Wanna make a Scam Coin? I sure hope not but this article is showcasing how easy, cheap and seamless making a Pump & Dump Altcoin can be. Such blatant misrepresentations are easier to avoid once one understands the elementary tactics behind their ¨launch¨.
Coin market cap vs circulating supply is the first thing to take into account when researching any new token. Always remember that market caps can be easily manipulated….or “created” out of thin air. With low early active volume and circulating supply…a few thousand bucks can send a market cap TO THE MOON (at least temporarily). Shiba Inu (SHIB) and Kusama (KSM) have a similar $3.3 Billion market cap as I write this article in June 2021…but their stock price is drastically different. This is because there is a circulating SHIB supply of 394,796,000,000,000 vs KSM´s supply of 8,470,098 tokens. KSM token currently trades around $400 while SHIB sits at $.00000914. Ponder this; what’s heavier: a pound of feathers or a pound of bricks?
Pump and Dump scammers come in all shapes, nationalities and sizes and step 1 is to figure out a clever coin name. At least 37 Altcoins have the word ‘safe’ attached to them. The 2018 ICO craze created similar examples of this mayhem with the most ironic one being Block Broker. It was founded in a bid to “completely eliminate ICO fraud by creating a 100% safe investment environment.” The Blockbroker founders ran off with over $3,000,000. These types of brazen crypto heists have now transformed into Shit Coin Pump & Dumps.
Now back to the swindle. What is the all in cost to create a new shit coin including marketing? Typically under $5000. Token creation cost is sub $500 on networks such as Binance Smart Chain, Huobi Eco Chain and the Ethereum network. Binance Smart Chain is the priciest and most popular as it brings the most traffic to peruse through new coins.
The marketing (pumping) of the coin comes next. Certain influencers with a morally flexible sensibility are eager to take $1000 to post a rave review of this new coin to their eager followers.TikTokers are famously underpaid vs other social platforms and can have millions of followers but still need part time jobs to move out of Moms house. Large reach for a low cost. Big Youtube and Twitter personalities have recently shown examples of how many of these shit coin pump requests they get in DMs and emails on a weekly basis. Their pitch often includes broken English and a templated basic sales pitch with an offer attached.
Next comes purchasing Bots to spam relevant Reddit, Twitter, Instagram and Facebook accounts (for under $100) with comments and posts shilling up their ridiculous coin is the next frequent tactic utilized by these crooks.
Cointool.app is a common marketplace used to create these Shit tokens. The site boasts user-friendly tools for creating, distributing, collecting and air dropping tokens that your eight year old nephew could figure out. Coin name, initial supply and market cap are COMPLETELY malleable for the creator. It is possible to create a Trillion token Altcoin similar to Shiba Inu. Once a wallet is connected and startup fees are swapped on Binance Smart Chain, voila….the new Altcoin has been minted.
These shady rackets can be spotted early if a handful of wallets hold the majority of the initial supply. A tactic often used to avoid this is generating several hundred or thousands of batch wallet’s essentially spreading the founders coin supply across so many unique wallets that the coin looks evenly dispersed. After this is completed, inquiring minds will see cleverly dispersed wallets with a reasonably small percentage of total token supply while simultaneously posing the other 999 wallets as new token holders. They create and time the pump, newbie retail investors Hodl the dump.
Once the token is officially created and early supply evenly distributed, setting up a Pancake Swap smart chain for disbursing tokens doesn’t require a computer science degree. The issue now is creating false volume to generate interest and raise the market cap as quickly as possible. To solve this conundrum, a few of the founder’s 1000 wallets will buy and sell (swap) the same token over and over and over and over. Thus creating volume and peaking retail interest.
While this volume is building they are spending the rest of their ad budget “promoting” their shit coin through various social media channels. See the Reddit channel Crypto Moon Shots for endless examples of this. Crypto Moon Shots does introduce some solid coins now and then but just read the comment sections on any of the DD (due diligence) reports posted to gain a better understanding of how many paid bots are out there pumping coins.
To finalize credibility with uninformed newbie investors, a website is built for well under $100. This simple website will showcase how to buy the token while highlighting a regurgitated White Paper. Stolen stock photos of an approachable Software Developer with impressive tech credentials will be promising the next 1000x token you don’t want FOMO on. New investors rarely perform a Reverse Google Image Search on founders photos which is such a quick way to see if this shit coin is full of itself.
Always DO DEEP research on any token that is solely traded on Uniswap or Pancake Swap. Coins listed on large exchanges are not exempt from scams but they have gone through extensive vetting by companies that can afford to find the metaphorical dead bodies behind a Scam Coin.
The IRS is apparently launching a large effort currently to go after these pump and dump scammers (where they have jurisdiction) but this will not stop the problem. Only a fraction of these scammers live in or abide by U.S. law. They create and time the pump, newbie retail investors Hodl the dump.
Once they cash out, “Buying lambo now”.