It appears that the vast majority of the cryptocurrency projects posted to 2018-established Uniswap, were actually scams, according to a recent research. The researchers of University of Pompeu Fabra and Barcelona, Bruno Mazorra, Victor Adan, and Vanesa Daza completed the work titled ‘DO NOT RUG ON ME: ZERO-DIMENSIONAL SCAM DETECTION’.
Though the research is getting negative reactions by experts, it found that among 27,588 tokens, 631 are deemed safe while 26,957 are malicious.
Notably, of the 24,870 tokens with the malicious designation, 2,087 are not LP burns and the rest are fast pulls, according to the research. Infura archive node 18 and Etherscan API 19 were used to generate the history of all tokens displayed on the platform from launch to 2021, after which the experts labeled them using the Etherscan API.
More than 40,000 tokens that are compatible with Ethereum smart contracts (ER20) are housed on the decentralized exchange, giving users a wide selection of digital currencies to trade. Interestingly, Uniswap has processed more than a trillion dollars’ worth of transactions since its establishment, elevating it to the ranks of the most important DeFi protocols.
Nearly all projects on Uniswap were allegedly scams
Researchers have found that while Uniswap is the largest DEX in crypto, nearly all of the projects posted on the platform between 2018 and 2021 were scams and rug pulls.
Scammers frequently employ the rug-pull tactic to mislead DeFi investors, according to the researchers. They allegedly devise fresh projects, fabricate promotional materials, and then disappear with investor money.
According to the researchers, “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 Ethereum JSON-RPC API can observe these events and act accordingly. Events can also be indexed so that the event history is searchable later.”
Many authorities are forcing a halt over them. In September this year, due to an increase in crypto-related scams, the SEC issued updated guidelines for the promotion of cryptocurrencies. Moreover, legislators in the U.S. have demanded for investigation into cryptocurrency scams many times.
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