Web3 pump-and-dump schemes thrive on hype, anonymity, and unregulated markets; understanding their playbook is key to avoiding costly traps.
Pump-and-dump schemes in Web3 manipulate a cryptocurrency’s price through coordinated buying along with misleading information and hype to lure investors in before a mass selling of a token, leaving it almost worthless.
Decentralized anonymity and 24/7 unregulated trading make the industry particularly vulnerable to these manipulative investment schemes.
A pump-and-dump follows four stages, including the token prelaunch, promotional hype building at launch, price pumping through buying action and a coordinated sell-off by orchestrators running off with profits.
