In the last few years, crypto has created opportunities for the average person to invest small amounts and make great gains. For some, those gains provided financial freedom, for others they turned into massive losses. Crypto is truly an interesting space. Unfortunately, that earning potential invited scammers to the playing field. These are known as rug pulls in the crypto community.
A rug pull is where developers/founders abandon a project and drain the funds for profit. They typically promote the project/token in an effective manner oftentimes appealing to crypto trends like DOGE, SHIB, or whatever is in the spotlight at the moment. Then they raise a large amount of funds in a presale period or short amount of time and announce it to masses. Then they lock the liquidity, prevent selling, withdraw all funds, delete their socials, and go silent. The project becomes no more and just like that, investor’s money is gone.
People have lost unheard amounts in rugs, whether the rugs are instant or slow in nature. There are malicious crypto developers/projects out there. The Cronicle knows this and wants to protect you by showing you how to spot a rug and what red flags you should look out for.
Spotting a Rug Pull
The following tips come from CoinTelegraph’s How to Spot a Rug Pull in DeFi . Please remember to do your research and understand that decentralized finance is very risky. Only invest what you can afford to lose.[embedyt] https://www.youtube.com/watch?v=VlIcoKJsIP8%5B/embedyt%5D
With almost anything there’s risk, whether it be large or small. Crypto is no different. As said above, the best thing to do is research the project and keep these tips and red flags in mind when investing. Crypto is a volatile space. Although there’s great risk, there’s also reward. It’s okay to ask for advice, but also take advice with a grain of salt. It’s your money, so invest it wisely.
When doing your due diligence, it never hurts to hop into our Telegram group, t.me/thecronicle, and ask others for their opinions.