BinaryX has rebranded to Four, uniting GameFi, IGOs, and MemeFi under one ecosystem. With BNX now FORM, Four continues to innovate in blockchain gaming."

Having launched in May 2021, BinaryX, which started out as a 

 (DeFi) platform, has continued to evolve and adapt to the rapidly changing blockchain landscape. However, in the spirit of adaptability and innovation, the platform switched to 

, focusing its attention on play-to-earn (P2E) games.

As a GameFi platform, BinaryX has also created an 

 (IGO) launchpad from which developers can launch GameFi projects.

Now, BinaryX has rebranded to Four in order to align with the mission of its 

 product, a launch platform for the meme coin ecosystem.

Let's learn more about BinaryX and the way it continues to shape the crypto market with innovative products and adaptable business models.

 hub for the development of GameFi projects, includes an IGO launchpad to facilitate developers in launching games. 

BinaryX began in 2021 as a decentralized derivative trading system that featured the use of 

. But in 2022, the BinaryX team gradually evolved its project into a GameFi platform in order to adapt to the increased demand for P2E games. Its aim is to make web3 games more accessible and approachable to the vast community of gamers.

BinaryX also developed an IGO launchpad to serve as a comprehensive hub for gaming developers to launch their GameFi projects, and for investors to receive early access to promising new play-to-earn games. Furthermore, the BinaryX team announced the incorporation of a 

 (DAO) into its GameFi ecosystem so that its community of token holders could participate in voting on governance matters.

In February 2025, BinaryX rebranded to Four in order to align with its latest product, Four.meme, which was launched in July 2024. Following the rebrand, its native token, BNX, would now become FORM to reflect the project's commitment to innovation and adaptability.

As one of the top web3 platforms on BNB Chain, BinaryX has continued to innovate and experiment with different business models to adapt to the blockchain landscape's fast-paced nature. To this end, BinaryX has the following diverse products under its wing.

BinaryX launched its Initial Game Offering (IGO) launchpad in May 2022 as a dedicated platform to support blockchain gaming projects. The launchpad helps game developers secure funding for decentralized video games. They also get a platform on which to build communities and accelerate their web3 game development.

By leveraging BinaryX’s expertise in GameFi and its existing user base, projects gain exposure to a vast community of crypto gamers. The platform offers early access to promising blockchain games, allowing investors to participate in token sales and 

 presales. BNX holders can use their tokens to vote for games' listings on the BinaryX platform, and they also receive rewards, such as game tokens and NFT 

Some notable games launched on the BinaryX IGO launchpad include 

. These games showcase BinaryX’s commitment to innovation in GameFi, integrating play-to-earn mechanics, NFTs and decentralized governance to help create immersive gaming ecosystems.

BinaryX's GameFi trading platform is a marketplace designed for seamlessly trading blockchain gaming assets, including NFTs, in-game tokens and virtual items. Launched to support the growing GameFi ecosystem, the platform enables gamers and investors to buy, sell, trade and auction assets from BinaryX-powered games in a secure and efficient manner.

 and DeFi principles, BinaryX ensures transparent transactions with minimal fees, and enhances liquidity for in-game assets while empowering players to maximize their earnings.

The BinaryX GameFi trading platform supports transactions involving 

In January 2022, BinaryX launched the BinaryX DAO, a first for a GameFi project, through which BNX token holders can participate in the project's community governance, determine airdrop and dividend ratios, and submit proposals on how to improve the BinaryX ecosystem.

Case in point: BinaryX's community participated in voting for/against the platform's rebranding to Four during a community vote that was held from Sep 21–23, 2024.

The BinaryX Treasury serves as the financial backbone of the BinaryX ecosystem, supporting the development and sustainability of its GameFi projects. Some sources of assets used to fund the treasury include initial capital injection by the BNX team, income from gaming activities, income from the IGO launchpad and profit from external investment.

Profits in the BinaryX Treasury are used to reward BNX stakers, incentivize BinaryX sidechain node providers and finance strategic investments in third-party projects.

BNX is the native token for the BinaryX platform. Its original maximum supply of 2.1 billion tokens was adjusted to 580 million after a community vote in late July 2024.

Distribution of the 580 million BNX tokens is as follows:

Following BinaryX's rebranding to Four, BNX will change to FORM, and holders will be allowed to exchange to the new token at a ratio of 1:1 (details to follow at a later date).

