There's no denying that the fantasy of striking it rich has lured many naive men into the cryptocurrency space. These unsuspecting victims have attracted predators who seek to take advantage of their dreams to get rich quick.

Case in point, an anonymous trader recently admitted in an interview that he has been making roughly $60 thousand dollars per week by simply minting and rugging meme coins on Solana, fueling crypto's already dubious reputation.

The masked man said he uses a tool called DogWifTools to quickly generate Solana meme coins. After attracting enough liquidity, and making it seem like real people are buying the coins, he makes a profit by dumping all the tokens on gullible traders.

This isn't the first time we've seen deceptive practices in the crypto markets. In fact, there was similar fraudulent activity on the Ethereum blockchain during the ICO craze of 2017. However, due to the insanely cheap fees on Solana, the swindling has been taken to the next level.

These scams might make you wonder, should the crypto space be avoided entirely?

Solana's Pros and Cons

Solana innovated upon Ethereum's code base to build a cheaper and more user-friendly blockchain - capable of thousands of transactions per second. Although degen meme coin trading currently makes up the majority of its volume, some legitimate projects have minted their tokens on Solana as well.

For example, several DePIN projects including Helium, Hivemapper, Render, and XNET have migrated their tokens to Solana in order to avoid the lackluster performance and high fees of Ethereum. Advanced decentralized exchanges (DEX) like Jupiter and Raydium have also launched on Solana. Having said that, Solana does have some weaknesses.

Considering that most of its validators have been receiving delegations from the Solana foundation, and that token inflation is being used to subsidize their insanely low fees, we have to question whether or not Solana's model is sustainable long-term, especially since it has been enabling the aforementioned rug pulls.

Free Market Pros & Cons

In crypto there have been catastrophic failures like FTX, Terra/LUNA, and QuadrigaCX, where billions of dollars vanished in the blink of an eye. Every day there are rug pulls, causing small-fish traders/investors to lose money.

It's important to realize that dealing with scammers and grifters is an inevitable aspect of any free market, and we shouldn't let a single negative experience cause us to unfairly generalize an entire industry.

Although crypto is an unregulated marketplace where fraud is possible, it also means that creativity and industriousness are unrestricted, enabling the development of some truly innovative products and services.

Another silver lining to the potential for scams is that traders and investors are challenged to improve their critical thinking skills, and learn to allocate their capital more thoughtfully.

Ultimately, generalizing the entire crypto sector as fraudulent is either ignorant or disingenuous. We should acknowledge that the industry is complex and nuanced, and navigating it successfully requires a combination of open-mindedness and careful scrutiny.

How To Avoid Scams

Fresh meme coins on Solana are probably the riskiest bet you can make in crypto, and they should be left to only to the most degenerate of degens. Why not venture into other areas of crypto that have more honorable intentions?

Look for interviews with project founders to see if they genuinely care about enabling economic freedom for the masses, or are disrupting corrupted areas of TradFi. In a previous post we covered several aspects of a crypto project you should consider before making an investment.

Some OGs would advise you stick to only Bitcoin, which is arguably one of the most trustless crypto projects. While that strategy may work for investors who have a low-risk profile, you will most certainly miss out on a lot of interesting innovations and opportunities if you go that route.

In a previous article we talked about the importance of economic activity on blockchains. Considering that TradFi is on thin ice, we need viable alternatives that can enable commercial operations the same way that fiat currencies did in the past.

If you learned something new from this article, be sure to check out my other posts on crypto and finance here on the HIVE blockchain. You can also follow me on InLeo for more frequent updates.

Until next time... stay safe out there ;)

Resources

"Dump All" Image From X Video [1]
Image Generation Courtesy Of Venice AI [2]