Web3 scams have made the blockchain landscape a war zone. On one side is the crypto community, armed with the desire to innovate and redefine the function of money and its technology. On the other side comes swindlers with zero remorse and the determination to gain fast money, hackers and malicious actors steal from unsuspecting investors. The consequence is billions have been lost.
The enigma of Web3 scams
It’s becoming a popular belief that web3 security will worsen before improving. And indeed, it’s evident from stats before 2022, which show an increasing pattern in web3 scams and security breaches. This security turmoil receded in 2023, with the first half reporting barely a third of the first half 2022.
Are things improving? No! Based on CertiK’s report, about 212 security breaches claimed over $313 million in Q2 2023. In early June, highly industrious scammers swindled over 5k Atomic wallet users stealing about $100 million.
When writing this report, a crisis hovers around Multichain which lost $126 million in another breach. The insecurity dilemma discourages the entry of potential investors to web3. This guide unmasks the main crypto scams and how to steer clear.
Phishing attacks
Phishing is among the most widespread web3 scams. In phishing, the attacker preys on humans’ curious nature. The swindlers send decorated messages with web links, fooling the victims into disclosing confidential data. The web links mimic websites of popular networks, with only minute alterations. Consequently, the attacker gains a gateway to bank account details and logins to crypto wallets.
While these web3 scammers mostly leverage emails, other platforms like Twitter inboxes, phone calls, and text messages are emerging as an avenue for phishing attacks.
How to escape phishing attacks
While prevention is better than cure, there is no concrete prevention to phishing. There is very little you can do to avoid the attacks— the attackers will send you messages on Twitter, email, or wherever. But you can escape the attacks. How?
Don’t open suspicious emails and links — these links are the attacker’s backdoor to your network.
Directly type any web links.
Use anti-phishing email security systems.
Avoid clicking on pop-ups.
Use firewall protection— firewall blocks unverifiable outgoing requests.
Don’t add credit card and wallet details on untrusted sites.
Rug pulls
Blockchain’s rapid evolution brought a rise of DeFi, which is now a center for rug pulls. The ability for anyone to create unverified projects, albeit good, has led to billions in losses. It has become one of the most challenging web3 scams as it’s not always easy to spot rug pulls before they happen.
In rug pulls, developers desert a crypto project and steal everything from liquidity pools. What remains in token holders’ wallets are worthless tokens.
Note: The main offenders in rug pulls are project developers.
Builders leave code gaps during project development, creating backdoors to steal funds. Developers hype the project by promoting it via social media channels. multiple web3 scams have been found to be orchestrated this way through out time.
When launched, the project lures millions in investment. Developers then clean the liquidity pools. The Merlin DEX case followed a similar pattern. Soon after the token drew the required attention, the developers stole all the liquidity.
Unlike phishing which lacks outright prevention, rug-pulls can be completely prevented and avoided. How?
Avoid projects with nameless developers.
Avoid projects with zero liquidity locked — Liquidity lockers were born out of necessity to increase confidence in DeFi. If a project has no liquidity locked, it’s not a good idea to invest.
Vastly research on projects promising high yield or tokens with high pumps at launch.
Avoid unaudited projects.
Avoid projects restricting sales.
Pump and dump schemes
The most prevalent scheme in crypto and financial markets is pump and dump. Chainalysis reported earlier this year that 24% of tokens launched in 2022 had pump-and-dump traits. These schemes exploit investors’ fear of missing out on good opportunities.
The attacker fashions some fake ‘insider information.’ Once the news hits social networks, investors swiftly rush to buy the token, causing a price surge.
As tokens peak, the attacker ditches a large volume of their holding, gaining enormously. Consequently, the token dump, coupled with frustrations around the fake revelations, results in plummets.
Mimosa (MIMO), a crypto project born in March 2021, traded at $4. A few days after its birth, MIMO plunged to the sub-dollar price.
How to escape a Pump and Dump
Dodging pump and dump schemes is as easy as one-two-three. Here are a few things you must do;
Don’t make investment decisions based on hype, DYOR. Promotional campaigns create a market craze, exaggerating the project’s potential. Evaluate the legitimacy of the news source.
Analyze the markets before investing. Check the price demeanour, resistance, support, and other key points.
Don’t invest in projects with high buy walls.
Business opportunity scams
Some web3 scams come in the form of mouth-watering business deals. These scammers prey on investors’ ignorance. They make a promise of high-yielding opportunities for some crypto investments. Have you seen an email asking you to invest in a ‘shit’ coin, promising 10x, 100x, or maybe 1000x gains? Well, that’s how business opportunity scams work.
