How To Avoid Rugpulls: Lessons From Cosmos (ATOM) And Market Sentiment

How to avoid RugPulls: Cosmos Lessons (Atom) and Market Feeling

The cryptocurrency world is constantly evolving, with new projects emerging every day. One of the most significant risks associated with investment in cryptocurrencies is RugPulling, a phenomenon in which a project token is stolen or missing without any apparent reason. In this article, we will explore how to avoid RugPulps and obtain valuable information about the market feeling of two remarkable examples: Cosmos (Atom) and their recent struggles.

Rugpulls: What are they?

A RugPULL is a type of Ponzi scheme, where a project team or investors are funds in an attempt to cover up losses rather than actually providing value to users. This can lead to millions, if not billions, of dollars in cryptocurrency.

Cosmos (Atom): a lesson in the feeling of the market

In 2019, Cosmos, a decentralized network of independent blockchain platforms and open source, suffered a devastating rock that ended with more than $ 2 billion in value. The native project token, Atom, was one of the most popular and widely used currencies in the market.

To understand why this happens, we need to analyze the feeling of marketing around the cosmos at its height. At the height of Hype, the price of Atom fired from $ 15 to over $ 90, attracting millions of investors. The native token of the project was being aggressively negotiated by whales and retail investors, with generally multimylons prices.

However, under the surface, the underlying infrastructure of cosmos was rapidly deteriorating. The team had a lot of control of their treasure, leading to a liquidity lock to investors and users. In addition, there was concerns about scalability, usability and general viability of the project.

Why did the cosmos (Atom) experience a serious rugpuls?

There are severe reasons why the cosmos market gave an unexpected turn:

• Tokenomics: The token was released with a focus on utility rather than liquidity, leading to an inflated price.

• Lack of governance: The lack of responsibility and transparency of the team allowed them to mislead their funds and address losses.

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Cosmos Lessons (Atom)

Although the history of the cosmos is a warning tale, it also provides valuable lessons:

• Invest wisely:

  

  Be cautious when investing in cryptocurrencies with high growth rates or unproven tokenomics.

• Liquidity Materials: Make sure you have enough liquidity to take advantage of market fluctuations.

• Governance is crucial: Structural governance structures are essential for control and transparency headline.

Market of feelings: a warning tale

The feeling of marketing around the cosmos (Atom) during your peak is a striking reminder of the risks associated with investment in cryptocurrencies:

• High expectations: Hype around the atom led to unrealistic price goals, which were disproportionate.

• Overseas Marketing Confidence: Whales and retail investors have become excessively dependent on marketing campaigns and social media influencers, ignoring fundamental analysis.

• Lack of diversification: The market has increased polarized, with many investors trapped in token or specific projects without considering the broader context in the market.

Avoiding RugPulls: A Cryptocurrency Guide

To avoid RugPulls, follow these best practices:

• Perform complete research: Understand the history, team and project technology before investing.

• Find out of the fundamental analysis:

  Evaluate a project based on its underlying foundations rather than relying on hype or marketing campaigns.

• Diversify your portfolio: Spread your investments in multiple projects and tokens to minimize risk.

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