HOW TO RECOGNIZE SCAMS IN DEFI?PT 2

🥷 How to Recognize Scams in DeFi? Part 2
You are welcome to the part 2 of this post *How To Recognize Scam in Defi. You can read through the part 1 hereHow to recognize scam in Defi for better understanding.

In the first part, we discussed important aspects like project purpose, code quality, and smart contract auditing.

Now, let's look at additional factors that can help reduce risks when choosing DeFi projects.

💎 Tokenomics – the Key to Trust?

A project’s tokenomics is essential and can reveal a lot about its intentions. One common scam in DeFi involves artificially inflating a token’s price.

Developers often buy their token en masse, increasing demand and attracting attention, only to sell it suddenly, leaving investors with losses.

❗️Pay attention to how tokens are distributed. Watch for the following red flags:

High concentration of tokens among founders: If most of the coins are owned by the team, this may indicate a risk of future price manipulation.

Limited presales to a small group: If pre-sales are restricted to a select few, this may be questionable, as a large portion of tokens ends up in the hands of a small group.

Transparent ICOs (public sales) generally inspire more confidence.

Also, be cautious if a project is heavily distributing tokens through airdrops. This can lead to a price drop, as airdrop participants often sell coins as soon as they enter the market.

❓ Team: Anonymity vs. Openness

While anonymity is popular in crypto, it doesn’t foster trust in DeFi projects. If developers prefer to remain anonymous, they can easily disappear with investors' funds.

An open, reputable team is always a plus, as they are accountable to the community.

Conclusion: Stay vigilant, analyze the tokenomics, and consider the project team. These steps will help secure your funds and minimize risks.

🔥 CZ spoke at Binance Blockchain Week in Dubai.

The former CEO shared that he is now focused on education and investments in blockchain, AI, and life sciences. He left Binance under an agreement with the U.S. government.

There is no agreement preventing him from working indefinitely. However, he doesn’t plan to return to the CEO role, even if he is allowed to.

🔼His outlook for the crypto market's development in 2025 is optimistic.

Other statements:

📌 His experience in prison wasn’t the best (said humorously).

📌 He had time to reflect and missed human interaction.

📌 He was lucky to be jailed for only four months.

📌 Guards were asking him which coins were best to buy.

📌He doesn’t plan to lead any project but wants to support other leaders.

PS: You can read my other related crypto post below

1.top 20 promising cryptocurrency for q4 2024 according to grayscale

2.cftc exposes multi-million dollars crypto scam

3.87 application for registration of crypto firm were rejected