BinaryX has integrated a multi-token model. Apart from BNX, the other two tokens associated with the platform are as follows:

BinaryX officially rebranded to Four on Feb 21, 2025, following an overwhelming vote via its DAO, marking a significant transformation in its vision for GameFi and DeFi innovation. This shift comes with a revamped website, which will serve as a hub for the GameFi platform, IGO launchpad and Four.meme, a new addition to Four’s expanding ecosystem.

Following the rebranding, a 1:1 token migration from BNX to FORM is necessary in order to enhance the token's identity and align with the project's new direction. FORM remains on the BNB Chain, ensuring smooth compatibility with existing infrastructure.

 (CEXs) won’t need to do anything — the token swap to FORM will take place automatically. BinaryX will liaise with these exchanges to switch from the BNX contract address to the one for FORM.

 (DEXs), cold wallets and self-custody wallets will need to carry out a manual token swap based on a converter provided by BinaryX. To carry out this token swap, you’ll need to do the following:

 landing page (link will be provided at a later date).

4. Sign to authenticate your transaction to receive the FORM tokens.

5. Add the new FORM contract address into your wallet to see the new tokens.

You can buy BNX as a USDT Perpetual contract (

) on the Bybit trading platform. However, the BNXUSDT contract will be delisted on Mar 17, 2025, 9AM UTC, so make sure to close your open positions and cancel your active orders for BNXUSDT as soon as possible.

Over the years, BinaryX has consistently demonstrated strong performance. The rebranding of BinaryX to Four marks a bold step forward in its mission to impact the web3 space. This transformation reflects the project’s commitment to expanding its ecosystem, enhancing token identity and integrating innovative elements, such as Four.meme, alongside its GameFi platform and IGO launchpad.

By adapting to the evolving crypto landscape, Four is positioning itself as a comprehensive hub for web3 and gaming enthusiasts so that it can offer a seamless experience for gamers, investors and meme culture participants. The introduction of the FORM token ensures a more cohesive and recognizable branding, reinforcing Four’s long-term vision. Thanks to the smooth migration process from BNX to FORM, users can continue participating in the ecosystem while benefiting from enhanced liquidity and utility.

Four remains dedicated to GameFi innovation, supporting successful blockchain games such as 

, all of which feature play-to-earn mechanics, NFTs and decentralized governance. The revamped platform is designed to foster a dynamic gaming economy, support new game launches and provide a secure environment for trading digital assets. With its rebranding and expanded offerings, Four is set to lead the next wave of blockchain gaming and DeFi innovation, uniting gamers, developers and investors in a vibrant web3 ecosystem.

Intermediate

binaryx crypto.png

From BinaryX to Four: A unified hub for GameFi, IGOs and MemeFi

Learn about the benefits of using Bybit Pay and the step-by-step instructions to get started with Bybit Pay now.

Traditional financial systems and blockchain-based ecosystems have long operated in silos, creating friction for users and businesses alike. 

 is a new payment solution that’s been designed from the ground up to solve this issue to make cryptocurrency transactions seamless for any users.

With the aim of mainstreaming crypto payment options, Bybit Pay has already begun partnering with traditional payment solution providers, enabling users to transact with cryptocurrencies through existing infrastructure. For example, with its recent 

, Brazilian users can now shop by using cryptocurrencies in a quick and effortless manner. 

In this article, we’ll explain the benefits of using Bybit Pay and provide step-by-step instructions for new users who want to get started with the platform.

With more than 60 million users on the Bybit platform, Bybit Pay empowers merchants with access to the global network of its vast user base. Meanwhile, users benefit from a seamless integration with web3 wallets that makes paying with crypto as easy as paying with fiat currency. The platform also offers collateralized payment tools that allow users to borrow against their NFT and crypto holdings. 

Through these innovative features, Bybit Pay blends the ease of traditional finance with the flexibility of cryptocurrencies, creating an ecosystem that benefits both users and merchants.

Bybit Pay can be accessed using the Bybit App on mobile and desktop. 

While filling in the form, make sure that the information you enter matches the information you’ve already provided during 

: As of now, only verified users in Brazil can make transactions using a Pix QR code.

Since the Pix integration, Brazilian users can use Bybit Pay wherever Pix is accepted. This opens up a vast network of offline establishments in the country, since Pix is Brazil’s leading instant payment system provider. 

