If you are experienced within the cryptocurrency industry, you must have heard of crypto shilling. Crypto shilling is the act of promoting or advertising a currency.
On social media, you will normally see influencers and their followers openly supporting a currency online. They will say something along the lines of "this is the best coin ever, invest now!". This is a very common example of crypto shilling.
The aim of the crypto shilling is simple: to lure as many people into investing in a currency, as many as possible, to raise the price of the currency. This can end well for some and end badly for others. If you don't want things to end badly for you, you need to do your research.
Why is Crypto Shilling Important?
Firstly, we will discuss why the crypto shilling exists in the first place. When a new currency emerges, the shilling must take place to spread awareness of the project and attract people to invest. This comes in the form of advertisement and building a community through social media. Some crypto companies may even hire professional shilling companies to help them promote their coins and get them going. Without awareness and excitement, a new currency may never take off, and the price will never increase. That is why shilling is important.
Methods of Shilling
Apart from the usual advertisement and online promotions, a lot of crypto shilling is done by popular influencers and "industry experts". This creates trust and good word-of-mouth.
Often you will see an influencer talking a lot about a project every day. They will say why this project is massive, and why you should invest in it. This means that they endorse the project, invested in the project, and want the price to increase. It is also possible that the influencer is paid as well. Despite all of this shilling, you should be aware that not every influencer is an expert, they can make mistakes, and follow them at your own risk.
Every aspiring new crypto project will have an early investor. These can often be seen on their website and they will try to make it as obvious as possible. Normally, these investors will be some industry experts, large investment funds, or famous business people. Showing off these investors will help shill the currency by generating trust and letting people know that this project is already up and going.
The Team Members
To look like a real and convincing crypto project, you must also have team members consisting of experts! Having team members of high-profile coders, lawyers, consultants, and marketers can make the project look very reliable and destined for great things. If any of the team members were a part of a successful project before, it will show even more promise.
DYOR - Do Your Own Research
Crypto shilling is not necessarily bad or good because there are good projects as well as bad projects. What's important is that you are conscious of what you are doing and invest only what you can afford to lose. Also, don't forget to do your due diligence and research extensively about a project before investing a large amount of money in it.
There are plenty of projects in the crypto world (or most of the projects), that were created just to make money for the creators. These kinds of projects do not have strong backgrounds so they rely on intense shilling to bring in new investors. Their aim is to create as much FOMO as possible and carry out a "pump and dump". What this means is that they will make people feel as if missing out on a great investment and quickly invest as quickly as possible. As new investors joined, the price will start to increase rapidly until the point where the creators decide to dump all of what they own. If the creators hold the majority of the coin's supply, they will earn a huge profit while making the price drop significantly. If you are an investor and did not sell before the dump, at this point, you have been scammed by the shill and have lost your money.
Pump and dump are very common in crypto and shilling is what helps it happen. Before you invest in any coin, it is very important to research thoroughly the project, the influencers, the investors, and the team members. More often than not, whatever is being shilled, might just all be lies. A major red flag is that if the creator of the coin holds the majority of the supply, it is very likely a pump and dump scheme.
Nevertheless, crypto investors like us learn as we go. You might be able to take advantage of these pumps and dump coins by selling them before the creator decides to dump them. This way, you might not be able to earn the maximum profit, but at least you will get a good amount out of it. Just be sure not to shill the coin to other people because they might lose money if they are not experienced.