Key Points
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The pumping program in Web3 manipulates the price of cryptocurrencies by coordinating purchases and misleading information and hype to attract investors and then sell tokens at scale, which is almost worthless.
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Decentralized anonymity and 24/7 unregulated transactions make the industry particularly vulnerable to these manipulative investment plans.
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A pump and drop point follow four stages, including token prognosis, promotional hype building at launch, price pumping through purchase action, and coordinated sell-off by the coordinator.
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You can protect yourself from pumping by avoiding investment advice from your ideas, being skeptical of social media advertising, and avoiding a promise of unrealistic returns for a short period of time.
Coordinated pumping programs have tangled up with the Web3 ecosystem and cryptocurrency markets for years. Often described as the Wild West of the digital world, the charm of fast-profits has always attracted those who want to manipulate their investments at the expense of others who believe in unrealistic commitments.
With regulations constantly catching up, coupled with industry decentralized design, these plans often receive attention from law enforcement. Nevertheless, recent efforts show Web3 No longer impermeable to regulators. For example, in October 2024, the “Token Mirror” operation result It was confiscated out of $25 million and 18 people were collected.
In this article, you will learn about “pumping plans” including their definitions, how they operate, and how to protect yourself from these complex manipulation strategies.
What are the pumping and point drop schemes in Web3?
one Pumping Solution It refers to intentional manipulation Cryptocurrency or Blockchain The price of the asset. The market price of these digital assets is achieved through coordinated purchases and misleading information.
Once the plan leader reaches the required price, they initiate a violent sell-off to make a profit. This has caused all other investors to sit on severely depreciated or worthless tokens. The phrase refers to the process of “raising” the token price and then “dumping” the token and price at the same time. Since these assets are usually of little value, prices never recover and innocent investors get stuck.
Why do pump and point drop schemes work in Web3?
peer to peer Web3’s Decentralized Design 3 Make it a fertile foundation for this type of market manipulation. Typically, token creators and project developers hide behind anonymity in the internet and use privacy-centric communication channels (such as Telegram). This makes it difficult for investors and authorities to hold Shemers responsible for their deception.
In addition, there is no specific regulatory oversight or circuit breaker market available for 24/7. In the pump. 1 million tokens are launched in 2024 This problem is further exacerbated.
did you know? Insiders in the pumping program regularly make more than 100% net profit, and in the highest case, more than 2,000% in one incident.
How Web3 works in Web3
Web3 pumping and lowering plans tend to follow four phases: pre-issue, start, pump and dump.
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Pre-start: To get started, the hype is built around new value or relatively low tokens. This is done using strategies like pre-sales and community building on platforms like Telegram, Discord, and X.
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emission: Promotions have taken a new level, often including promoters such as unsuspecting influencers to expand awareness and attract more excited investors.
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Pump: Misleading or fake news spreads through the community to achieve a significant rise or business partnership. As people invest more and more people as they drive demand for roofs, this is the market price of the token.
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Pour: When the price manipulation of Web3 tokens reaches profitable levels of orchestrators, they sell their shares in large quantities. The huge sell-off has greatly outpaced demand and declined. The remaining investors holding the tokens almost completely eliminate the token value before they can be sold.
did you know? Some coins can be targeted by repeated pumping attacks. According to a study by the University of Bristol, the most attacked coins are Target 98 times in four years.
Stay safe and discover pump plans in cryptocurrency
It can be difficult to distinguish Web3 trading manipulation strategies from enthusiastic and legitimate investment opportunities. Receiving early potential rewards in the next large legal crypto token provides perfect cover for illegally dispersed pumps and point-down operators.
Here is the way to detect potential fraud and coordinate encrypted pump sets:
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Avoid unknown investment advice: If a stranger contacts you on social media or messaging apps and quickly turns a conversation into a “definite thing” investment, then stay alert. It is best to be cautious and not participate.
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Encrypted social media ads: The social media platform has Troubled by investment advertising, these ads promise high returns. They may look like legitimate companies and even use fake media to deceive investors. Be especially wary of celebrities who seem to be promoting Web3 projects. Often, manipulators create deep effects that are well-known names without their permission or support.
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Do your own research: Don’t get caught up in pressure on investment opportunities because of the opportunity to invest “now or never”. always Take some time to research the project. You should know about founders, developers, records and company information. If this is obscure or insufficient, it is best to avoid investing.
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Expand risk: In a short period of time, be vigilant about high-yield investment commitments. Of course, don’t put most of your money into any investment; instead, when crypto market manipulation in Web3, your funds diversify to spread risks and rescue losses on any wrong investment.
This article does not contain investment advice or advice. Every investment and trading move involves risks and readers should conduct their own research when making decisions.
