With the rise of crypto, it's important to know the ways you might lose your Bitcoin - and know how to avoid it!
At the heart of it, crypto shilling is the advertising and marketing of a crypto project or token by a person with some sort of status or authority. Shilling refers to the active endorsement of a cryptocurrency, whether subtle or outright, to create hype surrounding the project to entice investors to buy tokens.
The end goal of a crypto shill is to attract people to invest in a token and generate a buzz around the project in order to drive the price and the demand of the token. Often from here, the project founders or leading investors pushing the token will sell their shares at higher prices, gaining from the value that investors have added in buying the cryptocurrency. It’s worth noting that crypto shilling and marketing a project are different, with the outcome yielding different results.
Different types of crypto shills
Opportunists, marketers and entrepreneurs
Some shills will see the potential of a project that might be rising slowly in value and will buy it, shill it to attract fresh new investors, and then sell for a profit. They’re looking to pump up the token’s demand – and subsequently value – with new investors and after the token reaches a high enough price, they’ll sell their tokens and leave the project with a profit. The new investors will be left with a devalued token and a project that might not be going anywhere.
Celebrities and influential figures
In the crypto scene, there are certain names that pull a certain influence over the market. With this influence, people in the community will follow the advice without necessarily doing their own research into why the person might be promoting a project. A sign of a crypto shill in this case is when an influential figure in the space suddenly starts punting a token without any sort of rationale behind their promotion.
You also see crypto shills in the form of celebrity marketers who might not have any tech or genuine interest in the market other than the project they are promoting. We’ve seen celebrities start endorsing a project without any previous fin-tech insight or knowledge with the end result being a scam, leading to a loss of investor funds and a lack of trust in their credibility. Often, the celebrity is paid by the project to promote sales and doesn’t have any ties to the project and whether it succeeds or fails.
Project team members and founders
To entice new people to invest in their crypto project, founders and people involved in the team behind the scenes will often punt their project to get attention to the token. Advertising the project and the potential behind it (such as the use-case, functionality, and what it might offer the ecosystem) isn’t a bad thing and isn’t shilling the token – it’s just looking for a way to fund an idea. It becomes a shill when the founder or someone on the team is overselling and over-hyping a project, claiming it will make people massive profits, only with the intention to sell their own tokens later when it’s worth more.
To avoid this kind of crypto shilling, monitor a new project before looking to invest your money into it. This is especially the case if the founder doesn’t have a background in tech, development, or blockchain experience. If they’re promoting only a profitable opportunity without a project that can offer any real use-case, you might be looking at a shill.
Avoiding buying a token because of a crypto shill
Before investing in a new or emerging cryptocurrency project, do your due diligence to make sure you’re not falling prey to the advocacy of a crypto shill. This means doing your own research (DYOR) and getting an objective view on the long-term potential of the project rather than listening to promotional buzz and hyped marketing. Remember: If something sounds too good to be true, it probably is.
Avoid paying too much attention to someone who has only influence, but no background in the scene. If they’re a celebrity advertising a crypto, but have no crypto experience, they are not necessarily the best voice of authority in the space. Go in with care and look at who is on the project team and whether there’s legitimate experience to back the project up.