UKey hardware wallet can help you protect private key and assets, but it cannot replace your judgment on projects, links, messages and investment opportunities. In an Web3 environment, some risks come from project packaging, social bootstrapping, and market hype. This article will introduce several common types of Web3 scam and explain what should be paid attention to before participating in the project or purchasing token.

In Web3, anyone can create a project and start selling token. Many projects have not undergone business background checks and lack unified regulatory processes and industry codes of conduct.

At the same time, blockchain transactions are usually irreversible, and there is no centralized organization that can help you undo wrong operations. If you transfer funds to the wrong address, participate in fake project, or purchase high-risk token with insufficient information, it is often difficult to recover the funds. Therefore, it’s important to understand common tricks and learn to identify risks ahead of time.

Pump and Dump is not a technique unique to the cryptocurrency world, it is almost as old as the trading market.

When a product, project, or business idea is "sold" hard, the person behind it may be creating buzz for their own benefit. For example, they may claim that a project is a “once-in-a-lifetime opportunity” or reiterate that “it’s too late to buy now” to make it sound like an investment you can’t miss. In reality, such opportunities may not be reliable, and those who really profit are often those who plan ahead and promote the popularity.

The cryptocurrency market is highly open and anyone can launch a project and attract funds, which is one of the reasons why fake project appears frequently.

Promotion of cryptocurrency projects can come in many forms.

The common goal of these practices is to generate enough attention to get people who lack information to invest money.

Even if the popularity is not large, it may significantly affect the market. The more people buy, the higher the demand for token, the easier it is to push the price up, and the more the project looks like it is "becoming valuable."

Fake cryptocurrency projects are not necessarily easy to identify. The other party usually does not directly say "This token will definitely skyrocket, please invest all your funds." More often than not, risk signals are hidden in exaggerated promises, vague information, and over-marketing.

Influencers in the cryptocurrency space don’t just exist on Instagram. influencer, community opinion leaders, and even celebrities may publicly support a project.

But these endorsements are not necessarily completely transparent. The other party may have charged a promotion fee, or may already hold the relevant token, and hopes to drive more people to buy through public support. In either case, such recommendations are not necessarily neutral judgments or necessarily in your interests.

Something to remember: ask why first. If a public figure has almost never paid attention to the crypto market before, but suddenly recommends a certain project frequently, you should first determine whether he has his own profit motive.

It’s natural for project teams to want their cryptocurrency projects to succeed, especially if they hold a large amount of token or stake. Therefore, they tend to actively promote projects to attract attention and funding.

But also realize that the team has a direct financial relationship with the success or failure of the project, so their statements may not be completely objective.

One thing to remember: do your own research. If the team claims that the project will create significant value, cross-check these claims with independent sources of information such as roadmaps, white papers, on-chain data, and Etherscan.

The Rug Pull is one of the common highs in the crypto world.

The word means something like "pulling the rug out from under your feet." In the cryptocurrency scene, it usually refers to an fake project selling token or NFT and promising a bright future.

As more and more people buy in, demand rises, the price of token is pushed up, and the project looks increasingly valuable. But the problem is that the project may not have a real delivery plan from the beginning, and the creator is just taking advantage of the market popularity to attract funds.

As investors continue to invest funds, demand and the price of token may rise simultaneously. At this point, the project creator or founder may sell his position and profit from the higher price driven by public interest and buying behavior.

If the project creators had no plan to deliver on their promises, they could simply disappear after selling their holdings. The remaining investors can only hold a project token whose value has dropped significantly and has even been suspended.

A frequently discussed case is SushiSwap’s (SUSHI) early exit scheme. After the project's rapid price rise, with anonymous founder Chef Nomi cashing out $14 million, the price of SUSHI fell from over $9 to just over $1 in less than a week. Chef Nomi later returned the funds after community backlash. Many Rug Pulls end up in a similar mess.

In short, the open nature of Web3 means that almost anyone can make almost any claim. Even if your private key has been properly protected by UKey, you still need to carefully evaluate the authenticity of the project, team background, funding flow and potential conflicts of interest before participating in the project.

Before anyone convinces you to invest in a project, no matter how enthusiastic they sound, it is recommended to complete the following checks: