Understanding the Risks of a Crypto Bull Market

You’ve likely already heard about numerous scams in the crypto world. If you’re new to the crypto community, it’s crucial to be aware of the potential dangers you might encounter. I can provide you with a list of the most common scams in the crypto space: phishing, Ponzi schemes, pump and dump, and rug pulls, among others but I think and AI will provide you that info and it will be more fun if I write about them if you and I were just chatting about them.

In this post, I will attempt to explain some of the more common scams in a way I hope any one can understand.

The social scammer

A quick search on Youtube about a token will spot you a lot of videos with a thumbs suggesting crazy profits among other legit youtubers that try to explain you the token and the project behind it.

Some youtubers can be legit specially with large communities. But some videos are made by scammers that they will use any neuro marketing trick to steal your tokens.

For instance if you do a quick search in youtube about , 718% reward maybe you will find this guy

A handsome guy trying to tell you how to loose your tokens

Probably this guy is not even an scammer is just a guy that was paid to make a video with a script in a platform similar to fiver. I’m even suspecting that he doesn’t even know what he is talking about. In April 2024 you can fin some of this videos if you search 718%. These scammers have spread their video with different tokens, in the video they guarantee you that if you click on the despcription link (pleas don’t click) you will get a 718% profit just by staking some other token of your wallet. However, the link will send you to an impersonate site that is a clone of an existing one like pancake swap or uniswap but is not THE real one. And of course instead of reward you they will steal all your tokens and you will never see them again, when you follow all the steps they explain in the video.

be careful it can be that guy too

Another good looking guy introducing you in a X scam

If you have more info about this guys let me know in the comments. I don’t know maybe they can be made by ai like heygen.

Bottom line of this scam is to make you click on the link, connect your ewallet and confirm the transaction to transfer your tokens to the scammer’s wallet.

How to avoid this scam

First if you want to follow the advice of a expert youtuber you should check the comments of the video, the number of videos, watch some of them check if they make sense etc Or jus check some recommendations from other people that you trust an have more experience in the crypto world.

Second never click a link directly without knowing the source of it, specially when you re going to connect your ewallet with all your funds. Another advice related to this is, that you can create multiple ewallets an use one ewallet to connect to the sites and another wallet to store your funds and never connect this wallet to any dapp right away. This way if you ever get scammed you will only lose the funds that you have in the wallet that you connected to the site.

Some similars scams can be any other social contect that get you to click on a link, like a telegram group, a twitter account, a facebook page, etc and scam you in a similar way.

Regarding socials, The giveaway scam!

Another classic one, related to socials is an scam where you have to sent a token to an address and you will get a lot of tokens back. Once you send, yeah you got it, you will never get your tokens back. The scammers usually create live videos with some famous person with a very good reputation in crypto space like Elon Musk or Vitalik Buterin and they will say that they are giving away some tokens and you have to send some tokens to an address to get a lot of tokens back.

In the screenshot video below, you can see vitalik, in the video is never saying anything about the giveaway, the scammers are just using his image to scam you with wrapped video with the text of the giveaway.

Vitalik wrapped to scam you

How to avoid this scam

If you see a giveaway that is too good to be true you should be aware that this is a scam, never transfer any token to anyone, dapps works differently they will usually ask you for permission to transfer the tokens and you will have to confirm the transaction. If you see a giveaway that is too good to be true you should be aware that this is a scam, never transfer any token to anyone, dapps works differently they will usually ask you for permission to transfer the tokens and you will have to confirm the transaction.

The nft collection no one knows with a crazy price AKA Wash trading

Just a random collection from opensea, not scammersss

This is a very common scam in the NFT world, you can find a lot of collections with a lot of nfts that no one knows about them and they have a crazy price. The idea is to get your attention and make you think that you are buying something that is worth a lot of money. But the reality is that the price is just a fake price that the scammer has created. It consist on creating misleading information to make you buy.

Beside make you buy the scammers can do wash trading to scam the platform, some platforms have a ranking of the most traded nfts and the scammers can use this to get some rewards from the platform. In other cases not necessarily scammers do this kind of wash trading for a token to get the minimum volume to get listed in a big exchange.

How to avoid this scam

There are some platforms that collect data about the nfts and they can help you to detect this kind of scams. Some of the most common indicators of wash trading are:

FootPrint Analytics

https://www.footprint.network/research/nft/nft-wash-trade-stats/top-most-wash-trading-collections?series_date=past90days

• A specific NFT is repeatedly traded by the same address over X times in a single day, while no other NFTs from the same collection are traded.
• A particular address conducts frequent transactions involving the same NFT.
• An NFT collection experiences rapid, repeated sales without any associated marketing or promotional activities.
• The average transaction price on marketplace A is X times greater than that on marketplace B.
• An NFT is sold for a price X times higher than the lowest available sale price for any NFT in the collection.
• The same wallet addresses are responsible for financing all the dubious transactions associated with buying and selling the NFTs.
• There is consistently high trading volume that deviates from the norm.

Every blockchains has scanners where you can check the transactions as bscscan for bsc or etherscan for ethereum. But is not easy for every one to know how to analyze this data. If you want to be a profesional investor you will need to learn this analysis or pay for profesionals that can help you on this.

The rug pull

When you invest in a project you usually do on a promise that the project will be developed and you will get a profit from it. But some projects are just not realizable or where but designed and the tea has to abandon the project.

Inverstors are dreaming to chase the new linkedin, the new amazon or any other the new somethign that will make them rich. But the reality is that most of the projects will fail it’s roadmap or will just pivot to another business model more profitable.

One project that I remember as a rug pull was an nft game called crypto mines. The team was good the game got a lot of tractions since it was rewarding it’s users were rewarded a lot and it was even looking that they found a good tokenomics. But the problem was they never implemented the tokenomics to avoid whales. Those whales helped a lot to pump the price but when they sold the price went down 50 % in a matter of hours and then the community started to panic and complain about the scam to the team. The team was not able to handle the situation and after one retry to fix the problem they abandoned the project and the price went to 0.

The price crashed after the rug pull

The last message on it’s telegram group

the website is still alive but the game is not working anymore. They have a legacy site as well

So a rug pull sometimes is not really the end and just a pause, it’s quite common also common that rug pullers come back, some of them with the promise of not failing this time and some others because they always were anonymous and they are really good to convince the community that they will create the new big thing.

The worst rug pulls are the ones that are just landing pages, and this can affect the people that buy the token in the presale or the token in a dex and the smart contract has a function to avoid getting the liquidity back. This token rarely gets listed in a big exchange and the people that bought the token in the presale will never get their money back.

The crypto community has very short memory and like to invest in the off chance that they will get a 1000x profit.

Another thing worth to mention is than in general play 2 earn was a total unsustainable disaster and the concept mostly disappeared.

How to avoid this scam

You need to do your own research DYOR, coingecko, coinmarketcap can help on this and you can combine this with some rug pull tools made to detect rug pulls like to name just one https://de.fi/scanner specially for pre sales you need to check carefully what are you buying. Or you can check if the smart contracts in case of evm ‘s blockchain if they have been audited by third parties like https://www.certik.com/. In any case there is no guarantee that you will not get scammed but you can reduce the risk of getting scammed.

Thanks mate for reading!

And I think this post is getting too long so I will stop here, I hope you find this post useful and you can avoid some scams in the future. If you have any question or you want to share your experience with scams in the crypto world let me know in the comments.

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