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Author: Admin | 2025-04-27
DeFi scams represent malicious intent to take possession of someone else’s digital assets. They come in all shapes and sizes and can be as simple as a social media scam or as complex as rug pulls. DeFi scams can be broadly divided into two main categories:Elaborate schemes like impersonation or other fraudulent activity, tricking the user into single-handedly transferring assets to the scammers' crypto wallet.Malicious actors exploiting protocol loopholes or performing intentional attacks on users’ wallets, breaching their security.The Most Common DeFi Scams and How to Spot ThemThe number of DeFi scams is rising exponentially on a year-over-year basis, according to Crystal Blockchain’s analysis. While there are various types of DeFi scams, the most common and widely used include the following:Rug PullsA rug pull is a type of exit DeFi scam in which project developers work to attract as many users as possible just to vanish with their assets at some point. Such malicious practices never intend to bring a product or a service to the market. Their sole goal is to generate hype, attract investors, and cash out.According to Chainanalysis, rug pulls have pushed 2021 crypto scams to an all-time high. A rug pull is often used interchangeably with the term “pump-and-dump.” The similarity is that both scam tactics intend to generate hype, inflate the price of a worthless token and steal investors’ funds. However, the difference is that the former relies on technical backdoors, while the latter is focused mostly on aggressive marketing.Rug pull scammers often intentionally program loopholes into projects’ smart contracts that allow them to exit easily while making it impossible for investors to sell (also known as “Honey Pot”). As a result, the latter are left with worthless tokens. Elliptic's “NFT Report 2022” finds that, by identifying loopholes in DeFi protocols, hackers managed to steal $12 billion in crypto assets in 2021. According to studies, a scam based on smart contracts (e.g., a token pre-programmed to scam users) is created every 4 minutes on average.Scammers also carry out rug pull schemes by creating liquidity pools where they pair their tokens with a leading cryptocurrency. Developers require investors to deposit BTC, ETH, or another asset and swap it for their token. Once they do, the scammers drain the liquidity.PhishingDeFi phishing is a scam where malicious actors deceive users into sending them money or granting access to sensitive data (e.g., private keys, seed phrases, wallet login details).It is usually carried out via email or other forms of digital communication where the user is urged to respond manually or click a link. Doing so risks losing the user’s cryptocurrencies or compromising their device’s security.Phishing scams are usually easily recognizable by individuals with moderate digital literacy, which is why
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