As pointed out, ignorant investors are the most likely victims of such scams. The aftermath of their reluctance to research is blind investments. Consequently, these investors are duped. The simplest elixir to avoiding business opportunity scams is research.
Can you escape web3 scams?
Yes! All crypto and web3 scams bear similarities, the fake promise of high returns. Any approaches promising extremely irrational returns are likely innovative tricks fashioned to scam investors. If the deal sounds too good, it probably is. Keeping off such messages or emails is the best way to avoid scams.
eToro is a popular online trading platform that allows users to buy, sell, and trade various cryptocurrencies, including Bitcoin. Here’s a short but detailed guide on how to buy Bitcoin on eToro:
Step 1: Sign up for an eToro Account
Visit the eToro website and sign up for a new account by providing the required information. Complete the registration process, including verifying your email address.
Step 2: Complete the Account Verification
To comply with regulatory requirements, you’ll need to verify your identity on eToro. Follow the instructions provided on the platform to submit the necessary documents for verification, such as a valid government-issued ID and proof of address.
Step 3: Deposit Funds into Your eToro Account
Once your account is verified, you’ll need to deposit funds to start buying Bitcoin. Click on the “Deposit Funds” button and select your preferred payment method, such as bank transfer, credit/debit card, or e-wallet. Follow the prompts to complete the deposit process.
Step 4: Search for Bitcoin (BTC) on eToro
On the eToro trading platform, use the search bar to find “Bitcoin” or the BTC ticker symbol. Click on the Bitcoin listing to view its details and performance.
Step 5: Place a Buy Order
After selecting Bitcoin, you’ll be taken to the Bitcoin trading page. Click on the “Trade” or “Buy” button to initiate a buy order.
Step 6: Specify the Investment Amount
Enter the amount of Bitcoin you wish to purchase or the amount of funds you want to invest. eToro allows you to buy fractional amounts of Bitcoin, so you can invest as much or as little as you desire.
Step 7: Review and Confirm the Trade
Double-check the details of your trade, including the investment amount, fees, and any additional options. Take a moment to review everything before proceeding. If you’re satisfied, click on the “Open Trade” or “Buy” button to confirm the purchase.
Step 8: Monitor Your Bitcoin Holdings
Once your buy order is executed, you’ll be able to see your Bitcoin holdings in your eToro portfolio. You can track the performance of your investment and sell your Bitcoin whenever you decide.
Important Considerations:
– eToro charges fees for trades and transactions, so be sure to review and understand the fee structure on the platform.
– Cryptocurrency investments, including Bitcoin, can be highly volatile and carry risks. It’s essential to do your own research and understand the potential risks involved.
– Consider utilizing eToro’s additional features like stop-loss orders or take-profit orders to manage your Bitcoin investment effectively if you plan on trading derivatives and other similar options.
Conclusion:
Buying Bitcoin on eToro is a straightforward process. Following this short guide, you can learn how to buy bitcoin on eToro step by step, sign up for an account, deposit funds, search for Bitcoin, and place a buy order. Remember to conduct your own research, be aware of the risks associated with cryptocurrency investments, and make informed decisions based on your investment goals and risk tolerance.
In the world of investing, Exchange-Traded Funds (ETFs) have gained immense popularity as a versatile and accessible investment vehicle. ETFs provide investors with a diverse portfolio of securities, similar to mutual funds, but with the added advantage of being traded on stock exchanges throughout the trading day. In this comprehensive guide, we will explore what ETFs are, how they work, their benefits, risks, and provide step-by-step guidance on how to invest in ETFs.
Understanding Exchange-Traded Funds (ETFs)
Exchange-Traded Funds (ETFs) are investment funds that trade on stock exchanges, similar to individual stocks. ETFs are designed to track the performance of a specific index, sector, commodity, or asset class. Instead of owning individual stocks or bonds, investors own shares in the ETF, which represents a proportional interest in the underlying basket of assets.
Types of Exchange-Traded Funds
ETFs come in various types, each serving different investment objectives:
– Index ETFs: These ETFs aim to replicate the performance of a specific index, such as the S&P 500 or the Nasdaq 100.
– Sector ETFs: Sector-specific ETFs concentrate investments in specific industries like technology, healthcare, or energy.
– Bond ETFs: Bond ETFs provide exposure to a diversified portfolio of bonds, including government, corporate, or municipal bonds.
– Commodity ETFs: These ETFs track the performance of commodities like gold, oil, or agriculture products.
