4 Signs You Might Be Dealing With NFT or Crypto Rug Pulls
When exploring cryptocurrencies or NFTs for the first time, it is always best to take the necessary precautions. Investing blindly in this space will end up with you losing money. Following a few simple tips can avoid a lot of unnecessary issues and headaches and steer you clear of potential rug pulls.
No Doxxing Or Transparency, No Party
Although the concept of doxxing has some negative connotations in a world where pseudonymity is expected, it is also a crucial step in avoiding rug pulls. If a crypto/NFT creator/team refuses to share their identity and can’t be doxxed, it is traditionally better to leave the project alone. It is tricky bgt5fv4ro build trust with someone who refuses to be transparent, although it is understandable why most people might not want internet strangers to figure out their identity.
Even so, when building a business venture – a new crypto or NFT project is a business, no matter how one spins it – doxxing is to be expected. However, a successful doxxing effort can still lead to fake social media profiles and information. So carefully review the information and when the accounts were created to ensure you are dealing with a genuine person.
Rug Pulls Rely Too Much On Copy-Pasta
It is relatively common for NFT and altcoin projects to borrow elements from previously successful projects. That is evident when looking at the hundreds of meme coins and dozens of ape-inspired non-fungible token collections. However, when there is too much copy-and-paste involvement, it is likely one of the many rug pulls in this industry. In addition, the open-source nature of project code makes it easy for nefarious developers to spin up a new project and try to take people’s money.
Rest assured, there are plenty of legitimate and long-term projects borrowing elements from other developers and artists. However, those are often framed differently or add some degree of utility that one wouldn’t find in most “clones”. Always conduct thorough research before throwing money at a hyped-up NFT project or altcoin, as they can quickly disappear.
Is There A Distinct Roadmap?
Creating the code for an NFT or altcoin project represents a small amount of effort needed to build a sustainable ecosystem. Putting together a long-term roadmap and sticking to those goals is of the utmost importance. Most rug pulls will copy the roadmap from a different project, change a few words, but offer no specific utility. That is especially obvious in the NFT space lately, where all projects appear to “support charity and launch merch” but do little else.
Moreover, one must question the viability of the roadmap and its milestones. Some ideas may sound great on paper but are unfeasible in reality. Sadly, most developers and teams try to add crazy ideas as a marketing stunt rather than achievable goals. Do not fall for such cheap tactics, as everything that sounds too good to be true often is.
Marketing Trumps Everything Else
It is normal for a project to gain traction and grow the community through marketing efforts. That often includes banner advertising, press releases, and submitting sponsored articles. In addition, most altcoins and NFT collections will partner with influencers to build short-term momentum.
Unfortunately, none of those efforts will guarantee long-term sustainability, as that requires a different approach. When an altcoin or NFT project focuses mainly on marketing rather than utility or quality, you might be dealing with one of the many rug pulls.
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