The dark side of the crypto market: 98% of projects listed on Uniswap are fake projects
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Answer The dark side of the crypto market: 98% of projects listed on Uniswap are fake projects
A new study finds that almost all crypto projects listed on Uniswap between 2018 and 2021 are fraudulent.
The study, titled “Don’t Pull the Rug Under My Feet – Zero-Dimensional Fraud Detection” was conducted by three researchers, namely:
Bruno Mazurra, Victor Adan and Vanessa Daza from Pompeu Fabra University and the University of Barcelona.
Can Uniswap be considered a hotbed of dummy projects?
Uniswap was established in 2018.
Uniswap describes itself as a growing network of Decentralized Finance (DeFi) applications.
Uniswap has over 40,000 Ethereum smart contract (ER20) compliant cryptocurrencies hosted on the platform to provide users with options to trade various crypto assets.Read:Ethereum mining revenue is up 60% this month
Over the years, Uniswap has become one of the most important DeFi protocols in the industry, handling over $1 trillion in trading volume since its inception.
While Uniswap is the largest DEX in the crypto market, recent findings by researchers show that 98% of all projects included in the protocol between 2018 and 2021 were rug pulls.
Pulling the rug is a common tactic used by scammers to defraud DeFi investors.
Scammers develop new projects, and make a marketing hype around them, after getting the users’ money they abandon the project and run away with the investors’ money.
The study found that Uniswap’s simplicity and lack of regulation made the platform a target for malicious actors to efficiently conduct Initial Coin Offering (ICO) scams by inserting fraudulent digital tokens on the platform.
The researchers scanned 27,588 coins, of which 631 were classified as harmless and 26,957 were identified as harmful.
A total of 24,870 codes have been classified as malicious and operate with a rug-pull mechanism.
The result was compiled by creating a history of all tokens listed on the platform from launch through 2021 using the Infura 18 archive node and the Etherscan 19 API for analysis and tagging.Read:Two brothers arrested in Israel for hacking Bitfinex in 2016
The interaction of the crypto community with the results of the study:
As expected, the investigation received a backlash from the crypto community after the results of the study were shared on Twitter by crypto supporter Drnick.
One Twitter user questioned the efficacy of the investigation and study, stating that the model used to conduct the research needed to include cryptocurrency liquidity/volume.
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