Allow me to explain: If an NFT project that is going to allow 7,777 NFT’s to be minted of an “oh-so-cute!” character and they allow you only 1–2 hours to review their smart contract prior to minting time— smells pretty sketch to me. I had the opportunity to mint a “decent” project that had potential to yield 6–8x profit in 1 day but happily declined for that reason. Why is it so secretive? Why is it such a hard question to answer anything about the contract? What company was used to audit the contract? Can you please provide a link to it being deployed on a testnet prior to launching on mainnet? Oh…you can’t do that? Oh right… because you’re scared someone will learn of your true intent that you try to mask behind unsuspecting people who aren’t well versed in reading Solidity smart contracts. Meanwhile, you shut down any attempts to obtain legitimate information because they “obviously just don’t believe in the project”. I’ve heard most of the lame excuses by now so it’s easier for me to move on down the road and not waste time with these types of people/projects.

The above is just 1 of the many things that tip you off to either a rug-pull, a Rugfest, New Rugcity, and Slow Rug…take it easy! For those who are not familiar with the term “rug” in this context, it is where the rug is pulled out from under you, typically due to an investment gone wrong. You’ve been swindled, hornswoggled, bamboozled, etc. I’ve compiled a detailed list that I am calling — The Anatomy of a Rug Pull.

1. The Hype exceeds any actual use case or minimum viable product

You will meet the hype boys/girls along this journey, undoubtedly. They are either the paid actors who sit at home and get paid to sit in Discords to prey on the emotions of people just being “onboarded” into the realm of NFT’s or they are trying to get whitelisted by the project moderators who are always tasked to watch people that “contribute to the community”. Some hype is required in this game, don’t get me wrong, it’s a brilliant use of marketing. Most sales come from an emotional impulse but, can we admit that if the hype exceeds the true use case of a project or any supposed MVP that will be delivered, it’s most likely the beginnings of a rug. The first tactic is always to hype up something when there is nothing under the project except a bunch of empty promises on the roadmap and no actual gameplan to implement any of them. The level of hype quickly escalates and, the closer to mint date, people start turning on each other quickly. The ones with a brain to see what is clearly happening by lack of transparency begin to say a few things to make everyone stop and think…but not the super hyped up people.

2. The people involved tell you what you want to hear vs having any real plan

It’s been my experience during an AMA (Ask me Anything) held by projects that are not well put together to immediately crowd source input versus establishing their own vision/direction for the project. If the founders, leaders, moderators and/or developers of a project start off this way, it immediately sends off red flags for me. It signals the seriousness, or lack thereof, of the governance team’s resolve to begin the project. Sure, having a plan or roadmap doesn’t mean they can actually deliver to those goals but, shouldn’t it be an expectation for the “founders” to have a foundation for which the community can build upon as time goes on? You need to challenge these unsteady grounds to expose the true intentions of the founders, devs and governance members. Make the leaders of the project explain to you their plan in explicit detail and gauge their true intentions for longevity of the project. How are they going to add value back into the community that will ultimately provide money into their pockets? These are questions you need to dive into if you’re planning to join projects for the long term and/or you hope to recover some profits for your initial investment.

3. Any plan that is available is a carbon copy of every other project in the same space, filled to the brim with buzz words

Everyone has a roadmap and you’ll see a common theme amongst them if you’ve been in this space long enough. Right now, you’ll see things like “Play-to-Earn” and “Metaverse”. They will instantly go into “Charity giveaways”, throwing community parties at live sites. How about buying digital land in the metaverse and hosting concerts or some gatherings? How about a Netflix special series or documentary?? Are you hyped up yet? Yeah, me neither…. Why? Because it’s the same thing on repeat and I’m too ADHD for the same thing over and over again. When I see this on project road maps that look virtually the same, I instantly focus on the feasibility to deliver and the time it will take them to deliver. I’ll dive into how long they own their domain name if they have a roadmap that will seemingly take them longer than a year to achieve. How long did they purchase the name? Oh…1 year? But their roadmap says they will be there for at least 2. The truth is it would have been cheaper for them to purchase the site for longer than a year initially. If they didn’t believe in their project long enough to invest the extra 10–30 bucks to spring for 3–5 years, what does that say about the nature of their intentions?

