Is it Possible to Tell the Quality of a Shitcoin?

Is it Possible to Tell the Quality of a Shitcoin?

Exit fraudsters advertising their shitcoins have cost bitcoin investors about $100 million in the last year. After the 2020–21 bull run, institutional investors have entered the cryptocurrency market. The shitcoin drama continues.

Every bull run comes a shitcoin season with pump-and-dump scams, exit scams, rug pulls, and get-rich-quick schemes that fleece investors.

Some shitcoins have amazing short-term gains (such as these shitcoin in this review article of Coinwire). Dogecoin, a Tweet shitcoin which rose over 12,000% this year, is a renowned memecoin. This tutorial covers shitcoin history, identification, and investment value.

The Definition of Shitcoin

Though they start out as alternative currencies, shitcoins quickly lose value owing to underlying problems.

The coins are practically worthless and have no apparent function. They primarily use a system of social media “micro-influencers” to spread false information about their products and services.

Is it true that every shitcoin is terrible?

However, some have strong community support. Dogecoin, a Bitcoin parody, is useless. The 2020-21 bull run was powered by Twitter troops and Elon Musk.

Shitcoins are immoral. Since the 2017 ICO boom, the cryptocurrency environment has evolved. Shitcoin scams have also improved.Every shitcoin project presently falls into two categories:

Rug Pulls

Rug pulling occurs when a cryptocurrency team disappears after soliciting a large amount of funding from consumers, leaving them with useless tokens.

Hacks, or “rug pulls,” are common on decentralized exchanges (DEX), especially those associated with DeFi schemes.

Developers may create and advertise their tokens on a DEX without undergoing any kind of verification or auditing procedure. Bad coders may offer their tokens with ETH or another popular cryptocurrency on a DEX (such Uniswap or PancakeSwap). They secure a minimal sum of money and give liquidity, both of which are necessary to win over investors.

The time has arrived for a rug pull. When a sizable number of investors trade ETH for the offered token, the programmers drain the liquidity pool (by removing all the ETH), leaving the investors with worthless coins.

During this procedure, the mentioned tokens’ value may increase by as much as 50X or 100X in only a few hours.

The quick increase in price generates a FOMO effect, drawing in new investors who don’t want to lose out. When the price reaches a maximum, the team cashes out.

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