Rug Pull- Asset Valuation Implosion
Imagine you are chatting with a friend about your latest investment strategy. You are standing in a nicely adorned room, cocktail in hand on top of a plush, yet sturdy, handcrafted rug. Your friend has several questions, fully engaged in the new concept you are discussing. Nevertheless, in the middle of the conversation, the rug suddenly accelerates across the room. You are thrown against the wall with it. Dazed and confused, you suddenly find yourself looking at the ceiling, your feet disconcertingly above your head. Without notice, the rug of this beautiful room has been pulled out from under you.
Rug pull is a sudden, device and unexpected change in market sentiment regarding an asset’s value. Rug pulls can happen for a variety of reasons. Because of this, identifying them can be a challenge even for the most seasoned investors. With so many crypto projects launching each day, it can be difficult to determine legitimate investments from marketing buzzwords. Bad projects can take the form of market demands that simply do not exist, or elaborately crafted scams years in the making. All the while, incredible projects and teams fly under the radar, without a notice from anyone of the hungry investors.
Discerning between unicorn investments, lackluster business propositions, and outright scams is difficult enough today. The potentials for blockchain are vast and investment potential seems to grow each day. But the digital nature of these assets mean that a trail of clues regarding their validity and market potential have been left throughout the web.
Rug pulls happen swiftly and suddenly. A project team faces an insurmountable setback and folds. The market shows no appetite. Funds are misappropriated or disappear. A whale surfaces and unloads. Projects all face business cycles and blockchain makes the speculative nature of their potential accessible to all from the start. Using data and signals to separate hype from market potential is a reliable means of ensuring you always keep your feet well positioned on top of the rug.
Daniel Pinto - Market Analyst @ TradingBull.io
More info:
Website: TradingBull.io
Pitch Deck / Whitepaper / Tokenomics
BCOs in the past: DeFi Prime: “Bonding Curves Explained”
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