Dark side of crypto: 98% of projects listed on Uniswap are scams (study)

A new study has found that almost all crypto projects listed on Uniswap between 2018 and 2021 were malicious and related to scams.

The study titled DO NOT RUG ON ME: ZERO-DIMENSIONAL SCAM DETECTION, was conducted by three researchers; Bruno Mazorra, Victor Adan and Vanesa Daza from the University of Pompeu Fabra and the University of Barcelona.

Could Uniswap Host Fake Projects?

Uniswap 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 transaction volume since its inception.

While Uniswap is the largest DEX in crypto, recent results by researchers show that 98% of all projects listed on the protocol between 2018 and 2021 were rug draws.

carpet zipper 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 the investors’ funds.

The study found that Uniswap’s simplicity and lack of regulation make it a target for malicious actors to effectively 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 18 archive node and Etherscan 19 API for analysis and analysis. labeling.

“To obtain the state of the Uniswap exchange and the tokens, we used the events produced by their respective smart contracts. Any node connected to the Ethereum JSON-RPC API can observe these events and act accordingly. Events can also be indexed so that event history can be viewed later,” the researchers said.

The crypto community reacts

As expected, the latest survey received backlash from the crypto community after it was shared on Twitter by crypto proponent Drnick.

A Twitter user questioned the effectiveness of the survey, noting that the model used to conduct the research required the inclusion of token liquidity/volume.


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