In addition to offline establishments, Bybit Pay can also be used with a number of e-commerce providers for online shopping using cryptocurrencies. Bybit Pay will be available to users from other regions soon.

With the launch of Bybit Pay, Bybit is integrating crypto payments with traditional payment services providers — and vastly expanding the number of places where cryptocurrencies can be used.

Beginner

bybit pay.png

How to use Bybit Pay for effortless payments

SwapX (SWPX) is a Sonic-based DEX offering concentrated liquidity, automated liquidity management and modular plugins for seamless DeFi trading.

In mid-February 2025, Argentina's President Javier Milei posted a tweet promoting a previously poorly known cryptocurrency, 

 (SOL)–based Libra (LIBRA), triggering a huge price surge from fractions of a cent to over $5 within hours of the tweet. The token's creators, who controlled 70% of the supply, quickly sold their holdings at the peak, causing the price to plummet to less than $1 within hours. Approximately five hours after his initial post, Milei deleted his post, distancing himself from the project as 

The LIBRA token debacle further tarnished Solana's reputation, already undermined by the numerous dubious meme coins on Solana, exacerbating SOL's decline. US president Donald Trump's announcement about including SOL in the proposed US strategic crypto reserve assets list helped soften the decline, but the damage had already been done.

Against the backdrop of Solana’s reputational troubles, developers and 

 (DApp) operators are actively searching for alternatives — and many are turning to 

 (S), the rebranded reincarnation of Fantom (FTM), as a chain that also features great performance and cost advantages, while also being 

 (EVM)–compatible and, importantly, largely free from the image of a scam nest.

Among the many DApps embracing Sonic is SwapX (SWPX), a 

 (DEX) that offers a number of innovative features, including concentrated liquidity (CL) provision, modular plugins for additional functionality, automated liquidity management, user-friendly account abstraction and more.

 (SWPX) is a DEX platform built on the Sonic Layer 1 blockchain, which aims to provide efficient, user-friendly and flexible trading solutions for crypto token traders and liquidity providers. 

SwapX takes advantage of Sonic's speed and cost advantages to offer cheaper transactions and nearly immediate settlement, both of which are important considerations for DEX users.

The SwapX project has implemented several features and services to address the needs of 

 and liquidity providers at all expertise levels.

SwapX's execution engine is powered by Algebra Integral, a 

 (DeFi) technology provider offering a suite of 

 (AMM) solutions. The SwapX DEX has integrated Algebra Integral's V4 engine, a modular architecture that lets exchanges use customizable plugins for additional functionality. SwapX's plugins support modular upgrades and extend the platform's capabilities by adding new services without disrupting core operations.

 (UNI) v3–style CL pools, which let liquidity providers contribute their funds within specific price ranges. The platform also features automated liquidity management (ALM), so users can add a single token to liquidity pools (instead of having to deposit a pair of tokens). It also removes the need for liquidity providers to actively monitor their positions.

SwapX prides itself on its robust operations, which ensures overall security by restricting plugins from handling user funds directly, thus minimizing the risk of potential vulnerabilities. The platform also uses thoroughly audited, verified 

Another innovative feature of SwapX is account abstraction (AA), which simplifies user authentication by allowing access via an email or Google account. Instead of relying solely on 

, AA uses smart contracts to manage accounts, which further enhances security.

The SwapX project is unrelated to the earlier (and, by now, largely defunct) BSCEX AMM aggregator platform, which was sometimes referred to as BSCEX SwapX.

SwapX's choice of the Sonic blockchain isn’t incidental. The 

 chain has been gaining popularity over the past few months, thanks to its stellar technical properties, low transaction costs and scam-free reputation.

Sonic, a rebranding of an earlier popular blockchain Fantom (FTM), launched its mainnet in December 2024. The Sonic chain boasts a throughput capacity of up to 10,000 

 and sub-second finality times. Unlike Solana, Sonic is also EVM-compatible.

In February 2025, DeFi activity on Sonic began to rise, with some of the new activity supported by Solana's difficulties and the search for a less controversy-affected hosting platform.

Supported by the broader shift from Solana to Sonic, some Sonic-based DeFi protocols — such as Shadow (SHADOW), Metropolis (METRO) and SwapX itself — saw their token prices surge around mid-February. However, by early March, many of the tokens were off the highs to which they’d quickly climbed.

