Memcoins continue to gain popularity, which attracts many scammers. They create the appearance of promising projects in order to lure money from gullible investors. Even experienced traders lose money by falling for their tricks.
We tell you how to recognize fraudulent projects so as not to fall for the tricks of scammers and ultimately find a real treasure in the memcoin market.
How scammers work
Fraudsters artificially increase project activity by pumping up trading volumes and creating fake data about investors. This creates the illusion of a “hot” token that you want to buy.
Here’s what you should pay attention to:
- The main goal of scammers is to create artificial hype around the token. They attract as many investors as possible, then take the invested funds and disappear.
- Fraudsters use bots and shady services to make the token appear legitimate. You may see high volumes, but in reality this is just an imitation of activity.
- If you see identical transactions or no price movement on high volume, this is a red flag. A stable price against a background of high volume is an indicator of manipulation.
Protection against fraud in the memcoin market
1. Liquidity monitoring
A rapid loss of liquidity is a sign of impending fraud. If developers suddenly withdraw funds or liquidity pools are sharply reduced, this is a clear signal of an impending “exit.”
Track how funds move in the project and monitor changes in liquidity. Pay attention to unnatural price movements – real markets cannot be static with high trading volume.
2. Wallet analysis
Centralized distribution of tokens is another sign of fraud. If a few wallets control the majority of the tokens, you are likely being manipulated.
3. Beware of new listings
If a new token instantly gets to the top of Dexscreener without prior information about the project, this is a signal of a possible scam. Such tokens appear quickly and disappear just as quickly, leaving investors with empty wallets.
Don’t trust a new token unless there is verified information about its goals, developers, and team.
4. Checking community activity
Check the X- and Telegram accounts of the project. Real active users often ask questions and discuss the project. Fraudsters fill groups with bots that spam you with common phrases.
Evaluate the quality of discussions, pay attention to the variety of questions and messages in chats. If everything looks artificial, leave.
5. Don’t trust superficial metrics.
The number of holders and trading volume are easy to fake. Don’t limit your analysis to this. Check the project code, the development team and their transparency.
Don’t invest in projects that seem hastily put together or are suspiciously opaque. Carefully analyze all information before making a decision.
Conclusion
Fraudsters know how to exploit the hype around memcoins. To protect your funds, you need to be careful and use careful analysis. Don’t fall for the artificial hype, check liquidity, analyze the movement of funds and carefully evaluate the activity of the community.
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Source: Cryptocurrency
I am an experienced journalist and writer with a career in the news industry. My focus is on covering Top News stories for World Stock Market, where I provide comprehensive analysis and commentary on markets around the world. I have expertise in writing both long-form articles and shorter pieces that deliver timely, relevant updates to readers.