– International ETFs: International ETFs offer exposure to specific countries or regions, allowing investors to diversify their portfolios globally.
Advantages of Investing in ETFs
Exchange-Traded Funds (ETFs) offer several benefits that have contributed to their popularity among investors:
– Diversification: ETFs provide instant diversification by holding a basket of securities, reducing the risk associated with individual stocks.
– Liquidity: As ETFs trade on stock exchanges, they offer intraday liquidity, allowing investors to buy or sell shares at any time during market hours.
– Cost Efficiency: ETFs typically have lower expense ratios compared to mutual funds, making them a cost-effective investment option.
– Transparency: The underlying holdings of ETFs are disclosed daily, enabling investors to have a clear view of what they own.
– Flexibility: ETFs can be bought or sold throughout the trading day at market prices, offering flexibility and control over investment decisions.
– Tax Efficiency: Due to the unique creation and redemption process, ETFs are generally more tax-efficient than mutual funds, potentially minimizing capital gains taxes.
Risks Associated with Investing in Exchange-Traded Funds (ETFs)
While Exchange-Traded Funds (ETFs) have numerous advantages, it’s essential to be aware of the potential risks involved:
– Market Risk: ETFs are subject to market volatility and can experience fluctuations in value based on the performance of the underlying assets.
– Tracking Error: Some ETFs may not precisely replicate the performance of their underlying index, resulting in a tracking error.
– Liquidity Risk: Although ETFs are generally liquid, certain niche or less-traded ETFs may have lower liquidity, potentially leading to wider bid-ask spreads.
– Sector Concentration Risk: Sector-specific ETFs may be exposed to the risks associated with a particular industry, making them more vulnerable to economic or regulatory changes in that sector.
How to Invest in ETFs: A Step-by-Step Guide
Investing in ETFs is a straightforward process. Follow these steps to get started:
– Step 1: Determine Your Investment Objective: Define your investment goals, risk tolerance, and time horizon to select the most suitable ETFs for your portfolio.
– Step 2: Research
Different ETFs: Conduct thorough research to understand the types of ETFs available, their underlying assets, expense ratios, historical performance, and any specific investment strategies or objectives.
– Step 3: Select an Online Brokerage Account: Choose a reputable online brokerage that offers access to a wide range of ETFs and provides competitive trading fees and account services.
– Step 4: Open and Fund Your Account: Follow the instructions provided by the brokerage to open an investment account. Deposit funds into the account to have capital available for investing.
– Step 5: Choose Specific ETFs: Based on your research, select the ETFs that align with your investment goals and strategies. Consider factors such as diversification, expense ratios, and historical performance.
– Step 6: Place an Order: Log in to your brokerage account, navigate to the trading platform, and enter the ticker symbol of the ETF you want to purchase. Specify the number of shares or the dollar amount you wish to invest.
– Step 7: Review and Confirm: Double-check the details of your order, including the price, quantity, and any applicable fees. Once satisfied, confirm the purchase.
– Step 8: Monitor and Manage Your Investments: Regularly review the performance of your ETF investments and make adjustments if necessary. Stay informed about any changes in the underlying assets or market conditions that may impact your investments.
Conclusion
Exchange-Traded Funds (ETFs) have revolutionized the investment landscape, offering individuals the opportunity to access diversified portfolios, enjoy liquidity, and benefit from cost-effective investment vehicles. As an investor, understanding the fundamentals of ETFs, including their types, advantages, and risks, is crucial for making informed investment decisions.
By following the step-by-step guide outlined in this comprehensive article, individuals can confidently navigate the process of investing in exchange-traded funds (ETFs). However, it’s essential to conduct thorough research, evaluate one’s investment objectives, and seek advice from financial professionals when necessary.
ETFs provide a flexible and accessible way to diversify investments, build a balanced portfolio, and achieve long-term financial goals. With careful consideration and informed decision-making, investors can harness the potential benefits of ETFs and participate in the ever-evolving world of investment opportunities.
In the realm of investments, money market funds provide a safe and stable option for individuals and institutions seeking low-risk and short-term investment opportunities. Money market funds are a type of mutual fund that invests in short-term debt securities, aiming to preserve capital while providing modest returns. In this article, we will delve into the world of money market funds, exploring their purpose, features, benefits, risks, and how they fit into an investment portfolio.
Understanding Money Market Funds
Money market funds are investment vehicles that pool money from various investors and allocate it primarily to short-term, high-quality debt instruments such as Treasury bills, commercial paper, certificates of deposit (CDs), and repurchase agreements. These funds strive to maintain a stable net asset value (NAV) of $1 per share, making them an attractive choice for individuals seeking stability and liquidity.
