Crypto Scam
Fraudulent schemes in the cryptocurrency space designed to steal users' funds or private keys. Common types include rug pulls (developers abandoning projects), phishing attacks (fake websites mimicking legitimate services), Ponzi schemes (paying existing investors with new investor money), pump-and-dump schemes, fake airdrops, and social engineering attacks impersonating trusted figures.
“In a common phishing scam, users receive an email or ad linking to a fake MetaMask website that looks identical to the real one. When they enter their seed phrase, the scammer gains full access to their wallet.”
Rug Pull
A type of crypto scam where project developers abruptly abandon the project and steal investor funds after attracting significant investment. Common methods include draining liquidity pools, exploiting hidden backdoors in smart contracts, selling a large pre-mined token allocation, or minting unlimited new tokens. Rug pulls are most common with new, unaudited tokens.
DYOR (Do Your Own Research)
The practice of thoroughly investigating a cryptocurrency project before investing, including analyzing its team, technology, tokenomics, competitive landscape, community, and potential risks. DYOR is both a personal responsibility mantra in crypto and a disclaimer often used by influencers to absolve themselves of liability for their recommendations.
Private Key
A secret cryptographic code, typically a 256-bit number, that proves ownership of cryptocurrency and authorizes transactions. The private key is mathematically linked to a public key through elliptic curve cryptography — it can generate the public key, but the public key cannot reverse-derive the private key. Anyone with access to a private key has complete, irrevocable control over the associated funds.
Seed Phrase (Recovery Phrase)
A series of 12 to 24 words, generated following the BIP-39 standard, that serves as the master backup for a cryptocurrency wallet. The seed phrase deterministically derives all private keys and addresses in a wallet, meaning anyone with the phrase can fully restore the wallet on any compatible device. Losing the seed phrase means permanently losing access to the funds.