Common DeFi Scams
Decentralized Finance (DeFi) has gained immense popularity, but it has also become a hotbed for various scams. Here are some of the most common scams to be aware of:
- Rug Pulls: Developers create a seemingly legitimate project, attract investors, and then withdraw all funds, leaving investors with worthless tokens.
- Phishing Attacks: Scammers impersonate official platforms or wallets to steal private keys and access users' cryptocurrency holdings.
- Yield Farming Scams: Fraudulent projects promise unrealistic returns on investments, only to disappear once users deposit their funds.
- Fake Tokens: Scammers create counterfeit tokens that mimic real projects, tricking users into investing in non-existent assets.
- ICO Scams: Initial Coin Offerings (ICOs) without transparency or proper documentation can lead to significant losses for investors.
To protect yourself, always conduct thorough research, verify project legitimacy, and never invest more than you can afford to lose.