Objectives and Features of Money Market Funds
The primary objective of money market funds is to provide investors with a safe place to park their cash while earning a competitive yield. Key features of money market funds include:
Liquidity: Money market funds allow investors to quickly and easily convert their shares into cash, typically offering daily liquidity.
Low Volatility: Due to their short-term nature and high-quality holdings, money market funds aim to minimize price fluctuations and provide a stable investment option.
Diversification: Money market funds spread investments across multiple issuers and securities, reducing the impact of individual defaults.
Benefits of Money Market Funds
Money market funds offer several advantages to investors, including:
Preservation of Capital: Money market funds focus on capital preservation, making them suitable for individuals with a low tolerance for risk.
Stability: The stable NAV of money market funds ensures that investors’ principal remains intact, allowing for greater peace of mind.
Competitive Yields: While money market funds are not designed to generate high returns, they typically offer higher yields than traditional savings accounts or checking accounts.
Convenience: Investors can access their funds easily, usually through check writing, electronic transfers, or redemption directly to their bank accounts.
Risks Associated with Money Market Funds
While money market funds are generally considered safe investments, it’s important to understand the potential risks involved, including:
Credit Risk: Although money market funds invest in high-quality debt securities, there is still a small possibility of default by the issuers.
Interest Rate Risk: Fluctuations in interest rates can impact the yield and returns of money market funds. When interest rates rise, yields on new investments increase, potentially leading to lower returns for existing investments.
Liquidity Risk: In times of market stress, there may be a lack of buyers for certain securities held by money market funds, which can affect their ability to maintain liquidity.
Incorporating Money Market Funds into an Investment Portfolio
Money market funds can play a vital role in an investment portfolio, serving as a cash management tool or providing a temporary parking spot for funds. Here are some considerations:
Emergency Funds: Money market funds offer a secure and easily accessible place to hold emergency funds, providing stability and liquidity when needed.
Short-Term Goals: For individuals saving for short-term goals, such as a down payment on a house or a vacation, money market funds can be a suitable option, providing a balance between the preservation of capital and earning modest returns.
Portfolio Stabilization: Money market funds can act as a stabilizing force in a portfolio, helping to mitigate the volatility of riskier investments such as stocks or bonds.
Conclusion
Money market funds offer a low-risk investment option with a focus on capital preservation and liquidity. They can be used for short-term investment in times of highly volatile or investor-unfriendly markets. However, they also have their limitations. Do your own research and figure out how to maximise your profitability and keep risks down. Keep watching Fintech Express for more comprehensive guides like this one.
In today’s interconnected world, social media platforms play a significant role in keeping us connected with our friends and loved ones. Instagram, one of the leading social media platforms, has introduced a new app called Threads. Threads is designed to offer a more private and intimate space for sharing moments with your close friends. In this article, we will provide you with a step-by-step guide on how to download and use Threads to enhance your Instagram experience.
Step 1: Downloading Threads
To get started with Threads, follow these steps:
1. Open the App Store (for iOS devices) or the Google Play Store (for Android devices) on your smartphone.
2. In the search bar, type “Threads from Instagram” and tap the search icon.
3. Locate the Threads app and tap on it.
4. Tap the “Install” button (for Android) or the “Get” button (for iOS) to download and install the app on your device.
Step 2: Logging In
Once you have successfully downloaded Threads, you need to log in using your Instagram account. Follow these steps:
1. Open the the app on your device.
2. Tap the “Get Started” button.
3. You will be prompted to log in using your Instagram account. Enter your Instagram username and password.
4. Tap the “Log in” button.
Step 3: Setting Up
After logging in, you can set up Threads according to your preferences:
1. Choose how you want the app to access your camera and microphone. You can allow access for photo and video capturing or select “Don’t Allow” if you prefer to use existing media files.
2. Grant or deny notifications based on your preference.
3. Customize your app settings such as dark mode, data usage, and more.
Step 4: Creating a Close Friends List
Meta’s new app focuses on sharing with your close friends on Instagram. To create your close friends’ list:
1. Tap on the “Create a Close Friends List” button.
2. You will see a list of your Instagram followers. Tap on the “+” icon next to the names of friends you want to add to your close friends’ list.
3. Once you have selected all your close friends, tap on the “Done” button.
Step 5: Navigating Threads
Meta’s new app offers a simple and intuitive interface. Here’s a brief overview of the key features:
1. Home button Tap the home icon to get an interface where other users’ posts are shown.
2. Search bar: The search icon leads to a page with a search bar and suggested accounts to follow. The search bar can give you results based on user accounts that are most likely to post it just like Instagram.