4. Smoke and mirrors are used to distract you from behind-the-scenes planning

There is always something going on in the busy community discussions. Discords with 150k+ people trying to win contests for whitelist spots. Voice channels filled with people discussing what’s going on with the project, often being either misinformed or mislead by community moderators or helpers. To be a moderator or helper is a tough spot. You’re probably promised whitelist or airdrops, etc and that can be a great opportunity for some quick cash on your part, should you choose to step into that role. But you will be the one sent out to distract the community from the lack of transparency that usually happens. If everything is quickly rushed to push you towards minting, you should beware. I will never mint anything before I have seen a verified contract, and for good reasons. I am a developer so I understand the things that can be placed into Smart Contracts that are malicious or at the least destructive to your wallet. I won’t go into those specifics here but will be sure to provide detail in a future article. Let’s just say there are functions that can be placed in a contract to allow the owner/creator to take everything out of your wallet. Don’t be caught off guard just because you might miss your chance to mint. There will be many other projects that are decent. Do not be drawn in by the FOMO. It may be the difference between you keeping your funds/NFT’s and you being very sad.

5. There is always a celebrity who’s endorsing the project that cannot be verified

There is always a celebrity or public figure that gets thrown around as of late. For sure they are taking notice to the cute little pictures on Twitter and Instagram, so they are bound to jump in on the fun. That being said, always verify authenticity of their involvement. Just because you saw a screen shot of a tweet or post doesn’t make it authentic. Trace the source of the involvement. Are there any other ways to tie the celebrity to the project other than your back-alley Discord chat where you saw their name pop in and out of chat channel? Anyone can change their name to anything they want on that app without having to validate, verify or authenticate true identity, so just be careful! If a team is quick to name drop celebrities, I always become skeptical and will prove it true or false.

6. An Ask-Me-Anything is scripted and any person who tries to ask legitimate questions to expose true intentions of the developers and/or all people involved in the launch are silenced

This is a huge red flag for me. I ask the tough questions…always. I don’t pull punches and therefor can seem direct, maybe even too direct at times. But it’s the secret to my ability to spot a rug. This is where you find out how genuine is the governance team. If they become defensive and start attacking you for asking hard questions, you should have concerns. “Obviously you don’t believe in the project”… well, you’re not wrong…that’s why I ask questions to see if it’s something I can get behind. If a project silences you for asking tough questions or all you hear is “rainbows and unicorns” with no potential downsides, you might try digging in a little further before getting too involved.

7. It’s all about community and charity — the creators are not out to make any money

No one is in the business of grossing 10–20 million dollars from NFT’s from initial sales without trying to make a profit. They worked hard for the project and deserve to be rewarded. Gathering up a crowd and marketing is hard work. Developing good art, programs, the contracts, etc is hard work and they should be compensated. So if a non-celebrity group of people are doing this “100%” for charity, I’m an instant skeptic. If they say they aren’t out to make money, they aren’t being entirely truthful and what else are they also hiding from you?

8. Nothing is ever clear from anyone who is representing the “dev” team and no one is actually “doxed”

I cannot stand this one… A supposed developer or team of developers who refuse to be on credits of a project with their actual name and/or face. They are just a PFP with a name like “Jakezilla” or something like that. Why is it that a reputable individual is afraid to produce any type of information about themselves? They say “I don’t want to be hacked” or “I don’t want people to threaten me or my family”. The only reason this would be a cause for concern is if they are performing potential illegal activities or nefarious acts that would warrant a threat, such as malicious activities in the Smart Contracts. If you cannot find the people who are asking the community to provide them with millions of dollars of liquidity, does that give you good vibes about the nature of their intentions? No, me neither.

