In our latest in-depth video, Cointelegraph gives six key tips on how to increase your security investing in DeFi by using the Carpet pulls, one of the most widespread types of fraud in the cryptocurrency space.
Booming growth coupled with a lack of oversight by traditional authorities has attracted an influx of scammers into the DeFi ecosystem. Overall, cryptocurrency fraudulent activity is on the decline, according to a recent report by Ciphertrace.Pulling the carpet“In DeFi they increased in 2021.
In the typical rug pull, malicious actors create a worthless token and list it on a decentralized exchange where it begins trading in a liquidity pool. The scammer convinces investors to bring in liquidity by betting on a valuable token like Eth, which drives up the price of the new token. At one point, scammers “pull the carpet” – they take all of the Ethereum out of the pool and leave the worthless token to investors.
With the help of two DeFi experts, we outline 6 practical tips to spot a carpet pull and minimize the risk of fraud when investing in DeFi.
Check out the six tips in our video and don’t forget to subscribe to our YouTube channel.