7/6/2023 0 Comments Token snifferThis article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). You need to do your due diligence religiously or not invest at all. The same is true with haphazard background checks. For instance, if you are able to verify that the team wallets are locked, but fail to identify that more than half of the token supply is in the hands of an unlocked external wallet, they can still rug you. Moreover, these measures aren’t as effective in isolation. As the technology evolves, there will always be surprises, with hackers uncovering newer and more sophisticated ways to steal crypto funds. Now that we have shed light on the steps needed to avoid falling prey to crypto scams, it is important to note these don't totally guarantee the safety of your funds. To be safe, avoid projects that use this approach. While it has some advantages, too many malicious developers have used it as an avenue for rugging. For all you know, an audit report might reveal the con artist’s planned exit route if you look closely.Ī stealth mint is when an NFT project flies under the radar until the mint is launched, which makes it so much easier to create FOMO in a short period. Some projects just indicate that they’ve been audited, which can delude investors. An unaudited smart contract could hide bugs that allow the founders, or someone else, to steal user funds through a backdoor.įurthermore, investors should check the audit report themselves. Other projects may deviously postpone the auditing process, but put it somewhere in the roadmap to give investors unwarranted confidence. Unaudited ProjectsĪ genuine crypto project must have its smart contracts audited by an independent security firm, preferably before they list their token or allow investors to gain exposure. Your common sense will come in handy in determining ROI figures that are unsustainable. Scam DeFi projects more often than not claim to offer high rewards, ranging from 500% to 5,000% APY, since they need high liquidity to run their operation. If something is too good to be true, chances are it is.
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