How to tell if a DeFi project is going to rug
I’m probably the last person you want to be taking any cryptocurrency advice from. In the last year or so I’ve been brought back to zero a number of times from several rugs. I went deep on Kore, CP3R, all the Keep3r clones, Soda, Yoda Finance, DopeSwap, Antiseal, Puff Core just to name a few.
If you were to ask me why I keep getting back on the horse, the truth is I actually don’t know. I think maybe I just believe in the underdog too much. I thrive on supporting low market cap projects when I believe they have true potential.
I’ve been rugged so many times though that I thought I might put together a few tips to be aware of to hopefully avoid being rugged yourself. Through my losses you might be able to gain something. So here’s some things worth looking out for before you invest your hard earned cash.
Three things you MUST look out for before investing in any DeFi project
1. Does the project have any use cases?
If the project does nothing, solves no real world problems and is more of a novelty than anything else, avoid it like the plague… I got in on a few of these just for fun in the hopes of maybe seeing some of them go to the moon. None of them ever do. If you don’t mind losing money, that’s fine. If not, keep looking elsewhere.
2. Does the team behind the project ever reveal their actual identity?
Not all anonymous teams rug, but all teams that have rugged have been anonymous. If you’re looking for an added layer of trust, verify the team is real. And this doesn’t just mean they have a picture. Look them up on LinkedIn. Google them. Find out what each team members background is and see if you think they’re worthy of your investment.
3. The internet is not always forever
Just be aware that websites, telegram chats, medium blogs and social media profiles can disappear at a moments notice. Just because a project has a digital presence does not mean anything.
Final thoughts
If you’re like me and don’t mind risking a rug because you’d rather support a relatively unknown project. I say go for it. Remember, at one point in time, Bitcoin’s market cap was under $1m.
As always, stay safe out there homies.
If you found this article helpful in anyway, or you just feel sorry for my deep rug burn, feel free to tip me some Ethereum — 0x36eBbc8ac514cd8D2061632B89f2e445A3F55F08
