I just saw some of you asking what scam is and how to recognize it, so I want to share a bit of my experience in this crypto market.

Simply put, what is a scam? It is fraudulent activity; bad actors create fake cryptocurrency projects to steal your assets. They are called scammers, and if caught, they will face penalties. Nowadays, with the development of the internet, scam methods are becoming more sophisticated, complex, and can scale across many countries with millions of victims.

So, what does it mean to be scammed? It means you fall into the trap set by fraudsters. Some people don’t realize they’ve been deceived, while others know it’s a scam but continue to invest for profit, hoping to earn big returns. I find this quite dangerous because when the model collapses, everyone will lose everything.

There are several common types of scams you need to know. The first type is Scam ICO — scammers create a new cryptocurrency project, promote it, hire KOLs to advertise and attract attention. Then they issue tokens via an ICO to raise funds, and once they have enough money, they abandon the project and disappear with the funds. Signs include the project lacking clear solutions, anonymous development team, a basic website and whitepaper, and an unclear roadmap.

The second type is liquidity withdrawal, which often happens on DEXs. These projects initially build very professionally, then issue tokens and list them on Uniswap, PancakeSwap, or similar exchanges. Be cautious of low liquidity, easy liquidity withdrawal, and promises of excessively high APY returns.

There’s another scam type — locking buy/sell functions or hacking the project to dump large amounts of coins into the market.

I want to emphasize that avoiding scams is very important. Before investing, you must thoroughly research the project — what is its solution, does it really need blockchain, how is the community, what is the tokenomics. Nowadays, there are many tools to help check projects. You should also examine the smart contract to see if holders and founders show any suspicious signs. When connecting your wallet to a website, make sure it’s reputable and secure, then revoke permissions afterward to prevent misuse.

What is a scam — it’s the biggest risk when participating in crypto, but if you’re careful and do thorough research, you can completely avoid it. Wishing you safe and successful investments!