In the current Defi Crypto world we live in, is there any two words put together more than Crypto and Scam? The digital world is one most are struggling to come to terms with and when it comes to digital finance it sends shivers down the spines of the average person.
What has caused digital currency to have such a stigma? well it is all the stories that circulate around from the people who have had money stolen through online crypto scams. It is these stories that need to be analysed to be able to see how the scams were carried out and how the investor could have avoided becoming the next victim of a scam. There are so many different variations of a scam in Defi Crypto and the most common is a Rug Pull, however this is not the only way to get an investor to hand over their hard-earned money.
As the use of social media is a massive part of any crypto project the new wave of scammers run riot in here, from pretending to be a member of the Development team in a Telegram Group you may currently be active in or even creating a duplicate group. I personally have been caught out by a scam Telegram Group posing as a group I was in and offering a deal to good and convincing to pass up, by the time you have realised what has happen you and the others that fell for it have had your money stolen and not by them going in to your Crypto wallets, but by you sending the tokens to the scammers, in which case they can then sell the tokens and there is nothing you can do to recoup them.
Then we have one of my favourites where someone will make a near replica of a team members identity and DM you asking if you can help them out with some funds, this might seem flawed but if you have had interactions with them before why would you suspect any ill doings. Keep this in mind that in the social media space it is widely known that no Developer will DM you first, so remember this rule and it should hold you in good stead in your use of socials to interact with a token and the project behind it.
So how do you spot a scam? Research is key alongside patience, these two things can help you make more informed decisions while making your next crypto investment. If there is a project you are interested in, does the said project have a website with full disclosure and a roadmap outlining their plans for the token’s future, is the website well-constructed? this will also show you how serious the project is. Do they have a big socials following like Telegram, Discord and Twitter if they don’t this really is a sign that cannot be ignored as without socials they are really not promoting themselves across multiple platforms which could leave a trail of breadcrumbs to the scammer, in saying this some groups can add fake members giving the impression they have a large following when they don’t. If they do have socials how is the Development team interacting with the members? Are they communicating on a regular basis or is the chat just full of pictures of rocket ships ready to go to the moon, if this is the case another sure sign there should be alarm bells ringing.
Does the project have their team Doxxed (giving up personal information of who they are) is the project verified through a third party to ensure that there is no hidden malicious coding that could be put in place to cause a rug pull or any other fraudulent behaviour designed to take your money.
When it comes to the lengths that scammers will go it has no end. However, the one thing that can be avoided to stop you from falling for the next scam is avoiding self FOMO (fear of missing out) for this is one of the greatest tricks that is used to lure people to put their money in to a token that is a scam. We all want to make money and we all want it now! however by taking a deep breath and doing your homework you will give yourself every opportunity to not only make money with informed decisions but to be able to keep your money from being stolen from underneath your nose. If there is an opportunity to run the contract address through a scanning tool you should always do so, there are plenty of tools online now designed to help you not get scammed and they are free to use, why wouldn’t you!?
Then you have one of the most conniving schemes I think going around called Dusting, this involves some serious technical skill to produce an address that is sent to any wallet on the blockchain and will appear in your wallet with a certain amount of tokens and they will be worth a fortune. How is this hurting anyone? well the moment you go to sell those tokens the contract will have access to your wallet and begin draining any real tokens you have in your wallet and you won’t even know it’s happening, leaving you with a balance of zero. So, if any random coins appear in your wallet worth $10m just delete them and forget about it and you will be safe. So by taking your time and researching any projects you are willing to invest in you should be able to invest with a strong level of confidence that you will not be scammed. You can always have a third party like Fuddoxx take a look at the contract for you to make sure it is all above board and strengthen your Defi Crypto survival rate…