There are several clear signs that investors can watch out for to protect themselves from rug pulls such as the liquidity not being locked and no external audit having been conducted.
The following are six signs users should watch out for to protect their assets from crypto rug pulls.
Unknown or anonymous developers
Investors should consider the credibility of the people behind new crypto projects. Are the developers and promoters known in the crypto community? What is their track record? If the development team has been doxxed but isn’t well known, do they still appear legitimate and able to deliver on their promises?
Investors should be skeptical of new and easily faked social media accounts and profiles. The quality of the project’s white paper, website, and other media should offer clues about the project’s overall legitimacy.
Anonymous project developers could be a red flag. While it’s true that the world’s original and largest cryptocurrency was developed by Satoshi Nakamoto, who remains anonymous to this day, times are changing.
No liquidity locked
One of the easiest ways to distinguish a scam coin from a legitimate cryptocurrency is to check if the currency is liquidity locked. With no liquidity lock on the token supply in place, nothing stops the project creators from running off with the entirety of the liquidity.
Liquidity is secured through time-locked smart contracts, ideally lasting three to five years from…
