In our latest in-depth video, Cointelegraph shares six key tips on how to increase your safety when investing in DeFi by identifying carpet pulls - one of the most widespread types of crypto scams.
Booming growth coupled with a lack of oversight by traditional authorities has drawn an influx of scammers into the DeFi ecosystem. According to a recent report By Ciphertrace, while overall fraudulent activity in crypto is on the decline, carpet mining scams on DeFi have risen in 2021.
In typical carpet tugging, bad actors create a worthless token and list it on a decentralized exchange, where it begins trading in a pool of liquidity. The scammer convinces investors to provide liquidity by staking a valuable token, such as Eth, which raises the price of the new token. At a certain point, scammers "pull the rug": they take all of the pool's Ethereum and leave investors with the worthless token.
With the help of two DeFi experts, we've outlined 6 practical tips for spotting a carpet pull and minimizing the risk of being scammed when investing in DeFi.
Check out the six tips in our video and don't forget to subscribe to our Youtube Channel!
