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What is crypto shilling?
Shilling is the process or act of using advertisement, with exaggeration and overstatement, to market a certain cryptocurrency or a certain crypto project.
Someone who does such a thing is known as a shiller in crypto lingo. Shilling essentially is done by an influencer or someone who has a vast audience.
In simpler terms, in shilling, an individual succeeds in drawing people’s attention to a crypto project. This is done to have investors pour into the project, leading to a price hike. Shilling in itself is not a trap or a phony pyramid scheme. However, people with influence and power can use it as such.
As the cryptocurrency market has grown from small banners to major TV commercials and advertisements, many crypto projects have begun to use social media influencers to promote and create buzz around their coins.
The main purpose is always to hype up the crypto project and attract investors to it.
How exactly is shilling used in crypto?
As mentioned, shilling is the practice of using one’s influence to artificially generate demand for a crypto project. Different marketing techniques such as video creation, blog posts, news snippers, and paid marketing tactics are used to do the needful. Shilling is also practiced by groups of individuals.
The individuals who choose to go for shilling usually have a certain stake of theirs in the crypto project. By creating demand for the project and having the investors invest in it, they increase the market value of the project, raising the overall value of their own investments.
Shillers usually portray themselves to be objective, least unbiased, and unprejudiced people who choose to promote a crypto project. The end goal is to create a positive image of the project in the minds of the viewers. However, sometimes, the positive image does not reflect the true image.
Recently, media personality Kim Kardashian was under hot waters for shilling a cryptocurrency called EthereumMax to her Instagram viewers. Even Vitalik Buterin responded to this scam and told Bloomberg that Kim’s post was a ‘borderline scam’ and a ‘money grab scheme’. Similarly, actor Matt Damon also did an ad and was under fire for shilling.
Even though traditional financial markets have banned shilling for a long while, the situation is still not clear with cryptocurrencies considering it’s just in its initial stages.
When does shilling become dangerous?
There are multiple ways through which shilling is done. While some of them are usually innocuous, some of them are actually very risky.
1. The infamous pump-and-dump scheme
This is one of the worst tactics used by shillers to sell their coins or have investors invest in a crypto project. In this tactic, a shiller will inflate the price of a project or asset, either sell it to the people or have them invest in the asset as a whole and once the target number of buyers or investors is achieved, the inflated price will plummet to the ground, leaving the buyers and the investors only peanuts in the name of a competitive crypto project/asset.
2. Fake news and rumors
This is yet another dangerous tactic used by shillers. They will portray a cryptocurrency in a way that people feel the FOMO by not buying it. The picture that the shillers create of a cryptocurrency, however, will be riddled with lies and untrue narratives.
3. Using influencers’ influence
This is yet again a dangerous tactic used by shillers. In this case, influencers will be approached and paid to make reels, videos, or stories endorsing a certain cryptocurrency and urging their followers to buy it.
How to identify shillers?
There are multiple ways through which you can identify crypto shillers.
1. They are always on a high horse
Shillers are always on the high horse when it comes to their cryptocurrency or their crypto project. They will use flowery language to talk about their cryptocurrency, pretend to be overtly sweet when dealing with buyers and investors, and will seldom talk about the risks that one may incur by investing or buying the cryptocurrency. A good and honest seller shall always find a balance between the benefits and the risks of a virtual asset or a crypto project.
2. They play with your emotions
Shillers, unlike honest sellers or marketers, will use high-pressure tactics. They will make you believe you are running out of time and that if you don’t invest right away, you will miss out. This will generate a fear of missing out.
3. They hide important information
Shillers will mostly never talk about the people associated with the cryptocurrency, the team, the origins of the currency, the future prospects, etc. Moreover, they will also discourage you from doing your own research.
4. Trust your instincts
The fourth way to identify a shiller is to just trust your instinct. If you feel that you are not getting very good vibes from a certain paid post/video or a person you were approached by, you may safely move away and leave the conversation. Posting about such a crypto project on websites like Reddit and Quora may also give you better ideas.
How to avoid crypto shilling?
There are various ways that you can use to avoid crypto shilling and they are:
1. Don’t buy into the hype
One of the characteristics of crypto shilling is that sellers and marketers hype up their product a lot. They will use paid and unpaid marketing tricks to reach as many people as they can and then try to trap them. Do not fall into it without doing proper background research.
2. One source is not enough
One news source is not enough. It is important that you have multiple authentic sources to update yourself with all that is happening in the crypto world. When you follow multiple news sources, you build an understanding of cryptocurrencies which helps you avoid crypto shilling later on.
3. Anonymous sources can be risky
If you are hearing some cryptocurrency’s name for the first time and don’t have anything to back its authenticity, it is safe to assume that it may not be a good investment opportunity.
Generally, shillers will lie about partnering with such and such renowned web3 companies or organizations. When they do so, it is important to check their website as well and see if they have a press release or anything that confirms their collaboration.
Also know that any crypto project without a whitepaper and a defined roadmap is usually bogus. Don’t fall in that trap. Stay wise and DYOR.
4. Beware of get-rich-quick schemes
Most shillers are not great researchers. Thus, they make, what they desire, their pain point. Shillers want their product/asset/currency to be sold which they will show in multiple ways. If such a situation comes up, try to decipher the words and you will discern that it was indeed crypto shilling.