3. Threads button: Threads button allows you to write new content to post on the platform.
4. Likes: The likes icon leads you to a page that allows you to see what users have replied to you, mentioned and all interactions with verified user accounts.
5. Profile/ Settings: This icon leads you to a page where you can customize your settings and profile how you want. However, alot of the features on the profile are based on Instagram thus you would have to edit them via Instagram.
Keep watching Fintech Express for more guides like this one.
Stablecoins are pegged to a given currency or commodity and usually tag along with its prices; thus should not deviate from the tagged asset’s value.
There are different types of stablecoins depending on their mode of backing.
What are stablecoins?
Stablecoins are cryptocurrencies whose values are always pegged to that of another currency, commodity, or financial instrument. They are an alternative to the high volatility of other cryptocurrencies and fiat currencies, which may be hard to use digitally.
As such, stablecoins are better to use as a mode of exchange than highly volatile cryptocurrencies. They do not have to be tied to a currency like the U.S. dollar. They can be tied to commodities like gold too.
Types of stablecoins
Stablecoins differ according to the mode of backing. In that way, we currently have three types of stablecoins:
Fiat-collateralized (backed by fiat money or physical commodities)
Crypto collateralized (backed using other cryptocurrencies like BTC and ETH)
Algorithmic (tied to the value of a commodity or a currency using an algorithm that controls how and when coins are burnt or minted to maintain their peg)
Top stablecoins
The market cap of stablecoins exceeds $127 billion, making them an essential part of a current $1T industry. There are many stablecoins in the market, but only a few could have reliability of 80%+. Here are the top six stablecoins by market capitalization
Tether USDT – $83.28B
USD Coin – $28.11B
Dai- $4.6B
Binance USD – $4.49B
True USD – $2.01B
Pax Dollar- $1B
What is Tether USDT?
Tether USDT is the world’s largest stablecoin by market capitalization. It is the most popular among crypto enthusiasts as it has been leveraged for years and pegged to the dollar. Both physical and crypto assets back it. USDT is minted and managed by its parent company, Tether.
What is USD Coin (USDC)
Like Tether USDT, USD Coin(USDC) is pegged to the U.S. Dollar. It is managed by its parent company Centre Consortium. This stablecoin is the world’s second-largest one and brags a liquid backing of 100% cash and cash equivalents.
What is Dai (DAI)
DAI is a dollar-pegged crypto asset on the Ethereum network. It is currently the third largest by market cap but has been crippled by depends severally. This stablecoin brags to be the world’s first decentralized, collateral-backed cryptocurrency. Unlike the USDT and USDC, it is algorithmic and was issued by MakerDAO.
What is Binance USD coin (BUSD)
Binance USD (BUSD) is a fiat-backed crypto asset pegged to the U.S. Dollar and issued by Paxos. It has reserves that are equal to customer deposits and are held in FDIC-insured U.S. Banks. However, it has been under pressure by U.S. regulators to wind up its operations and close for good.
What is True USD (TUSD)
True USD (TUSD) claims to be the first independently verified digital asset that equates to 1:1 for U.S. Dollars. It is a multichain stablecoin that uses traditional banks, escrow accounts, and third-party attestation in its operations to decrease counter-party risks, offer transparency and do away with fraud.
What is Pax Dollar (USDP)
USDP is a USD-pegged digital asset issued by Paxos. Unlike traditional banking, it aims to offer its users the ability to store and send money digitally in U.S. dollars in a free, unrestricted way. It is fully regulated and 100% backed by cash reserves.
Risks associated with stablecoins
There are different risks that are associated with holding stablecoins. Here are the two main ones
De-pegging
Stablecoins are known to lose their peg resulting in huge losses to their users. However, not all of them collapse for good. Some lose their peg momentarily, including the largest ones like Tether USDT.
A Tether USDT de-peg has sent a shockwave across the crypto market as #Curve3Pool seems to be in distress. CTO Ardoino says Tether is ready to buy back any amount as it works to restore the peg. Here is more about the story👇👇#crypto#USDT#Tetherhttps://t.co/U6LulnSRwK
Regulators, at times, are not in favor of assets that could weaken their economies. As such, lawmakers and regulators may rally to bring down all stablecoins pegged to their currencies in fear of the fiat currencies weakening. It has already happened in the U.S., where several lawmakers wanted stablecoins done with, and NYDIC asked Paxos to stop issuing BUSD.
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