We noted above that plugins are one of SwapX's core features, allowing it to extend the basic AMM functionality. YieldSync is probably the most important of these plugins.

The plugin, created jointly by SwapX and Algebra Integral's developer, enhances liquidity pools containing yield-bearing assets like 

 (LSTs) and liquid restaking tokens (LRTs). It redirects part of these tokens' yield into incentives that encourage voting within the platform's governance system. 

This process increases the overall rewards for liquidity providers and makes the pools more attractive, which draws in more liquidity and boosts the pools' efficiency.

CL, another key feature of SwapX, allows liquidity providers to contribute their funds within specific price ranges to optimize the use of their liquidity. First introduced by Uniswap v3, the CL model can deliver greater returns and lead to more efficient capital usage than the standard AMM setup, whereby the contributed liquidity is spread over the entire price range in the pool.

It should also be noted that while CL-based liquidity provision can be highly profitable, it requires active management and is more complex than the standard AMM model.

SwapX features four distinct liquidity pool types 

 Classic Volatile AMM, Classic Stable AMM, CLAMM and single-token pools offered in partnership with the ICHI liquidity strategies provider.

Earlier on, we mentioned SwapX's ALM functionality, which is leveraged by the ICHI pools. In essence, SwapX's ALM helps liquidity providers in CL pools automate the process of adjusting liquidity within specific price ranges. This reduces the need for constant monitoring and manual adjustments, one of the core drawbacks of the standard CL model. ALM aims to maximize yields by keeping liquidity active within profitable price ranges. In other words, SwapX's ALM might be described as an "auto-pilot" mode for concentrated liquidity provision.

 asset issued on the Sonic chain. Its primary function is to facilitate 

 voting on the platform. Holders of SWPX can lock their funds and be issued veSWPX, an NFT asset that grants the rights to participate in on-chain votes, and attain voting power alongside farming rewards. In addition, veSWPX qualifies you to receive weekly rewards from swap fees and voting incentives. Eligible users can also receive the token via 

SWPX has a max supply of 123 million and a total supply of over 58 million, of which around 14.44 million are in circulation. The token's maximum supply limitation is 123 million. As of Mar 14, 2025, the token is trading at $0.30 and has a market cap of $4.44 million, according to data from CoinGecko.

SwapX is among the newer DeFi platforms taking advantage of the Sonic blockchain's recent popularity, technical efficiencies and low costs. With an array of options for traders at all levels of expertise, SwapX has solid potential to become a significant player, at least within the Sonic ecosystem. 

Whether you want basic token swaps and liquidity provision, or prefer to utilize more advanced strategies, such as CL-based liquidity provision and ALM, SwapX has something to offer you.

swapx crypto.png

SwapX (SWPX): The future of liquidity provision on Sonic

Indices are essentially statistical measures that track the performance of a group of assets. Learn more here.

From the Dow Jones Industrial Average (DJIA, or simply the Dow) to the Hang Seng Index (HSI), the world’s major stock market indices are vital benchmarks that reflect the performance of leading companies across regions. For beginning and veteran traders alike, such indices act as overarching market bellwethers that provide deeper insights into market trends and serve as tools for trading strategies, risk management and portfolio diversification.

Given their mass popularity, indices are widely traded in the forms of futures, options and 

 (ETFs), enabling traders to effortlessly hedge against volatility or speculate on market movements through their preferred instrument. In this article, we’ll explore the world’s biggest market benchmarks, their composition, significance in trading and their role in shaping global financial markets.

Indices are essentially statistical measures that track the performance of a group of assets. For example, by referring to the three major US indices, we can immediately tell how a particular segment of the market is performing, thanks to the snapshot provided by these indices. 

At their core, these indices provide a way to gauge market trends, manage risk and diversify portfolios by offering a broad view of different sectors or asset classes. They’re widely used in financial markets for investment strategies, and as benchmarks for evaluating performance.

While more popular indices typically track the prices of stocks, traders may also consider trading indices that take into account the performance of other asset types, such as commodities and fixed-income instruments (e.g., bonds).

How indices work — mechanics, composition and weightage

Beyond simple tracking, indices also serve as the basis for numerous financial products that enable traders to participate in broad market movements without needing to purchase individual assets. This unmatched level of accessibility makes indices crucial for both institutional and retail traders. To go one step further, the construction of an index — including the specific assets being included, and their weighting — can significantly impact the index’s behavior, and the extent to which it effectively represents its target market.

