The era of "picking up money" has passed. Is it increasingly difficult for retail investors to make money through cryptography?

Have you encountered any Rug Pull projects in the past year? Have you ever encountered "buying is the best" due to the advocacy of KOLs who call for orders? Or suffer losses caused by increasingly rampant phishing attacks? Or have you bought a newly launched Token on a top platform and then it has been falling all the way?

It is estimated that many users feel sad and suffer from at least one type of scenario. It can be said that this should be a reflection of the investment experience and true state of mind of most ordinary investors in the past period: whether it is on-chain security issues or asset shrinkage Problems are difficult to prevent for users. Many pitfalls that were common in the past have even begun to be industrialized. To put it more unpleasantly, almost even the "leek roots" have been uprooted.

This article will take stock of the pitfalls that have become more and more common in the encryption world recently, and for ordinary users, are there still opportunities to make money and dividends in the encryption industry?

"Fancy ways to lose money" for ordinary users

1) Industrialization trend of Rug Pull

First of all, the Rug Pull schemes are becoming more and more advanced, and the most outrageous one is the ZKasino incident:

On April 20, some community users discovered through comparison of the Wayback Machine history page that ZKasino changed the "Ethereum will be returned and can be bridged" (Ethereum will be returned and can be bridged) in the Bridge funds of its official website Bridge interface. back at this point.) Delete one sentence.

At the same time, community users were unable to withdraw money. ZKasino’s official Telegram was banned by the administrator, and social media stopped updating. The total amount of money withdrawn was more than 20 million US dollars.

But what’s interesting is that just a month ago in March, ZKasino had just officially announced that it had completed Series A financing at a valuation of US$350 million. The specific amount was not disclosed, but there were multiple trading platforms and VCs participating...

In addition, zkSync, which is nicknamed the "Rug chain", not only frequently encounters ecological project security incidents, but also has an increasingly obvious industrialization trend of exploiting hot spots and completing harvest quickly, just like the zkSync ecosystem with the same name as Merlin not long ago. A Rug Pull occurred in DEX Merlin, affecting millions of dollars in funds.

I can only emphasize once again that the current many projects in the zkSync ecosystem are indeed uneven. Everyone must remain vigilant and guard against risks at all levels while participating in the zkSync ecosystem.

2) Increasingly rampant hacking/phishing attacks

One of the most eye-catching recent cases in the field of on-chain security is undoubtedly the "phishing attack with the same first and last numbers" that everyone seems to have become accustomed to:

A certain whale address was attacked by an address with the same first and last numbers, resulting in a loss of 1,155 WBTC, amounting to more than 400 million yuan! Although the hacker later chose to return the funds due to various factors, he still revealed the extremely high risk-benefit ratio of this kind of phishing behavior: "If you don't open for three years, you will be affected for a lifetime if you open."

Moreover, similar phishing attacks have become industrialized in the past six months - hackers often generate a large number of on-chain addresses with different first and last numbers as a preliminary seed library. Once a fund transfer occurs between an address and the outside world, they will immediately pass through the seed Curry found the address with the same first and last numbers, then called the contract to make a related transfer, casting a net in the sky and waiting for harvest.

Because some users sometimes directly copy the target address in the transaction record and only check the first and last digits, and thus fall victim to the attack, according to SlowMist founder Yu Xian, for phishing attacks on the first and last digits, "hackers are just casting their nets." Attack, take the bait if you wish, a game of probability.”

This is just a microcosm of the increasingly rampant hacker attacks. For ordinary users, in the colorful on-chain world, tangible and intangible risks have increased almost exponentially, but personal risk prevention awareness is still very low. Hard to keep up.

In general, there are currently endless forms of attacks on the chain, wallets, and DeFi, and even social engineering attacks are popular, making DeFi security risks like an asymmetrical one-way hunt: for technical geniuses, it is undoubtedly a win-win situation. There are endless free cash machines, but for most ordinary users, they are more like a sword of Damocles that will fall at some point. While staying vigilant and not casually participating in authorization, there are more It's also luck.

