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Create a crypto project, ideally a premined one, delegated PoS or so with outrageous performance claims. With non-premined PoW coins it is much harder. Ideally
by ls15 4y ago
Create a crypto project, ideally a premined one, delegated PoS or so with outrageous performance claims. With non-premined PoW coins it is much harder. Ideally with a huge supply of tokens. Let's say 100,000,000,000 total supply.
Form a foundation and talk to the media. Sell some at a sub-cent price during multiple ICO rounds, but make sure to keep 70-90% (tokens for team, advisors, runnning costs, token burns, security claims that are baked into the protocol and whatever other reason you can come up with).
Sell some to yourself for free. Use money from the first round to pay for marketing and exchange listing - yes, most projects other than Bitcoin, Ethereum or Monero need to pay to be listed, even though exchanges make money from trading fees. Ideally also run your own exchange, which gives you more creative freedom and may save cost.
Talk to the media again and spam all crypto communities.
Use the tokens that you sold to yourself for wash trading on multiple exchanges. Since you sell to yourself, your main costs are trading fees. Use ICO money for that and for buying some tokens from others.
Market price is the latest price that someone paid for the token. Market capitalization is Market Price x Circulating Supply. Increase market price by wash trading at higher prices, you control the price, since you own the most tokens. Some ICO customers will sell their tokens back to you, but the majority of them will wait for much higher prices.
Spread rumors about possible 1,000% price increases when the token gets adopted by the masses. Some new buyers will obtain some of your tokens as your token is rising on websites like coinmarketcap.com because of the rising market capitalization.
Do more marketing, spread memes and rumors about partnerships with FAANGs and governments, as well as potential 10,000% price increases.
Monitor the price. Wash trade higher. Monitor price and order books. Once the price is high enough, start to sell more to other buyers. When the orderbooks are full of other people, dump more and let it cool down afterwards.
Repeat until you are rich enough or until people aren't buying the token anymore.
Exit.
- isitmadeofglass 4y agoYou’d think that this was the way to carry out a typical crypto scam yes. But then we have cases where the shell cracks like FTX and we can see inside and it turns out the scams are completely devoid of any sophistication. FTT wasn’t a clever pump’n’dump scheme, it was just straight up not backed because user funds where working to cover Alamedas leveraged positions.
- ls15 4y ago> the scams are completely devoid of any sophistication Some scams, sure, but those really baffle me. If you are kind of smart and you know that you are scamming people and these people know who you are, while you are in a country that prosecutes scammers, I would think that at the very least, you'd want some plausible deniability in the form of "We tried our best, but our goals were too ambitious and unfortunately the market decided against us". I suspect that many other scams tried to construct this form of plausible deniability. The Bitconnect scam for example was pretty straight-forward, but these guys at least were smart enough to be anonymous when they forwent plausible deniability.
- prottog 4y ago> Market capitalization is Market Price x Circulating Supply. It was always very strange to me that this is the case, even for more respectable financial instruments like stocks. I get that it's an easily-calculated number, and maybe that's why it's so popular; but even for the world's most liquid instruments, like shares of AAPL, for example, it's an imaginary number, since nobody can buy or sell all of AAPL for that total amount. At the very least, I would like to see some sort of liquidity-adjusted market cap.