Overall, understanding these construction methodologies is vital for traders who want to accurately interpret index movements and make informed decisions. We’ll go into more detail on the inner workings of index trading in the subsequent sections of this article.

Index trading involves speculating on the price movements of a group of assets without directly owning them. This is typically achieved through financial instruments, such as contracts for difference (CFDs), futures or options. The following section provides a detailed explanation of the mechanics involved.

As previously mentioned, indices are composed of various assets, such as stocks, commodities or bonds, and their performance is tracked using different weighting methods. The most common methods include the following.

Now that you’re familiar with the technicalities involved with index composition, let’s dive deeper into the instruments involved with the trading of indices.

New to trading indices? No worries. Here’s a quick four-step process to help you get started.

In summary, index trading provides a way to participate in broad market movements through various financial instruments. It offers diversification and flexibility but requires careful 

, given the volatility associated with index trading.

Trading indices offers several compelling advantages that make them an attractive option for both novice and experienced traders. The following reasons are worth considering.

Indices can be categorized based on their coverage, weighting method and focus. 

Following are some of the main types of indices.

Index prices are influenced by a variety of factors that can be broadly categorized into economic indicators, company performance, market sentiment and external events. These factors interact dynamically, influencing the overall performance of indices and shaping market trends.

For traders looking to get started with index trading, 

 with deep liquidity and competitive spreads. For a limited time (from Mar 13 through Apr 12, 2025), we’re running a 

 in which traders can enjoy zero fees on selected index pairs, making it even more cost-effective to explore index trading.

Ultimately, trading indices can seem daunting, given their depth of assets and the mechanics involved. For example, the S&P 500 comprises hundreds of stocks, each with different amounts of weightage. If mega-cap stocks like Tesla were to face some form of volatility, there would definitely be an impact on the index. As such, beginning traders who are new to index trading must 

 prior to transacting with indices, given the risks involved with the use of leveraged instruments.

For those with a longer time horizon in mind, trading indices can certainly be useful, especially if you’re intending to 

 your entries over time when building up your position. Given the extent of diversification involved and the sheer amount of liquidity present, it certainly would make sense for any trader with a long-term bullish inclination to trade indices and hold their ETFs for the long haul.

With a reliable platform like Bybit Gold&FX, you’ll practically be spoiled for choice when it comes to navigating the diverse world of indices and other financial instruments. By empowering traders with access to real-time data, advanced charting tools and a user-friendly interface, Bybit Gold&FX helps traders make informed decisions when analyzing market trends and execute trades with precision.

Whether you're interested in tracking the performance of major stock market indices, exploring commodity indices or diversifying your portfolio with forex and gold, Bybit Gold&FX offers the necessary resources and support. The platform's focus on security and transparency provides traders with peace of mind, allowing them to concentrate on their investment strategies and capitalize on market opportunities. In essence, it transforms the complexities of index trading into an accessible and sleek experience.

indices, index trading.png

Indices: Trading the world’s biggest market benchmarks

Trading

DeFi

Investing

Crypto rug pulls often happen in DEXs, and they are notorious for your investment. Learn how it happens & spot the rug pull signs before it's too late.

Untitled.png

Untitled_(1).png

WhaleFarm-Token-Rug-Pull.jpeg

If you’re standing on a rug and it’s suddenly pulled out from under you, unless it’s a magic carpet, you’d fall on the floor. Worse yet, you might spill or lose everything you were holding onto at that moment. That’s exactly why you need to be aware of rug pulls, especially when you’re trading a volatile crypto asset.

In this guide, we’ll explain what a rug pull is, how it happens and how you can avoid them. Here’s what you need to know to stay ahead and minimize risks.

A crypto rug pull happens when developers create a token paired with a valuable cryptocurrency, list the token on 

 (DEXs), and then pull all the funds out after the investor’s buy-in. 

Rug pulls are usually perpetrated by malicious scammers who create hype around a coin and then abandon the project, running away with the money. These cryptocurrencies are usually paired with reliable utility blockchains, be it on 

 or Binance Chain. This is because investors who swapped their ETH for the listed token gives the creators of the token a chance to withdraw the ETH from liquidity quickly. For example, meme coins are one of the craters that cause investors to concede into the FOMO spirit and get rug-pulled.

) space by pulling funds from a liquidity pool. To understand this in-depth, we need to know how liquidity pools function.

A liquidity pool is effectively a market maker for DEXs, meaning it provides buy and sell orders for a given token. Because there is no centralized system for facilitating trades, crypto exchanges need a way to keep order flow going. It’s also easy to list tokens on a decentralized exchange because there’s no one to audit the token. 

At its core, a liquidity pool is a pile of investor funds locked in crypto pairs that allow users to trade between different cryptocurrencies. Crypto pairs usually include a popular cryptocurrency like Ethereum’s (ETH) because it’s a well-established platform token with high availability. 

To encourage investors to pool their resources and act as a liquidity provider (LP), a trading fee is charged on orders and awarded based on the total value lent to the pool (similar to a dividend). In exchange for the crypto in their wallet dedicated to the pool, each user is entitled to a percentage of the overall fee. The higher the amount lent, the more money an investor stands to make. 

Creators of liquidity pools vie for more investors by offering higher yields. The below graphic depicts simply how liquidity pools function.

Once the creators of a rug pull have amassed a large amount of liquidity providers with substantial capital, they pull all the available assets out. The coins are then exchanged in another marketplace and made untraceable to the victims. Because Ether is often used as the exchange currency, it’s easy to transfer between other wallets and “disappear” to other users. This removes all crypto assets — leaving the pool empty and the liquidity providers with nothing but disappointment. 

Why DeFi Became a Common Space for Rug Pulls 

As the name suggests, DeFi protocols have no centralized oversight relying only on smart contracts, making it a prime target for DeFi rug. In the first seven months of 2021 alone, 

. However, investors are getting savvier, and the amount of crypto stolen on DeFi platforms is down 64%.

With DeFi projects, bad actors can create tokens, raise their profile and recruit investors. By using 

, the tokens are created and listed without audit. All the scammers need to do is create a token with some apparent value, promise use cases, and create a market appeal for investors to buy it. 

As soon as money starts flowing into the project, its value shoots up and the creators sell these tokens, draining the value of the tokens to zero. They essentially take the money promised to the project in token sales for themselves, pack their bags and flee — in other words, pulling the rug from underneath their buyers. 

Since the DeFi space isn’t regulated, it’s easily targeted for crimes.

Rug pulls in cryptocurrency markets are easy to pinpoint — 

In August 2021, a criminal group walked away with 

 of funds taken from investors in one of the largest cryptocurrency DeFi scams to date. All social media accounts and the website for Luna Yield, a project on the DeFi platform Solana, were closed down. When users withdrew (or “unstake”) their funds, they found the pools were empty. They had fallen victim to a rug pull.

In one of the most publicized cases of 2021, Thodex, a Turkish-based platform, was closed, and its founder, Faruk Fatih Özer, is rumored to have 

. Özer is still on the run, but is being pursued internationally by

. Thodex built an active user base of 390,000 financial users. In April, the DEX was unexpectedly closed. It’s still unknown where the missing funds went.

2021 also saw DeFi platform Compounder Finance 

worth over $10.8 million in stolen customer funds. A breakdown revealed that contracts worth $5 million in Dai, $4.8 million in Ether and $750,000 in Wrapped Bitcoin (WBTC) were drained from Compounder Finance. In a scheme that sounds like something out of a thriller, the team replaced their secure and audited contracts with malicious ones that enabled them to steal locked investor money. They also cleverly mimicked the name of Compound Finance, a legit DeFi interest-earning protocol, to lure their marks into investing.

In March 2021, Meerkat Finance, a DeFi yield project using a forked cryptocurrency of 

, perpetrated a rug pull worth $31 million in crypto assets. The platform’s official Telegram channel claimed that its smart contract vault had been compromised. Investigations suggested that either the private key of the Meerkat deployer was compromised or the incident was self-directed by the owners of the project. 

In June of this year WhaleFarm, a DeFi project token 

 in exchange for staking its pool, crashed 99% in a matter of minutes (chart below), scamming investors out of $2.3 million worth of cryptocurrencies. The team, which was entirely anonymous from the start, is still unidentified.

. These range from small value scams in the thousands to 

Image credit: TradingView and Reddit. An example of WhaleFarm Token Rug Pull.

