Shilling, also known as pumping, is a tactic used in the world of cryptocurrency where individuals or groups attempt to artificially inflate the price of a particular coin or token. In this post, we will explore what shilling is, how it is done, and why it is harmful to both individual investors and the broader crypto ecosystem. We will also discuss ways to protect yourself from falling victim to shilling schemes. We will also discuss when shilling isn’t bad and how it can be used as part of a Web3 marketing strategy.
What is Shilling in Crypto?
Shilling, also known as pumping, is a tactic used in the world of cryptocurrency where individuals or groups attempt to artificially inflate the price of a particular coin or token through promotion and positive messaging. This is typically done with the goal of profiting from the resulting price increase.
Shilling can take many forms, including making false or exaggerated claims about a coin’s potential, spreading misinformation or disinformation, and using social media to generate hype and buzz around a coin. In some cases, shillers may even pay others to promote the coin, either through paid advertisements or by offering rewards for positive reviews and posts.
Why is Shilling Crypto Bad?
While shilling may be tempting for those looking to make a quick profit from the volatile world of cryptocurrency, it is ultimately a form of market manipulation that can harm both individual investors and the broader crypto ecosystem. Inflated prices can lead to a sudden crash when the truth about a coin’s value is revealed, leaving investors with significant losses.
Furthermore, shilling can erode trust in the crypto market as a whole, making it harder for legitimate projects to gain traction and hindering the adoption of cryptocurrency as a viable form of currency.
For these reasons, it is important for investors to be aware of shilling and to approach any claims about a coin’s potential with skepticism. Conducting thorough research and getting multiple perspectives on a coin can help protect against the potential pitfalls of shilling.
What are Some Examples of Shilling?
Shilling comes in many forms, with the most popular form being social media promotions. Below is an example of a Kim Kardashian social media post that is shilling Ethereum Max, a scam cryptocurrency. Mrs. Kardashian has since faced legal troubles over this matter:
Below is another example of crypto shilling by a celebrity, Floyd Mayweather. In this example, Mayweather promotes Stox.com’s ICO
Is Shilling Crypto Illegal?
The answer depends on your jurisdiction. In the United States, making false claims or offering unregistered securities can get you in trouble with regulatory authorities resulting in fines or jail time.
Is All Shilling Bad?
Not all shilling is bad. The term shilling often means something different depending on who you ask. Shilling can often times just mean the process of speaking positively about a crypto project en mass. Without making illegitimate claims about the profitability of a coin, shilling can be done with tact. The key to “good” shilling is staying away from misleading your audience.
Some tips to shill properly:
- Never promise a return on investment
- Give your audience the resources to do their own due diligence
- Never lie or misrepresent facts about the product or service you are promoting
Are There Crypto Agencies That Do “Good” Shilling?
Yes, Coinbound is a leading marketing agency in the Web3 industry, with a focus on NFTs, cryptocurrencies, tokens, DeFi platforms, and similar. Coinbound has half a decade of experience helping crypto brands grow via positive and impactful means.
