Crypto scams are increasingly prevalent as the surge in DeFi and NFT projects increases. From Discord server bots to imitation NFT projects on OpenSea, new ways of stealing cryptocurrencies through deceit continue to crop up. Most in the space are familiar with a typical rug pull scenario in which many invest in a new blockchain project, only for the project to later disappear and the owner to make off with all the investors’ funds. Others may have fallen victim to “pump and dump” schemes, in which wealthy holders of vast amounts of a cryptocurrency (a.k.a. “whales”) have been known to buy mountains of it cheap to drive up the price and increase its scarcity (thus creating FOMO), only then to sell it immediately, sending the price crashing down and then pocketing the profits. Here are a few ways you can protect yourself from scams. Watch Out For Community-Owned, Renounced Projects One way to avoid suffering the classic rug pull scenario is for the contract owners to renounce their ownership over to the community. Although this prevents a single entity from making an exit with all of a project’s capital, renounced projects can also come with a catch. If there is an issue with the contract after launch, they will not be able to fix the issues and will have to re-initiate the project entirely. Take Advantage of New Security Tools Tech companies in the blockchain space have begun remedying some of these security issues. EverRise’s...
