SocialFi is a game-changer in today’s social media era. Imagine if you could get paid directly for your funny tweets or stunning photos on Instagram. This is the whole idea behind SocialFi crypto projects.
People with large followings or communities on social media barely get any revenue from the posts and content they create. However, just like with most crypto projects, scammers are always lurking around to take advantage of the masses.
Below, we look at some steps you should consider to avoid SocialFi crypto project scams.
Table of Contents
Research Well and Deep
Many people are quick to sign up on the latest social media apps in their quest to build a following or, in some cases, because of FOMO (fear of missing out). However, they often don’t research or scrutinize the project before signing up.
Legitimate SocialFi crypto projects are open about what they do and the faces behind them. Avoid any app with “anonymous” founders. The chances are they don’t have good intentions, and they might scam you.
Go Beyond the Hype When Investigating SocialFi Crypto Projects
It is very easy to get pulled into a SocialFi crypto project just because of the promise of free tokens. However, this can cloud your judgment. Take your time and look at the numbers or promised returns.
Be wary of out-of-this-world promises. In most cases, this is bait to attract more users, and there is a high chance the promises are fake.
Also, read through the details relating to token distribution and purpose. What percentage do creators earn? What can you do with the tokens earned? Can you use the tokens to access premium services, or can they be traded for other crypto coins using popular DEXs like Flipper?
Beware of Pump-and-Dump Projects
Pump-and-dump schemes are popular in today’s crypto industry. This is how it goes. Influencers or politicians promote a crypto product to inflate its value. Once many people purchase or invest in it, the influencers and project founders jump ship, leaving users with a worthless coin or token.
Try and curb your fear of missing out when you come across influencers marketing “the new era of social media.” You will also get invites to purchase tokens from SocialFi crypto projects in an attempt to boost its price.
Audit the Tech
You don’t need to be a nerd to understand how SocialFi crypto projects work. Take your time and understand the technology running the SocialFi app before signing up. Legitimate SocialFi crypto projects will have their smart contracts available on public repos.
A whitepaper should also be available. The paper should explain how the project works and how users will benefit. Inside it, there will be steps on new features and how they will be delivered.
Also, check out what popular tech content creators have to say about the project.
Summing up
SocialFi crypto projects will revolutionize the social media space. However, the projects are still new, and it is very easy to get scammed. The tips in this guide will help you steer clear of scams and pump-and-dump projects.
