Investing in crypto has its downsides, and this is no exception for rug pulls and NFT marketplaces. Cryptocurrency scams are rampant, and rug pulls accounted for around 40% of all such cases last year. Moreover, the industry is prone to speculation and wash trading, costing investors significant money. But <a href="https://www.cryptoknowmics.com/news/5-most-popular-nfts-that-you-should-know-about">NFTs</a> are far from being the end of this shady business.

A typical Rug Pull is when an NFT project doesn't follow through on pre-mint promises, leaving the holders with nothing but revenue. There are many types of rug pulls, ranging from slow to full-blown scams. A full-blown rug pull is a scam that is planned from the beginning, while a slow pull leaves the community high and satisfied. 

Scammers announced the rug pull on Twitter and accused the <a href="https://www.cryptoknowmics.com/news/magic-eden-is-on-a-mission-to-educate-individuals-to-become-smart-traders">Magic Eden</a> platform of being "cash grabs." They also claimed that the platform ignored three red flags: it didn't carry out an identity check on the scammers, didn't question the accent of the creators, and didn't explain the feasibility of the concept. As a result, Magic Eden suspended the service. In addition, it now requires creators to dox privately to prevent scams and scammers.

<img class="aligncenter" src="https://cdn.publish0x.com/prod/fs/images/1a52473feb540487d1526f64b27d9ece34a183c265d91d9b09ce0764ef8198a1.png" alt="Rug-pull-and-Marketplaces" width="480" height="269" />
<h3>Scams</h3>
If you've recently invested in a Rug Pull, you've probably heard of the scams surrounding them. While most scams are legitimate, a few scam artists are notorious for going under, and one of them has stolen over $2.7 million from the <a href="https://solsea.io/collection/6156336119e68055ae18f0cd">Baller Ape Club</a>. While the scam started out like any other project, the people involved admit that red flags were there throughout the project, but their potential blinded them.

The Rug Pulls scam involves NFT-makers who disappear with the money that they took, causing the investors to lose a significant amount of money. A typical scam involves a large amount of money, such as $160,000, and promises of big profits. The scammers will often fake Twitter followers and chatbots, so beware! These scams tend to target NFT developers, so be wary of anyone promising you money in exchange for your investment.

Another common trait of rug pull scams is low liquidity. When the coin's price is high enough, the founders will sell it for a scam token. This process makes the price go up, which attracts more investors. However, the founders will withdraw the coins after the price rises and leave no liquidity, resulting in the project failing. That's why scam artists are so popular - they can entice people to invest and make a profit from their work.
<h3>Doxxing</h3>
Doxxing means publishing private information on the internet, and a big red flag for scammers is not revealing a person's name. This is one of the ways NFT creators can prove accountability and create a trustworthy environment. Doxxing is a big red flag for scammers, but the good news is that the public can easily find out who is behind an NFT project if it is doxxed.

While doxing was formerly a dirty word in internet culture, it has recently become a common practice. For example, last year, <a href="https://www.buzzfeednews.com/article/katienotopoulos/bored-ape-nft-founder-identity">BuzzFeed News</a> revealed the identities of Bored Ape Yacht Club founders, who went by pseudonyms. The two founders were identified as a team called <a href="https://www.cryptoknowmics.com/news/the-story-behind-yuga-labs-and-apecoin">Yuga Labs</a>, and they have since relaunched their service.
<h2>New Quality Standards For Projects Using The Magic Eden Launchpad</h2>
Recently, a large NFT marketplace on <a href="https://www.cryptoknowmics.com/news/solanas-okay-bears-top-all-ethereum-nft-projects-with-18m-in-sales-in-one-day">Solana</a>, Magic Eden, re-launched its Launchpad service, which allowed NFT creators to drop their collections directly into Solana's marketplace. Unfortunately, this led to the suspension of the service following two high-profile rug pulls. Since then, the marketplace has instituted new safety measures, including requiring creators to dox privately. Also, all projects must hold funds in escrow for at least 24 hours. There is a 14-days escrow extension period. If a project fails to meet these standards, it can be refunded.

As the user community grows, Magic Eden has made several changes to its platform. These improvements lower entry barriers and allow projects to communicate with the Open sea ecosystem. Furthermore, the platform now supports video, audio, and self-shelfing images. This will greatly reduce the threshold for accessing the platform. Moreover, it will not tolerate projects that cause damage to its reputation or its users.

The platform has simplified the minting process for digital assets to simplify the process. The design of the new quality standards is to prevent listing errors and ensure that users receive high-quality NFTs. Furthermore, the platform also offers low transaction fees and is a community activist in the cryptocurrency industry. In the future, users will be able to explore the current NFT landscape. They will also be able to gain insight into emerging trends and NFT project narratives.
<h2>Pastel Network's Open Source Protocols Offer Optimal Protection Against Scams</h2>
The cryptocurrency industry is experiencing a resurgence of nonfungible tokens (NFTs). But with the growth in NFTs comes an increased risk of security, scams, and technical challenges. Pastel Network has built a purpose-built blockchain to help ensure the safety and sustainability of these tokens. Pastel's open-source protocols help mitigate these risks and provide an on-chain solution for NFT storage.

The Pastel Network's protocols utilize deep learning models, algorithms, and statistical techniques to translate NFTs into a fixed list of over 10,000 numbers. In addition, the protocol enables it to determine fingerprint relationships to Web2 databases, and it can integrate with third-party networks using its open API. But the best protection against rug pull scams isn't just from Pastel. The Pastel Network protocol also provides a robust way to protect against rug pull scams.

The ERC-20 standard is a stepping stone toward decentralized finance, but it can also be a trap for unscrupulous actors. Because decentralized exchanges allow listing projects without review, rug pulls are especially common. Moreover, since there is often a quick conceptualization, rug pulls the social media hype, and promises of massive gains can easily dupe an unwary investor.
<h2>Leo Bailey's Dream Of An NFT Marketplace</h2>
The NFT space has seen a huge boom in the past year, and one of the most important aspects of this is the rise of cryptocurrencies. Leo Bailey, a cryptocurrency guru, is behind the development of Paradox, a platform that will sell NFTs. To help him get the project off the ground, he got help from e-commerce and SEO guru Tank Shake. These experts are very knowledgeable in the server architecture and marketing of non-traditional businesses.

The Paradox NFT Marketplace will use a custom analytics system. This way, only a limited number of executives can access the data. A licensed data sanitizing expert will dispose of the viewed data. In addition, the company will release transparency reports and recent disposal certifications. The company aims to create a global NFT marketplace, a first for the cryptocurrency market.

The technology has been evolving, but the core of this innovation is blockchain. NFTs are a technology that helps prove ownership of anything digital. Crypto-art has emerged from cyberspace, with early artists uploading their works to NFT marketplaces. Although creating these works involves little money, the promise of a better world is still there, and they have the chance to sell them for a profit.

Is the End Near For Rug Pulls and NFT Marketplaces?

There’s been quite a bit of chatter lately about how rug pulls are bad and how NFT marketplaces will solve the issue of the rug pull entirely.

Oluwademilade Afolabi is a freelance writer and editor passionate about blockchain technology and the health industry. He is a 6th year medical student, and has worked with various companies and blogs since the blockchain revolution began.

Is the End Near For Rug Pulls and NFT Marketplaces?

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