How does the system determine if a project is a scam or not? Even projects that have been audited and have a doxxed team can do scams, so far as I know there are some projects that only check smart contracts which can indicate a rug pul or not.
Rugpull is most likely to happen into those coins which had been not been locked and thats why you should really be keen on finding these various informations when you do tend to make investment.
Scams are everywhere and most of them cant really be noticed even how experienced or veteran you are yet everything could really be looks real yet scammers are getting smarter as we do go ahead.
As an investor then you should be wise and do your own research and wont really be tending out to make out careless decisions.
The purpose of this document is to make you understand the problem we are facing now with the growing popularity of the crypto markets. Cryptocurrencies and blockchain are a monstrosus topic and the applications of blockchain technologies came with a total lack of regulations in order to prevent illegal activities. Since the legal context is missing in Decentralized Finance built on top of blockchain technology, we are forced to be witnesses of DeFi rising scams.
DeFi rug pulls and exit scams formed 99% of all crypto frauds in 2020. DeFi-related hacks now make up more than 60% of the total hack and theft
volume in 2021, a large increase from only 25% in 2020.
Both exit scams and DeFi rug pulls are crypto frauds. Exit scams happen when cryptocurrency promoters disappear with investors' money during or after an initial coin offering (ICO). DeFi rug pulls are a new form of exit scam whereby crypto developers abandon a project and run away with investors' funds.
At the time of writing, between January-April 2021, DeFi scamsters raked in almost $83.4 million. Looking at the broader picture, almost 55% of all major cryptocurrency scams were DeFi hacks. That means out of a total theft amount of $432 million, $240 million can solely be attributed to DeFi. Even sophisticated investors, with a keen eye and understanding of financial details, can fall prey to such scams.
We built a platform for the decentralized finance industry to STOP the explosion of DeFi fraudulent projects that has left many individual investors burned. In the current DeFi marketplace, though, managing your portfolio still requires daily diligence, and that can take up a lot of time. This raises the question: Is there a way to benefit from DeFi without giving away all your time, and potentially all your money, too?