Conclusion:

This is a dangerous space to be in for newcomers. The same tactics that were used on new Alt coins are happening within the NFT space. There are great projects that are out there, please don’t mistake my above cautions as a “Stay away from all NFTs!” warning. I’ve participated in great projects that are still going strong today. I’ve made money in this space like so many others. Arm yourself with the knowledge that most do not want to take the time to learn and you’ll be a strong pillar in any community you participate in. With vast knowledge of blockchain/crypto/NFT’s, my DM’s are always full. Projects are plentiful and there are people who would pay for professional guidance. Become a professional researcher in this space and one day you’ll be called a Subject Matter Expert in NFT’s, cryptocurrency or even Web3.

Tune in to my YouTube channel! Like and subscribe if you like the type of material I have provided in this article as there will be many more videos to come as I get started sharing my experiences, tools, and tips to navigate through this space!

— CryptoCrys

An experienced developer, technology enthusiast, and Web3 fanatic

When you change your perspective on the problem, like the proverbial bird, you find the problem begins to shrink as the flow of logic, reason and sound judgement override the fear of the unknown. The truth is, you’re a capable individual with unlimited information at your fingertips, so what’s stopping you from changing your perspective each time you encounter a new problem? The thought of “I can’t”, “that’s impossible”, “I don’t have time”. These are often responses that our standard human emotions have been programmed to throw up when we hear those words that tell us “You have to change/learn something”. Others may be dealing with an outside source telling them “You’re not smart enough for that”. I have some encouraging words that I applied to my life and it made an impact. I hope it also does the same thing for you.

The Challenge

Quit listening to ONLY the words of nay-sayers always telling you their “right” and only way of doing things, which worked for them years before. This is no dig to the trailblazers before, please I mean this in all due respect, their methods paved the way for improving upon yesterday. Times are different now and the world of data rapidly evolves as our understanding of how we can use data to our advantage also becomes more fine-tuned. Just because we’ve always done something a certain way doesn’t mean it’s the best way to do it going forward.

I hear something like these words pretty frequently, “This is the way we’ve always done it, who are you to change it?” I thought we were the music makers. I thought we were the dreamers of the dreams. When did the unquenchable thirst for knowledge and the unrelenting push to change the world become the lost appetite for innovation and creativity? Hopes and dreams die only when the ones with the visions and the dreams stop lifting their voice, stop making an effort and allow their idea/dream/hope to fade away. How many ideas have been overlooked because people closed their perspective off before giving it a second thought? How many dreams never even took flight because someone told them “That’s not possible.”? When you look around your immediate sphere of influence, do you see an overwhelming abundance of hope?

I know times are tough and you tell yourself on every project “I’m going to learn that new thing that everyone is always telling me about that saves me time, I just need to invest the time…” The truth is this: there will never be enough time unless you make it. You owe it to yourself! There will always be a client who is waiting on you to send them a report…. There will always be a deadline that requires your attention and…yes…it will always feel like everything is needed yesterday. That is an immutable constant that will never go away.

It’s like the word “No” — It’s a constant negative response that carries a meaning of “Do not pass go, do not collect 200 dollars” or something to that affect. You hear it when you are growing up and it doesn’t carry the same meaning. You hear it 100K times when you’re a toddler and the words do not resonate to your brain as a negative response. It’s like a child thinks it’s an acronym and stands for “Numerous Opportunities”! It’s their perspective on the meaning of the word. I’ve spent a lot of time recently reading child psychology books lately and it’s awesome how the mind of a child can solve some of the most complex problems. How you ask? They see things differently. They have a different lens.

You can have a different lens too by doing something like:

• Get a work buddy and partner up on similar projects for job shadowing to expand your breadth of knowledge
• Bounce ideas you’re working through and collaborate on improvements with those who are also working in the same area
• Use different tools/processes that force you to learn a different methodology/platform — Learn all you can! What you learn today will undoubtedly pay dividends tomorrow!

Above all — write the things down that come to your mind. They are precious and worth holding onto for the future. I leave you with this final statement. To change your perspective can take as little as minutes to ask the questions: What if my way of doing things is not the best way? Who knows…you could be the spark that becomes a bright light to illuminate the dark or uncharted path ahead. Why not you? Why not now?