What are carpetbaggers with digital currencies, especially memes? How to avoid carpetbaggers with coins?
How to avoid being scammed
The term “rug pull” is a notorious scam in the cryptocurrency world, where developers create a token, promote it, and then withdraw all funds, leaving investors with a worthless asset. This article educates readers on how to recognize and avoid such scams.
Understanding carpetbaggers:
Creation and Advertising: Scammers release new code, often aggressively promoting it online; Large social media following, influencers endorsing the code, and a very poor or no website.
Initial Investment: They may invest their own money to create a false sense of security and legitimacy. They may even have a token economy and a roadmap.
Price Manipulation: Through marketing and initial limited offering, the price is artificially inflated. You have the opportunity to invest in the presale, and also through any decentralized exchange where they aggregate liquidity. Withdrawal: Once enough investment is available, scammers will withdraw it all, causing the price to plummet.
Red flags:
Anonymous teams: Be wary of projects whose members’ identities are unknown.
No unusual tokens or no tokens at all: Look for large chunks of tokens held by some wallets.
Lack of auditing: Smart contracts for legitimate projects are often not audited.
Hype: Be wary if the project relies too much on marketing rather than substance, as this is key.
Promise of quick profits: Promised high returns in a short time are a classic sign of a scam.
Do research:
Community feedback: Find real discussions and feedback from the community.
History: Investigate past projects and the team’s reputation.
Smart contract audit: Check if the contract has been audited by a reputable company.
