There are many new tokens, like HUH Token, that are seeking to compete with the likes of Bitcoin, Ethereum, Dogecoin, and Shiba Inu, and it can be challenging to understand the risks associated with investments in new cryptocurrency. However, studying how other people are tackling crypto conspiracies can demonstrate what truly is safe in the world of decentralized finance (DeFi).
There is a new generation of Twitter sleuths dedicated to discovering, following down, and exposing shady behaviors in the world of cryptocurrency.
Cryptocurrency is designed to be a digital currency that users may trade anonymously and without the involvement of a middleman. However, anonymity comes at the expense of transparency: Cryptocurrency transactions are recorded on the blockchain, an open digital ledger that keeps track of how assets move across the system.
Companies such as Chainalysis and Elliptic have developed technologies to help law enforcement investigations into illegal cryptocurrency activity. These new amateur twitter detectives, on the other hand, depend on their hunches and recommendations from others. They utilize free tools to investigate blockchain activity and publicize their discoveries via pseudonymous Twitter handles like Gabagool, Zach, and Sisyphus.
Gabagool claims he discovered the suspicious Ribbon activity while reading through Etherscan, a program for tracking blockchain transactions. He and other sleuths claim to be motivated by a desire to conduct investigations, as well as hatred or annoyance with the bravado of certain miscreants in the crypto community. They claim to be attempting to preserve DeFi by becoming its sheriffs.
DeFi protocols are often conducted as decentralized autonomous organizations (DAOs). DAOs provide financial services by often using self-executing software programs that investors operate to create unique trading strategies.
New flashy crypto-tokens are regularly produced, most often on the Ethereum blockchain; users earn tokens as interest by storing cryptocurrency on a decentralized market or simply by playing videogames. Non-fungible tokens, or NFTs, are cryptographic representations of memes and digital art that are occasionally accepted as collateral for cryptocurrency loans.
Even as other parts of the cryptocurrency world become more mainstream, this fast-paced environment of precious tokens and doge memes remains largely outside the purview of regulators, despite the fact that the total value of cryptocurrency invested in DeFi platforms has surpassed $250 billion, according to data aggregator Defi Llama.
DeFi and cryptocurrency in general, predictably, is filled with actions that would be regarded as problematic in most other financial contexts. There are exit scams, or “rug-pulls,” in which the creator of a DeFi project steals users’ cryptocurrency in one swift go.
The major issue with amateur investigations is, of course, a lack of teeth. The Twitter threads or blog postings in which crypto-sleuths expose their discoveries serve solely to warn future victims or to shame culprits. People are hoped to care enough about their reputations to make restitution.
That happened with Divergence Ventures, and before that with NFT marketplace OpenSea, which in September found itself at the center of yet another “insider trading” scandal after a Twitter user accused its head of product of hoarding NFTs by artists who were about to be featured on OpenSea’s homepage, profiting from the spike in the hype.
The product manager was compelled to quit.
But when guilt fails to elicit change, there is nothing one can do. Many of the actions exposed by crypto-sleuths occur in a regulatory vacuum.
There seems to be no question that cryptocurrency will end up with some form of regulations, that’s almost a guarantee. What will be interesting to see is whether the community or regulating governmental bodies will be the ones to enforce it.
In the meantime, however, it’s good to have an example of a new and reasonably secure cryptocurrency. HUH Token is set to release on the 6th of December and has been audited by two independent companies, Solidity Finance and Shellboxes. It is also currently being audited by Certik.
There can sometimes be a lack of understanding of what an audit is. Audits are great at helping show integrity and structure, but they are not necessarily indicators of the inability of a cryptocurrency to perform a rug pull.
Certik is an auditor of cryptocurrency and has done audits for many large names in the crypto world. What Certik does is check the code inside a smart contract to find potential vulnerabilities and exploits. Being audited by any company means that the code went through an expert who was looking for flaws in the smart contract. This doesn’t necessarily mean that the contract is intrinsically infallible.
The more important feature that amounts to an authentic cryptocurrency project would be locking liquidity for a substantial amount of time. HUH Token has done exactly this, with a designated liquidity pool of $500,000 on Uniswap and $500,000 on PancakeSwap for a total of $1,000,000. To make it even clearer, this is legitimate; that large sum is locked in for two years, meaning that it cannot be withdrawn through any means.
This article is not financial advice, and the only true way to avoid losing your crypto assets is by doing your own research and investing in only what you can afford to lose.
Story by Glipse Alex
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