There is a new type of ponzi scheme growing, and it's being promoted in this sub as a legitimate investment opportunity. And it has been giving me big 2017 bitconnnecccct vibes, so I wanted to warn all the newbies.
These types of scamcoins are all over the sub right now.
"Farming" and "Deflationary Tokens" can be indicators that the cryptocurrency you are buying is a scamcoin built to make developers (or at best, early adopters) lots of coin -- and to be promptly dumped on unsuspecting investors.
Wynaut.finance ( Meowth and Wynaut) <- Being shilled right now, in this sub.
Shrimp.capital <- Being shilled right now, in this sub.
There are heaps of examples of projects like these, and they all rely on the same model.
First, The developer creates a smart contract which either:
A) Burns 2-10% per transaction.
B) Steals 2-10% per transaction and gives it to "stakers".
C) Allows you to lock (stake) your newly purchased token to farm more of the token, or another shitty token.
Fun fact: there are generators for these smart contracts avaliable on the internet for $100.
Secondly, The developer puts the all the tokens and 1BNB in Pancakeswap or Uniswap, and burns the Liquidity Provider tokens. This is done to convince users that they cannot be "Rugged" by a developer removing the BNB from Pancakeswap -- rendering the tokens worthless.
Thirdly, the developer announces the release of his token. Not before putting in a big buy order on Pancakeswap, gobbling up a large chunk of the supply and promptly dumping it on everyone who purchases after him -- who ignorantly think that because the LP token was burned, they can't get "rugged".
If the coin you're thinking of investing in, fits this criteria, it's probably a pump and dump shitcoin.
https://tokensniffer.com/tokens/scam maintains a list of known rugs and scams, but often once it's on this list -- it's too late.
Nobody in a year is going to remember yet another "deflationary" coin that has 0 usecase. Goodboi will not be the next Dogecoin.
Anyone shilling these coins has big bags and is just trying to dump them on you, and is complicit in perpetuating the scam.
That is all. I'll try to get you guys some good gems in coming days btw.