CRYPTOCURRENCY TO INVEST: HOW TO AVOID RUG PULL

CRYPTOCURRENCY TO INVEST: HOW TO AVOID RUG PULL

cryptocurrency-to-invest-how-to-avoid-rug-pull
cryptocurrency to invest


Investing is one way out of a financial mess. Everyone knows this, but the problem is usually knowing the right asset to put your money into. We are going to discuss cryptocurrency to invest and how to avoid rug pull

Some people prefer investing in stocks while others venture into Cryptos. 

Before we outline some possible crypto projects to invest in, it is worth pointing out that there are no sure ways to making that life changing income. You might think that the crypto space is one area that can turn you into an overnight millionaire, or at the least, make you thousands of dollars in the shortest possible time.

This is exactly the reason many investors have started considering cryptocurrency investing, right?

If you are considering dabbling into making money from cryptos; altcoins, meme coins, coins, NFT's, etc, it important that you know before setting out that these digital assets are highly volatile, this means that you could lose all your money before you wake up from sleep the next day, and you could also make a lot of money.

You probably might have heard about the meme coin, Shiba Inu Coin that has made a lot of over night millionaires in less than a couple of years, the coin started as a joke with an incredibly low price per coin that if you had invested $1000 dollars a year ago, you would have millions of dollars in your account now.

 It is still possible to invest in shiba inu coin now and make profits in future as price projections for the coin by experts  is still higher than what it is trading at now.

This sounds juicy and as easy as just picking a crypto project and just throwing your money into it right?, well the problem here, is that it is not as easy as it sounds. There are a lot of crypto projects. Infact, there are thousands of them, and new ones are emerging by the minutes. So, choosing the right asset is really a big deal.

Also, when Shiba Inu Coin started about a year ago, you probably would not have taken the risk of investing in it even if someone had advised, because it was a small project that looked very dicey.

It is worth noting that there are a lot of influencers and celebrities that are paid to promote these projects on their platforms by their developers with an underlying mischievous rug pull intent. Many unsuspecting victims would fall prey to these scams and cry to the bank instead of smiling to their banks.

Rug pull is common in the crypto space. Many famous people would promote these scammy projects while raking in thousands of dollars for doing so. A recent example is the squid game token.

 Infact, if you have a following of about 100,000 followers on Youtube for instance, you could be promised as much $30, 000 just to make a video about a crypto project. 

According to an article on cnb.com earlier this year, the U.K.'s  Financial Conduct Authority warned crypro investors of the risk of losing all their money. This warning stems from the rising level of scams and we should be well informed to avoid falling prey.

You might be wandering what we are really aiming at in this article?, the answer is simple. There are many projects right now that can replicate the success of dogecoin and Shiba Inu coin and you do not have to shy away from investing in cryptos because your financial status could change for the better in a twinkle of an eye,but only invest the amount of money you can only afford to lose. If you put in all your money or life savings, then you are preparing for a pity party.

That said, the need for proper research can not be neglected. This makes your investment a calculated risk. Every business has a level of risk involved, but your level of risk management in investing hindges on the quality of your research. The more thorough your research is, the higher your chances of success.

Before we dive into naming a few cryptos we believe could make new millionaires in future, let's discuss how to properly research a project to avoid rug pulls

HOW TO RESEARCH A CRYPTO PROJECT PROPERLY

cryptocurrency-to-invest-how-to-avoid-rug-pull
cryptocurrency to invest


To avoid risky and careless crypto investment, you should consider the following in your research:

THE WHITE PAPER:

Most reliable crypto projects have a detailed and convincing white paper at their initial coin offering or ICO. The reason for this is to attract investors. The white paper usually unveils the mission of the project and how they plan to achieve it. Detailed information such as;

  • The selling point compared to other competing projects
  • The vision of the developers for the project and how they plan to achieve it.
  • The use cases of the projects
  • Details about the circulating supply
  • Mechanisms for burning the crypto 
  • Mining mechanisms
  • Financial models
  • Legal concerns
  • Road map for implementation.
These and many more are necessary to understand before investing. For example, the developers of the Shiba Inu Coin in their white paper clearly stated their vision of  outpacing the dogecoin without reaching the one cent benchmark. They were out to be the Dogecoin Coin killer and they stated their methodology.

That vision became real a few weeks back when they ranked above the dogecoin in terms of market capitalization.

Furthermore, a convincing white paper is not the only thing to consider as many scammers appear genuine on their white paper only for a rug pull to follow after investors might have locked in funds. There is need to consider other important factors.

RESEARCH THE DEVELOPERS AND LEADERS

This is a very important aspect of your research that you must pay attention to. Find out who the developers are, their qualifications, projects that they have worked on before, their relevance in the blockchain industry.

A project with unknown leaders and developers is a red flag. Sometimes, some developers use pseudonyms not because of a mischievous intension, but for some personal reasons. In such a situation, watch their affiliations. A good example of this is the developers of the Shiba Inu Coin who are disguised under the pseudonyms; Ryoshi Kusama and Shytoshi. This is enough red flag and probably one reason some investors are skeptical, but their affiliations with Vitalik Buterin- a co founder of ethereum brings back a level of confidence.

It is also important to note that the fact that a project has known faces and popular names on their project does not make it scam free and the holy grail for trust.

Some scammers have adopted a new strategy of using the profile of public figures on their projects without the approval of the persons involved or at the least, at a fee for their scam to be executed.

               CERTIK AUDIT

Certik is a blockchain security firm that is championing the use sophisticated formal verification technology on smart contracts and blockchain networks.

Investors usually await the results of certik audit before making some significant investment in a project. If necessary, studying certik audit where necessary helps with further information regarding certain security issues.

The picture below shows the certik score for shibaswap, which is very high for a meme coin.

cryptocurrency-to-invest-how-to-avoid-rug-pull
cryptocurrency to invest

If there are security issues, the audit will make recommendations for the developers to make improvement. You should study these recommendations and how well improvements have been made. A further example with the Shiba Inu Coin shows that the developers have resolved the minor issues up to 98% as shown below.

cryptocurrency-to-invest-how-to-avoid-rug-pull
cryptocurrency to invest

This approach will reduce the risk of a rug pull 

WHAT IS THE USE CASE OF THE PROJECT

This is another very important point that needs careful consideration. A project that solves no real life problems might not attract serious investors. Though, this is usually not the case as some crypto projects have graced the corridors of fame without having a single use case.

Also,developers of projects nowadays are exploring the metaverse as a way of making their projects useful. Such projects could have future potential as our world is now being gradually oriented to the metaverse world

USE ETHERSCAN AND BSCSCAN

cryptocurrency-to-invest-how-to-avoid-rug-pull
cryptocurrency to invest



Etherscan is a blockchain explorer that is built around ethereum to provide access to blockchain data, it allows users to search information regarding transactions and other details on the ethereum blockchain. You could use this tool to see any possible foul play from the developers of a project or any other individual if the project is a smart contract on the ethereum blockchain.

Likewise, all projects on the the Binance smart chain can be studied using Bscscan. Bscscan was built by the same team behind Etherscan for tracking transactions, verifying smart contracts, validating BSC

The proper use of these tools helps investors avoid rug pulls. You can look up how to use both on Google or watch some videos on Youtube.

WHAT PROJECTS ARE PROMISING?

We can use the above process and more to make sure a project is not fraudulent. Before we list projects we believe might be profitable in future, it is worth noting here that we are not giving any financial advice, hence we do not take responsibility for any losses incurred for any action taken upon this information and we are certainly not sponsored for this also.

Any of the following  might make millionaires in the nearest future: Shiba Inu token, Dogecoin, Solana, Cardano, Crypto.com coin, Terra,Polkadolt, Avalanche, XRP, Mana, Klay and of course the father of and mother of cryptocurrency; Bitcoin and Ethereum respectively.



Post a Comment

0 Comments