And so far, C-side risks such as phishing and social engineering attacks are the most common ways for ordinary users to lose funds in Web3, and due to the additional risk points of smart contracts, the problem is becoming increasingly serious.

Behind every successful scam, a user will stop using Web3, and the Web3 ecosystem will have nowhere to go without any new users. This is also one of the most harmful points to the encryption industry.

3) KOL fancy orders

For most ordinary users, following the social media orders of various crypto KOLs is an important source of obtaining Alpha passwords.

This also gave rise to the so-called "KOL Round" - as a role with greater influence on secondary market investors, KOL can even obtain a shorter unlocking period and lower valuation discount than institutional VC:

For example, Monad Labs recently completed a new round of financing at a large valuation of US$3 billion, and people familiar with the matter said that some industry KOLs were allowed to invest at a limit of one-fifth of Paradigm's valuation.

So by following the KOL to place orders, can you really guarantee a guaranteed profit without losing any money? According to a study by Harvard University and other researchers on the return performance related to crypto assets mentioned in approximately 36,000 tweets released by 180 of the most famous crypto social media influencers (KOL), covering more than 1,600 tokens, the conclusion is that A satisfying conclusion:

When a KOL posts a tweet to order a certain Token, the average one-day (two-day) return rate is 1.83% (1.57%). For crypto projects outside the top 100 market capitalization, the return rate after one day of ordering is 3.86%, and the income starts to increase significantly at the earliest. The drop came five days after the tweet, with the average return from days two to five being -1.02%, indicating that more than half of the initial gains were wiped out within five trading days.

4) VC Token keeps falling after it goes online

A VC Token with a high FDV (Fully Diluted Valuation) and low circulation, or a Memecoin that is completely “homeless” and is responsible for its own profits and losses, which one would you choose?

Recently, the trend of the market has begun to change, and the trend of Meme has suddenly emerged, boosting the extreme prosperity of Solana and Base on-chain transactions. Just like PEPE, which has secured its position as the leader of the new Memecoin, it has reached a record high. In fact, in today's market environment, apart from short-term speculation, the general public's call for fairness represented behind Meme has gradually become a trend, and funds are voting with their feet.

Corresponding to this, after a series of recent listings on top platforms, VCs with extremely high FDV and falling trends are typical representatives of them, such as AEVO, REZ and even BN Megadrop’s first project BounceBit’s Token BB, etc. Almost every VC since its listing. Every day ended with a negative line, and all users who entered the market were deeply trapped.

In contrast, discussions and doubts about Memecoin and VC will inevitably become the mainstream of the community again. Meme at least still has user flows that bring continuous incremental funds and attention, and in recent times, Memecoin has been valued at billions of dollars. However, the new projects are all outdated concept products that use the grand narrative or the old gameplay, and will inevitably be disliked by the community. This has also sounded the alarm for VCs and project developers who are accustomed to path dependence.

Where do ordinary players go?

Previously in "Web3 sleepless, the "blooming era" of the encryption world will never end? "It is mentioned in the article, "What we love is not "Flowers", but the era when opportunities were everywhere." I believe many friends in the encryption industry have once thought about it. If we had the opportunity to go back 10 years ago, how would we participate in this wave of the times?

Collect BTC? Be a Miner? Establish another bit continent? Or become an early employee of Binance? There seem to be countless best choices, none more so than the past ten years in the crypto world. It was truly a golden age that pushed the limits of imagination, and also gave birth to waves of industry legends and myths about big names.

In any case, the question of whether to make money or not is an eternal topic in the Web3 world and the lifeline of Web3 development.

When trading platforms, market makers, VCs, project developers, and KOLs all start to make money, but only most ordinary users continue to lose money, it means that the deep-seated structural problems of the entire market have become deformed to a certain extent and are destined not to last long. .

Again, behind every "fancy money-losing trick", there may be a group of users who stop using Web3 products, stay away from VC Tokens, and choose to embrace Memecoins, which are more fair and grassroots. This in itself is money. A form of defiance in voting with your feet.

Before some Web3 ecological applications can truly break through the value closed loop, ordinary users will have "nowhere to go." Of course, this may be a necessary "twisting" for the development of Web3, and the encryption industry is still groping forward.