themorningcrypto

    Uniswap Tokens Are 97% "Rug Pulls" - Crypto Twitter is Uncertain, Reportedly.

    TheMorningCrypto Desk
    TheMorningCrypto Desk
    Published on November 3, 2022 8:32 AM

    Updated on January 25, 2023 6:58 PM

    'Rug' is a Twitter exit fraud, reportedly.
    Uniswap Tokens Are 97% "Rug Pulls" - Crypto Twitter is Uncertain, Reportedly.

    According to a team of researchers, 97.7% of the tokens introduced on the decentralised cryptocurrency market Uniswap ended up being scams, and Crypto Twitter has some opinions on this. According to a new report, the researchers claim to have added transaction data from 20,000 additional tokens, manually evaluated the data, and built machine learning algorithms that can "identify possible rug pulls before they occur" with 99% accuracy.

    Earlier, it was said that these researchers aimed to advance the results of a 2021 study, which employed a machine learning system to examine transaction data and identify Uniswap tokens that turned out to be fake. However, that system was only able to spot questionable tokens after the frauds had already occurred.

    Rug pulls made a substantial amount of the $2 billion total taken in 2020, according to a 2021 CipherTrace report, before bridge chain attacks became a $2 billion concern.

    Instead, it's typical in decentralised finance for tokens to incorporate liquidity vaults as a guarantee that developers won't be able to withdraw investor funds from a smart contract once they have been invested. The researchers note that "90% of tokens employing locking contracts likely to become a rug pull or a malicious token ultimately," so it's hardly a guarantee against being conned.

    Only 631 of the almost 27,000 tokens examined were determined to be "non-malicious." The researchers gathered transaction data for all tokens listed on Uniswap V2 between April 5, 2020, and September 3, 2021, using the Infura archive node and the Etherscan API.

    Scott Lewis, a co-founder of DeFi Pulse, voiced some criticism, claiming that the researchers—or at least Almond in his 12-word explanation of their 21-page draft—had overused the term "rug pull."

    Many of the tokens on Uniswap, according to him, were "low effort/low income phishing schemes, where the token tried to seem like an established token," and the same con artist could easily produce hundreds of them.

    'Rug' is an exit fraud and wasn't 97.7% of the tokens on Uniswap, " he stated in a tweet.