Isn't Time Ripe for a Scam on Steem?

It's beyond any doubt that the launch of Steem Engine and SCOT bot driven tokenomics and platforms have been the biggest game changer on Steem Blockchain in recent times.

The smart contract capability of Steem Engine tokens reminds me that of ERC-20 tokens during 2017 that led to a flood of ICOs. With the advent of ease of creation of tokens, also came a lot of shit as well as scam projects that were eyeing for easy public money.

Thankfully a prolonged bear market helped weed out several shitty and scam projects. The era of ICOs too passed away. In came STOs and IEOs.

But with the launch of SE token system on Steem blockchain, token creation became damn cheap. Today, with as low as 25 bucks to spare, anybody with zero coding knowledge can have her own token created and listed on Steem Engine. Add to it a few hundred bucks more and you can get several additional functionalities including staking feature and its own Nitrous instance.

Not only this, Steem Engine platform also gives access to a ready community of Steemians created by Steem over a period of three years. This makes it very easy to sell off those tokens to this large community with Steem holdings.

In past few weeks I have observed that community members are excited to purchase any new token launched over Steem Engine platform. All it needs is a post on Steemit detailing its intention, a rough road map and some kind of White Paper. Many tokens don't even have such details but are doing well in terms of sales and volumes. Although most tokens have a backing of old and reputed Steemians, many tokens are issued by individuals or from a fairly new account with hardly any SP in its wallet.

I see projects start with paying 100 STEEM upfront for token creation and start selling them to generate further funds for paying additional fee in form of ENG for adding additional functionalities to that token. With the support from Steem community, they are able to raise sufficient money within no time.

I see this trend akin to what happened during ICO phase. Just writing a white paper and bringing few well-known advisers on board could raise millions from the crypto market. This created a good opportunity for scammers' entry.

On Steem too, I see it's currently a good opportunity for scammers.

Do you really take any precautions to evaluate a new project? Or do you just buy in as the whole community or your friends are buying that token?

I myself am baffled with several projects. Surprisingly, not many projects write about the credentials of their team members. Project road map is also very unclear and it takes concrete shape only after some funds are raised.

I don't know why did I buy UFM (UpFundMe) tokens and its miners when there is not much clarity about this project. Perhaps, I fell for their discounted rates and rewards on offer. But I was hesitant to put larger sum into it and just gambled a little. I hope it should give a good return to me at least :)

Just like others, I also keep receiving several airdropped tokens. For the start, it seems to be free money but I don't like to keep small amount of tokens. It's difficult for me to keep track of a large number of tokens and I'd like to consolidate my holdings in a limited number of tokens only. So they either needs to be sold off or I purchase some more of those. Mostly it's the later one.

But there is always a limitation to one's wallet. New tokens and platforms are being introduced every other day. So finally, you need to pick best out of them.

This is where it gets difficult.

Sometimes, we underestimate some tokens. E.g. just like other 16,000 Steemians, I too received 1 STEEMSPEAK token as a free airdrop. I tried to find out about it but failed to get any information. The only website link available in the token information section leads to its Discord Server. Why would I join a Discord server to just get some information about a token. But it seems this token is actually for promoting their Discord server!

Therefore, I chose to get rid of it. The market prices were very volatile. Prices declined from about 9 STEEM per token to about 1 STEEM per token. I could see it another airdrop dump and I put my token for sale for only 3 STEEM. Some how prices climbed up back in a day and my token was liquidated. But today I see that token selling for 25 STEEM per token with a whopping market cap of over $3.6 billion! And this without any clarity on the use case of the token!!!

It's only 3 days back a post was published to discuss about the possible use cases of this token.

Generous @ackza keep dropping several token in their Discord through rain or as a reward for staking SteemSpeak tokens. Aside several pegged tokens, rain also include city-specific tokens like SAND or an Asshole token (ASS) with a shameless gif of an ass as its logo! Whatever works, it seems they are getting many new members into their community.

Fortunately, most tokens have the backing of old and established Steemians. But this doesn't mean you should trust every new project being launched here.

I think, this platform is ripe for some scam and it can happen any day soon. So I just want to warn everyone. Please perform your due diligence before you invest your hard-earned STEEM into these projects. I should remind you of scams like Bellyrub Bank and Magic Dice, lest you forget!