Avoid getting Scammed again with the best ways to Avoid NFT Rug Pulls

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1 year ago
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Over the past few months, NFT rug pulls have been a popular way of scamming people out of their money. Here are 7 ways to avoid rug pulls!

  1. Check the team

  • It’s crucial to examine links and determine the creators’ reliability

  • It’s a good indication when a token locks a significant quantity of liquidity for a considerable amount of time

  • In the event that the vast majority of liquidity is locked, developers won’t be able to rug pull

  • Low liquidity, such as the US $100,000 or less, can be easily manipulated and is a major warning sign because it implies that the project’s developers have limited money to invest

2. Whitepaper

  • Before investing, a token’s whitepaper describing the issues it seeks to address should be read

  • A big red flag is when a whitepaper is shorter than twenty pages and reads more like an advertisement

  • The whitepaper should describe the use cases for the currency and provide figures and charts

  • An unprofessional white paper is a major red flag

3. Blockchain explorers

  • Use blockchain explorers (like etherscan.io) to look up the ownership proportion of a particular project

  • By finding the tokens’ contract address and plugging it into a blockchain explorer, you will be able to see information like top holders by percent, market cap, and circulating supply

4. APR

  • A project with a high APR (annual rate of interest paid on investment) may be a red flag

  • If the tokenomics appear to be too good to be true then it may actually be a scam

5. Research the community

  • Check if there are any famous personalities or a group of crypto enthusiasts

  • These individuals typically have more experience and are aware of what to watch out for, so they may have a better understanding of what is happening

  • Don’t be fooled by large numbers; instead, confirm that the interaction comes from true experts

6. Only mint on official websites

  • Any link provided by the creators should only be followed if it leads to a reliable website like OpenSea or Mintable

  • Even though there are other secure places to mint NFTs, always do your research before making a purchase

7. Look at the roadmap

  • Make sure the plan is practical

  • In order to energize the community, many rug pull schemes feature an exciting roadmap, but aside from the fact that they won’t truly materialize, they are frequently too challenging to carry out

REFERENCE:

  1. https://nftandgamefi.com/2022/03/24/rug-pull-nft-projects/

DISCLOSURE:

None of these articles constitutes financial advice. Articles are highly summarised to make it easy for the reader and save your time, so please DYOR further before putting your hard-earned money into any product mentioned.

Please note that the tech industry evolves rapidly and the info in this article is correct at the time of publishing. As Heraclitus said, “Change is the only constant,” so if anything sounds old or off, please holler on the socials or comment here so everyone stays peeled.

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