How to Fleece Investors With Your Next Crypto Shitcoin
So you’ve finally started to understand the game. You’ve finally realized that the devs are the ones making the money — not the investors. And now you want your piece of the shitcoin pie. But where do you start?
Good news — it’s easy. From bankrupt, convicted felons to bedding and vacuum cleaner salesmen, anyone can make life-changing money as a shitcoin dev — and you are no exception. Here’s how -
“Hard Rugs are so 2021"
The formula used to be simple. First, pay someone to create a token on the Ethereum or Binance Smart Chain along with a cookie-cutter whitepaper and colorful roadmap. Next, pay an influencer or two to shill your token as the next big innovation (extra points if it supports a green initiative). Then, pump the token at launch, and either pull the liquidity or mint new tokens to dump.
While hard rugs were lucrative, the scamming community has found that by extending the rug, they could earn orders of magnitude more from the grift. Here are some key considerations for your crypto scam project.
Community is Key
The first rule of crypto shitcoin scams is: you must build a community of gullible investors. The second rule of crypto shitcoin scams is: you must build a community of gullible investors.
Your scam won’t work if you don’t first cultivate a community of investors that will “fight the FUD” and help convince others to invest. Reward these individuals. Give them worthless status upgrades on discord. Follow them on Twitter so they feel important. Send them a few free tokens.
Guided by an ethically corrupt community manager, these core community members help validate the scam to others. Of course, you will rip them off too; however, you need to be smart about using them to build a community that will not only refuse to acknowledge an inevitable mountain of evidence that your shitcoin is a scam, but attack it as FUD.
Perpetually Updating Roadmap
Roadmaps are a critical component of a soft rug. They can jumpstart FOMO by boasting of grandiose future achievements that get your gullible investors excited and talking to other potential investors.
It used to be enough to include roadmap milestones of future tier-1 centralized exchange listings. Not today. The game has evolved. Today, it’s best to link your scam token with a non-crypto business. Of course, there will be no legal tie to any outside business even if you fund it with proceeds from the scam, but it will excite the community nonetheless into believing they will become wealthy from these endeavors.
The roadmap itself is something you will adjust over the course of the rug. When you inevitably shift the timelines, you must introduce other fanciful endeavors into the roadmap. FUDers will point out the missed or extended timelines, so you must give your community new fictious future endeavors to use while defending the missed timelines. Of course, don’t worry about executing on anything of real value. The goal is to keep the scam alive and bilk your investors for as much as you can.
Tier-2 Centralized Exchange Listings
From a project value perspective, Tier-2 CEX listings are worthless. Actually, they’re of negative worth. You have to pay listing fees. You have to pay a market maker. You have to deploy tokens to each CEX you list on. However, you’ll get close to nothing in return (aside from a headache from dealing with fellow con artists looking to maximize their take).
While worthless for a legitimate project, they are an important tool for the crypto scammer, as they bring two key benefits to the grift: (1) They increase hype among your gullible community members who aren’t aware of the Tier-2 CEX con. Tell your community about all the new investors that will come from the exchange. Tell them about the claimed volume of the CEX — even though insiders know it’s completely fake (see wash trading).
(2) Using a market making service, you will create artificial volume at each CEX with wash trading. Of course, this costs money that, if this was a legitimate project, would be put to productive use. However, using the fake volume to induce hopium and to fight the FUD is important for a scam of no real substance. Let’s face it, most of your investors will have never heard of wash trading. They will have no clue that the volume is fake, and then attack your dissenters armed with fake volume and investor numbers.
Dump on Dumb Investors
Your job is to turn your worthless shitcoin tokens into fiat. This is the game. Never lose focus. However, if not done smartly, FUDers will quickly identify and show others what you’re doing, thereby decreasing the life of the rug. All but the most die hard community members will eventually step away from defending a project with enough blatant evidence of insider dumping.
So, what are some techniques for dumping on your investors so that FUDers won’t easily find out?
(1) Private Sale & Pre-Sale Wallet Distributions:
If you dump from one large wallet that holds a significant amount of the supply (e.g., the contract owner wallet), FUDers will eventually find that wallet and call out your dumping.
To hide the dumping, set up an array of insider wallets and distribute small quantities of the tokens to these wallets during the pre-sale or private-sale distribution. This approach will mask the transfers to insider wallets as legitimate pre-sale airdrop distributions. FUDers will have a much harder time identifying your wallets as you dump on your investors.
(2) Move Tokens to Tier-2 Centralized Exchanges for Dumping
While distributing tokens to hundreds of small wallets for dumping does help mask your scam, pesky FUDers will eventually track them back via blockchain transfers.
However, moving the tokens to a tier-2 centralized exchange can hide the dumping further. Have the market maker set the price on the CEX(s) lower than the on-chain swaps to induce investors to buy on the CEX. You may need to set the price low enough that it allows arbitrage from the exchange to the decentralized exchanges, but that’s ok. Your job is to clandestinely unload as many insider tokens as possible. If you have to give up some economics to do so, consider it a cost of doing business.
Win a Prestigious [i.e., Scam] Crypto Award at a Prestigious [i.e., Scam] Crypto Conference
Phony crytpo conferences are a great way to establish credibility among current and future investors. Photos and videos of you and your team on stage, presenting, and accepting awards will dupe newbies into thinking you’re legitimate. Of course, the whole event is a scam, full of other scammers, working their own grift.
The gaudiest conferences include a red carpet walk, a keynote address, and a fake award for you to win. Just make sure you do a little due diligence — you don’t want the FUDers laughing at you when you and another scammer choose the same award to win and post it all over your respective social media accounts.
Burn Baby Burn
Burning tokens is another key tool scammers can use to induce a pump in price. Seeing big burns inevitably increases excitement in the project and drives up the price.
Unfortunately, burning tokens also reduces the amount of tokens you have to dump. Don’t worry — we will discuss how to get those tokens back in the next tactic. So, burn away. Hype up the burn with your community. Show them the USD value of the burn. You’ll get it all back when you migrate to a V2 or V3 token contract.
Token Versioning: V2 / V3 / V4 / V5 / …
Creating new token versions is another critical tool in the scammer’s toolkit. As discussed in the Burn section, burning tokens reduces the amount you have available for dumping. However, a new token version can be used to mint burned tokens back into existence.
It’s simple. When you create a token, you set the supply. If you already have a token, you can create a V2 version with a new supply and establish a corresponding conversion rate from the V1 to the V2 contract. This is exactly how you can reverse burn those tokens back into existence.
New token versions can also mask other activities that will help you bilk your investors for more money. One great trick you can play on unsuspecting investors is to expand beyond one blockchain. If you launched your token on the Binance Smart Chain, add the Ethereum chain.
There are many benefits to launching your token on multiple chains. First, if you use the same contract address on both chains, you can greatly confuse your investors. You can then increase your total supply so that you have more tokens to dump and/or burn, and your investors won’t understand that they’ve been heavily diluted.
Second, you can create a bridge contract. While there won’t be any real demand for bridging your shitcoin across chains, you can use the bridge to further confuse your investors about the supply. Tell your investors that moving tokens to the bridge contract is essentially the same thing as burning the tokens. Don’t worry. You can pull those tokens out of the bridge contract and dump them when the time is right.
Look at All the Utilities
Your dumping will be an inevitable drag on price. Creating copy-paste products and claiming they are innovative is a great way to keep your investors focused on the future and fighting the FUD and not focused on the declining price.
Creating your own swap is a critical and easy step for every scam token. For a modest fee on Fiverr or Upwork, you can buy your own rebranded copy of PancakeSwap or Uniswap.
Additionally, you can easily make a small change in the swap router code to increase the swap fees without your investors realizing.
Once you’ve launched your own me-too swap, you can begin using the magic word “ecosystem” to hype your investors. Using this word helps promote FOMO and signals to your investors that your project is going to be huge — the next Apple or Amazon. Of course, that’s nonsense, but if you’ve cultivated your community properly, they will take the bait, hook, line and sinker.
FOMO is the most powerful force behind a crypto scam. Your own swap, wallet, centralized exchange and blockchain help sell potential investors on the grandiose future of the project. Little do they know that each of these items can be copy-pasted for a modest fee.
The goal with these products is to keep fish (aka investors) on the line, with eyes toward the future (not the declining chart). Additionally, these cheap copy-paste products will provide proof points so that your community members can say, “look at all the team has delivered in such a short time.”
Pulling the Plug: Exiting the Scam
At some point, you will notice that the hopium has waned. Efforts to excite your community with a new foreign partnership or an exciting new addition to the roadmap will have little to no impact. At this point, it is time to pull the plug and extract whatever value is left.
You have a few options to consider. First, you can pull the liquidity and walk away. Your name will be tarnished, and it will be difficult to launch a new project under your name.
Second, and a better option, is to dump from a major insider wallet, extracting most of the BNB and/or ETH from the liquidity pools, and claim that you’ve been hacked. This can be done from your fee-receiver wallet or from your bridge contract. If done well (extra points for creating an apology video to your community with equal parts sadness and anger), you will preserve your image and set yourself up nicely for your next grift.
Disclaimer:
This article was written tongue-in-cheek. Unfortunately, scammers have overrun many parts of the crypto space. This article is meant to shine a light on some of the techniques they use to defraud investors. I remain hopeful that anyone who has deployed these tactics to con unsuspecting individuals will receive a stiff prison sentence and severe penalties on top of restitution payments.
