How do you avoid rug pulls in crypto? Let's discuss this in this post.
Crypto community has faced a lot of rug pulls over the years. And smartBCH community had it's turn of the rug pulls this week. More than 2 tokens have rug pulled this week. I recently saw a pattern with those tokens doing rug pulls this week. I also posted my views on the same here.
This is not limited to the smartBCH chain either considering recently even the magicCake doing the rug pull on Binance smart Chain too. I thought I should be adding my views on How to avoid Rug pulls.
So let's discuss how to avoid rug pulls in Crypto DeFi?
Image Credit: ytimg
Let's take a look at some of the signs that could give you an idea on how the rug pulls can be spotted in advance.
Recently there was an increase in the amount of projects which used free hosting from blogger or some free hosting to host the project document or website content in general. Ask yourself, this project claims to want to go to the moon with it's price but can't even afford the domain name and hosting?
A lot of projects who wanted to dethrone ethereum used the code of Ethereum at first before forking their own from scratch. This is understandable if they want to develop the blockchain. But you can't even afford content writer for website? Imagine many such tokens are copying the content of each other and can't even afford original content. They can rug pull any day.
We can all understand some of the decentralized project has anonymous and unknown people. But most of such projects showing the getty images of some people as a part of the team? This is a sign that the people behind such token are fake too. You can't put your own images? So don't add fake stock images too.
A lot of project influencers of the coin tend to preach the future growth without any strong foundation for that claim. Like this project will reach price like bitcoin. It will go to the moon. But many of those tokens don't even break the 10 cent mark either. Always question the growth claims without proof. If there are less proofs being given for the growth then there is a problem.
Many coin or token projects have 1 page setup of the website. And they add nothing to their coin setup. A lot of social media profiles of such coins are nothing but just news feeds of other tokens and regulation posts. But nothing really posted that would add confidence or lets people know about the coins more either. Which is a shady sign about any token projects.
What type of investors does your coin have? Does it have community value being pumped? What does it adds to the coins base to have a strong value? Each month or year what would make it pump? Ask this to your coin's project owner or team if they can't answer, then time to wrap up the investment.
Are you buying coin because Elon musk says so? Are you buying because justin beiber says so? If that is your thought process of investment then you are on a path of rug pull. Because influencers and celebrities are paid to preach. Just because successful person invests into the coin does not mean you would become rich like them. Success for each one of us has different path and no two people can have it the same.
I posted about this cycle on noise.cash. A lot of people didn't like my opinion because it has reality of how the whales manipulate the market. Whales want you to hodl so that they can take the money out. Never listen to whales but do what whales do and exit the market when you have enough funds in the hands. No greed, no drama, just plain exit. Don't become part of the HODL religion. Secure yourself.
A lot of people can see and understand these signs of the rug pull but the financial gravity of life changing event consumes them. They make the move of investment or HODL in purely that zone. If you want to be on the safer side, it helps when you spot some of the above signs and decide for your own self.
At the end, do your own research.