Signs That an Exit Scam and Rug Pull Is About to Happen

 the total monetary amount stolen is dropping because investors are learning to watch for the signs. If you know what you’re looking for, it becomes easier to avoid these schemes. Below are some common signals to help you avoid falling victim to such an exit scheme.

Many DeFi pools offer to facilitate the trade of tokens and lend them inside, creating extra yield to investors in the pool. WhaleFarm, for instance, 

. If you see a yield farm offering returns that are too good to be true, they probably are.

There may be a rationale for creators to remain anonymous, 

 to personal reasons. However, anonymity also makes it harder for bad actors to be tracked after pulling off a scam. If a project is started anonymously, with new social media accounts created within days or hours of a launch — that’s a big red flag. 

If projects have no ties to other successful projects or the crypto community as a whole, that’s also a red flag. Look on a project’s website for meaningful information about the team. If it’s just a bunch of fluff, proceed (if at all) with caution.

With any asset, if you can’t see why the value is rapidly increasing, beware. Scammers can inflate a project by either putting in funds or creating false hype to get people involved in it by exploiting the “FOMO” — fear of missing out. Look for legitimate reasons such as new exchange listings, partnership announcements, or other good news that could be driving the spike. If these are non-existent, it may be a rug pull or 

. Remain skeptical unless you have a good reason not to be.

Most crypto scams are designed with a rug pull in mind. Because of this, the use case for the token or pool is vague and unpractical. Instead, the creators rely on social media posts, crypto influencers and paid advertisements to gain support. Try to understand the legitimate use case for a project before jumping into a new token or pool. All sizzle and no steak won’t provide anyone with a good meal.

Most legitimate liquidity pools lock in investor money for a certain amount of time. This does two things. First, the pool liquidity needed for token swapping, lending and other activities is ensured, so that the pool can continue to function. Second, it keeps the creators from quickly emptying the pool once it gets to a certain size — and running away with the money. A locked pool helps to safeguard investor interests. If there’s no lockup, it’s another red flag. 

By exercising caution and looking for the signs above, investors can mitigate the risk of becoming entrapped by a rug pull. Prudent investors exercise caution when entering new markets or investing in new pools. Greed can make poor business decisions seem much safer than otherwise, so knowing the signs of foul play will decrease one’s chances of falling prey.

Avoiding scams and potential rug pulls in crypto projects ultimately boils down to awareness before investing and doing your own research. Here are a few more ways to check the legitimacy of any project. 

One way to assess a token’s legitimacy is to check its liquidity. Legitimate projects usually have millions in liquidity. These projects lock up a significant amount of tokens for a long time — and again, they cannot be withdrawn from the liquidity pool during that time frame. Check the project’s staking period, and verify the amount of liquidity belonging to a project’s owners. Legitimate platforms like PancakeSwap and Uniswap usually have liquidity information readily available. 

Review Github, Whitepaper and Social Media Channels 

Github is the code base hub for DeFi projects, usually containing their development activities. It’s well worth keeping an eye on these, as well as a project’s social media channels including Telegram, Twitter, etc. If the project is apparently not going through any active development and is a fork of another project, it might be a bad sign.

Any project that’s potentially a rug pull is defined by its owners and creators. Their relevance to the cryptocurrency space, as well as their previous involvements, track records, social media and industry history and connections must add up if they are to gain credibility. The more questions than answers about the owners and team, the more likely the project is to be a scam. 

Look at Holders and Listings on DEX Platforms

If a token has only a few token holders and isn’t actively traded on multiple platforms, it’s possible that it might be a rug pull waiting. Tools like Etherscan and CoinGecko can reveal more information about a token. 

DeFi is a young industry with great potential. It offers the freedom to borrow without any restrictions on credit history. All you need to borrow is collateral. Moreover, DeFi banking is truly private, as there is no centralized authority involved in dictating terms or taking high transaction fees. However, the downside of such an unregulated space is that anyone can list an asset with no central control over it. There’s no one to tell if a project is out to scam people, and that’s where rug pulls come in. 

As with any new technology, unethical players in the crypto space will try their best to con people who have less knowledge and experience. With many new projects, prices can be inflated short-term, and sometimes it can be difficult to separate hype from reality.

Why Crypto Rug Pulls Happen in DeFi — and How to Avoid Them

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards