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Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

blog.chainalysis.com

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Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#231

Post by vmception »

erichocean wrote: post #220
vmception wrote: post #176

Earlier quoted context omitted.

It moves the needle. the predictable alternative is that I get into an argument about liquidity with someone that doesn't know this market. the predictable thing is to pull up an article from 5 years ago about the thinness of the crypto market, because google tells you what you want to see. the predictable thing is to not know about large OTC trades done specifically to show the depth of the market, or not know about…

If you're kicking ass at crypto, why TF are you commenting on HN? Something doesn't add up.

How are these related or conflicting things, in your own words?

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#232

Post by ForHackernews »

chrisco255 wrote: post #227

DeFi market cap one year ago was probably less than $7B. Now it's over $100B. That is value that has been created. Crypto is a worldwide, 24/7, permissionless market. It's likened to the wild west. There have been numerous rug pulls, but if you focused all your energy on snake oil salesmen and gangsters in the West, you'd miss the fact that there was real, sustainable value there. A lot of people left Bitcoin after t…

> That is value that has been created.

I have 1000 toenail clippings I've carefully collected over the last few years. Each is unique and carries a genetic signature that is very difficult to replicate. My toenails don't grow very quickly, so the supply is limited.

This morning, I sold one toenail clipping to my wife for $100,000.

My toenail shard pile now has a market cap of $100 million. That is value that has been created.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#233

Post by chefandy »

duplicited wrote: post #204

Crypto is ridden with rugpulls. It’s extremely hard to find a diamond in the rough and you’re going to lose money doing it. Look for projects that focus on building community rather than pumping and dumping. I’ve been dabbling in DogeBonk and it’s funny how other “bonk” coins keep getting rug pulled around it while DogeBonk keeps on going

Do you have an example of a particularly well-done rug pull that would help this layman understand the scam better?

I totally understand why folks fell for Bernie Madoff's scheme. He had a brick and mortar office, a stellar reputation, and a relatively well-known face. Revealing his scam destroyed his life and he couldn't have easily disappeared into thin air before facing consequences. His clients are no better off, but the consequences alone would keep the vast majority of investment managers from blatant cash grabs.

Conversely, the caveat emptor nature of cryptocurrency and the ubiquity of scammers would stop me investing a cent based solely on a website, PR, and/or social media buzz— none of which require anything beyond a small amount of initial capital. Do their techniques go beyond that? Were any anchored to well-known people or organizations?

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#234

Post by deafnun »

Honestly, it's up to the buyer to take the responsibility read through the contracts on these tokens, run them through tools like token sniffer, look at the holder distribution, see if contracts are renounced, see if there were air drops to pre-sales to friends and token creators, do their research and see how the community is interacting, and making sure that all the boxes tick before throwing their own hard earned money at it. If you lose, that's the risk you took for the gains you wanted. Sucks to suck, but you're responsible for homework that you do before buying into a token and you're responsible for the money that you win or lose.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#235

Post by dvt »

Animats wrote: post #195

Scams that will collapse in 2022: * Axie Infinity. That's a Ponzi in the collapse phase. Their Smooth Love Potion token is down 90% and in a screaming dive, and their Axie token is down 37% from peak. That one is going to hurt a lot of poor people in the Philippines. Many quit their jobs to play Axie's play-to-earn game. All the money comes from later entrants, so it's a Ponzi by definition. * OpenSea. The NFT market…

> All the money comes from later entrants, so it's a Ponzi by definition.

Axie is not a Ponzi scheme, but is definitely a pyramid scheme (via their scholarships).

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#236

Post by dvt »

JohnJamesRambo wrote: post #201
Animats wrote: post #195

Scams that will collapse in 2022: * Axie Infinity. That's a Ponzi in the collapse phase. Their Smooth Love Potion token is down 90% and in a screaming dive, and their Axie token is down 37% from peak. That one is going to hurt a lot of poor people in the Philippines. Many quit their jobs to play Axie's play-to-earn game. All the money comes from later entrants, so it's a Ponzi by definition. * OpenSea. The NFT market…

How could Smooth Love Potion have failed us? Which brings up my other point, that people know the risks they are taking. Casinos are still legal. Someone that yolos their life savings into Smooth Love Potion was going to lose it some other way. If you don’t know your 100% apy isn’t sustainable in a DeFi ponzi, that’s on you.

> Casinos are still legal.

Casinos are not pyramid schemes, Axie is.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#237

Post by kristintynski »

realce wrote: post #217
darkwizard42 wrote: post #206

Earlier quoted context omitted.

Agreed on Axie. Disagree on NFT. NFT is art (VERY LOOSE COMPARISON). If you believe that then of course there is TONS of art that not only has zero bids but also never gets sold. I think NFTs are overhyped now but there is clearly a market for them. Speculating on them is similar to art collecting, all speculative. So I don’t see anything inherently wrong with it (something being puffed up isn’t illegal)

It's not "NFT" as a tech, it's the ability for the OpenSea ecosystem to maintain real value throughout time. That's very dubious, it's a house of cards balancing an elephant on top imho. Natural entropy and new novelty will erode the foundation of that specific ecosystem for something that provides a wider opportunity for more new users to create/retain value.

Memecoins can at least be tracked in value, the dynamics of these UGC meme driven communities, especially ones like doge, shiba uni, and now dogebonk, the exponential community growth effects are what matter most.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#238

Post by ineptech »

chrisweekly wrote: post #222
arcticbull wrote: post #207

Earlier quoted context omitted.

It’s easy not to have sympathy because these folks are the ones railing against the banks and the government and the establishment and police - confident they don’t need them because they’re all in on a system the vast majority doesn’t understand the first thing about. But they’ll demean and criticize anyone who suggests their magic free money machine might not be all it’s cracked up to be. They’ve been warned so man…

I like your take on it. But 7% inflation? Got a source you could cite?

The exact value of inflation this year is controversial and depends a lot on how you measure it, but you can replace it with 6 or 8 or whatever you think the correct value is without altering their point.

Re: Cryptocurrency scams cost owners $7.7B in 2021, driven by DeFi-based “rug pulls”

#240

Post by arcticfox »

Jerrrry wrote: post #154
javajosh wrote: post #142

Earlier quoted context omitted.

Nothing annoys me more than arrogant ignorance. It's like, pick one! You speak as if these are handled as federal matters, and they are not. Contract disputes are handed as local matters, usually in a local district court. Furthermore, when you talk about the court you're talking about a Judge. The Judge gets final say and they can take their sweet time, regard or disregard anything they want. In local matters, Judge…

> I can't stress enough the arbitrariness, and supreme, unaccountably, of a local judge's decisions. Exactly. Code-contract signers hate this, and go out of their way to avoid the possibility of this interference. Judges should tell crypto cases to get rightfully fucked. If I appear and sue a drug dealer for giving me fake 100's, I'd get laughed at. Considering crypto is just an massive abstraction layer to hide the…

> If I appear and sue a drug dealer for giving me fake 100's, I'd get laughed at.

Is that actually true? On the criminal side, I served on a grand jury, and a lot of the cases we saw were criminal-on-criminal crime. I guess the idea driving the crime was that criminals make easier targets as they're less likely to go to the police. But some did.

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