Ellen Britt for CNT #NFT
When someone says “rug pull” in the NFT world, they are referring to when a project developer cheats everyone by absconding with the money from their NFT sales and does not continue the project. Yikes!
In many cases, these scammers will drum up a lot of false hype and talk on social media channels such as Telegram and Twitter, and may further lure investors into a false sense of security by putting a sizable amount of money into the liquidity pool.
Four Ways To Protect Yourself From A Rug Pull
So how can you protect yourself from having a rug pull done on you when it comes to an NFT project?
One – Social media presence and engagement – Reputable projects will likely have a fairly sizable Twitter following as well as members of their Discord group. This metric is not always failsafe, however, as followers and members can be bought. What is more difficult to fake is engagement. Monitor the conversations, ask questions, try to interact with the developers, particularly about the technical aspects of the project.
Two – The Team – make certain the team is not simply just one individual. Are the owner’s past projects listed as well as background information about the person and team?
Three – The Roadmap – reputable projects have a well-laid-out roadmap with goals and milestones. Are the goals realistic in terms of who they have on their team and their timeline?
Four – Purchase Maximums – If you are new to the NFT space, you should also avoid any projects that have a high purchase maximum. In addition, the maximum number of NFTs available for purchase at once should be capped at five.
Don’t let getting caught up in the excitement of a new NFT launch leave you vulnerable to being rugged. Stay smart and if anything about the project seems off, even a little bit, it’s best to bow out.