A new study found that almost all crypto projects listed on Uniswap between 2018 and 2021 were malicious and related to scams.
The study entitled DO NOT RUG ON ME: ZERO-DIMENSIONAL SCAM DETECTION, was carried out by three researchers; Bruno Mazorra, Victor Adan and Vanesa Daza from Pompeu Fabra University and the University of Barcelona.
Could Uniswap be hosting fake projects?
uniswap it was created in 2018 and the protocol describes itself as a growing network of decentralized finance (DeFi) applications.
The DEX has over 40,000 Ethereum (ER20) smart contract compatible tokens hosted on the platform to provide users with options to trade different crypto assets. Over the years, Uniswap has become one of the largest DeFi protocols in the industry, processing over $1 trillion in trading volume since its inception.
While Uniswap is the largest DEX in crypto, recently recommendations by researchers show that 98% of all projects listed in the protocol between 2018 and 2021 were rug pulls.
carpet puller is a popular technique used by scammers to defraud DeFi investors. They develop new projects, create hype and abandon the project while running away with investor funds.
The study found that Uniswap’s simplicity and lack of regulation make it a target for malicious actors to efficiently conduct initial coin offering (ICO) scams by listing worthless tokens on the platform.
The researchers examined 27,588 tokens, of which 631 were classified as non-malicious and 26,957 were identified as malicious. A total of 24,870 tokens labeled as malicious are quick draws, while the remaining 2,087 are non-LP burns.
The result was compiled by generating the history of all tokens listed on the platform from launch to 2021 using an Infura file node 18 and Etherscan API 19 for analysis and labeling.
“To get the status of the Uniswap exchange and the tokens, we use the events produced by their respective smart contracts. Any node connected to the Ethereum JSON-RPC API can observe these events and act accordingly. The events can also be indexed so that the event history can be searched later,” the researchers said.
The crypto community reacts
Unsurprisingly, the latest research received backlash from the crypto community after crypto advocate Drnick shared it on Twitter.
A Twitter user questioned the efficiency of the investigation, noting that the model used to conduct the investigation necessitated the inclusion of token liquidity/volume.
I’m sorry, but that’s very flawed methodology for that claim. They literally took ALL the tokens since 5/20 – 27k total and didn’t bother to filter them by liquidity/volume…nothing.
That’s like saying that 97% of Twitter accounts are fake, but none were active in the last year.
— Maya Zehavi (@mayazi) October 31, 2022
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