How can you tell a rug pull/scam Crypto? Ways to avoid rug pull and scam

Have you lost your investments as a result of a scam or rug pull before? You want to participate in IDO presales, but you hesitate. How can you spot scam projects? Which parameters should you look at? I hope you will find answers to such questions in this article.

What is a rug pull in Crypto?

Unfortunately, we often encounter rug pull/scam projects in the DeFi space. DeFi by its nature does not have a centralized control. Many malicious people can come out with a project. They raise funds from people using different IDO and crowdfunding platforms.

How Do I Know If a project is a scam? Ways to avoid rug pull

How do rug pulls work?

After the funds are collected, the team suddenly disappears. Telegram groups are closed, Twitter accounts are deleted. You can’t reach anyone from the team. Yes, it’s a bad feeling. Despite such negative events, people’s interest in DeFi and blockchain is increasing. Because this technology will make radical changes in the finance.

Of course, some may care more about making money faster than the revolutionary change in technology and finance. The DeFi field appeals to both.

If you can invest early in solid projects, you can earn x100. Isn’t it very attractive? If you participate in the presale of a good project and wait a bit, you can earn incredible rates.

But if you invest in a bad project managed by scammers, you could lose all of your investment.

Scammers have many methods. They steal people’s investments by using smart contracts, selling team tokens and many other ways.

Ways to Understand Scam Projects

1-Liquidity pool:

You should learn the features of the platform that the project uses for IDO. Does the platform lock the part of the collected funds that is said to be transferred to the liquidity pool? Liquidity ratio and lock-in period are also important.

Unicrypt Network announces how much of the collected funds will be locked in the liquidity pool and for how long before the pre-sale starts. You can trust these numbers and ratios.

You may be interested: Liquidity Problem in New Coin / Tokens at Unicrypt Presales (ILOs)

Be very careful if there is a liquidity ratio of 10-25%. Also, be very careful if the liquidity lock period is 1-2 months.

2-Team tokens:

The amount of tokens the team holds is important. It is not good if the team has too many tokens and they are not locked.

Because the team can dry up the liquidity pool by selling the tokens they hold. If they do this slowly, we can say soft rug pull, if they do it suddenly, we can say hard rug pull.

 You may be interested: ILO Tokenomics Analysis  : Team Tokens / Dev. Wallet

3-Telegram and Twitter bots:

Check out the official accounts of the project. It is very easy to get tens of thousands of bot followers/members for small money on Twitter and Telegram. Pay attention to this.

4- Research the project:

Search the website and white paper of the project. Don’t believe in shiller and invest. Because they do this job for a fee and they always use expressions like “to the moon, x100, etc”. Don’t believe statements like these if your money is valuable.

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There are many other methods other than the ones I mentioned above. Also, don’t think that the project is a scam as soon as you see one of the issues I explained above. Evaluate the parameters together and make your decision.



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