updated a year ago.

Remember that this activity can also be faked sometimes,but if more technical people complain about the code activity then that can be a red flag!

For the non technical people you can see the activities on their social media accounts, does the project have social media accounts or even a community?

If the social media accounts are lacking or inactive for long then you could think twice.

Anyway in summary always make your own research something in crypto called DYOR - Do Your Own Research.

Another thing you shouldn't forget is this; Never invest more than you can afford to lose even the project passed all what I have talked about above.

Never invest what you can't afford to lose unless it's your personal project!

If you loved this post, comment on your experience with scams and share to your friends.

For those on Hive , upvote and reshare .

Love
Jarau Moses

Posted Using LeoFinance ^Beta