Why one must be careful of so called influencers when new DeFi tokens are promoted and launched.
How it normally works,
A project team would reach out to influencers before the launch and they will come to an agreement
The influencers then shills the coin to their audiences and build up hype and FOMO.
For this the project teams pay influencers in the upcoming token.
This means the influencers get early access and in most cases receive quite a large pool of tokens as soon as it hits the market.
Obviously the more they hype up the token and the more people they get onboard, the more money they would make.
That’s exactly why many of the DeFi token prices spike up right after the launch and then 'die' off.
Influencers’s audiences basically acts as their exit liquidity.
In may cases influencers’s motives are not to educate and help (as they claim) but rather to use and abuse their audience's trust.
