Uniswap Listings: The dark side of a decentralized exchange.
Today, decentralized exchanges are very popular and volumes are breaking records every day. This is partly due to the fear that centralized exchanges are under scrutiny from government services due to hacks and the risk of personal data being disclosed.
On the other hand on decentralized exchange users can trade while remaining anonymous but there are disadvantages in the form of high transaction fees that do not allow trading small amounts.
But there is one significant advantage of centralized exchanges over decentralized ones. This is a high pass threshold for a Scam project. In this case, users trust exchanges more and are ready to trade from the first seconds after listing, which is also true for decentralization, but with a terrifying result that we will talk about later.
In turn, decentralized exchanges allow small projects to attract the attention of users through the listing of their tokens with the provision of initial liquidity and attract users to liquidity mining.
What do we end up with?
Some statistics collected by our bot.
About ~200 tokens are listed on Uniswap per day, of which ~190 are fraudulent.
Scammers list the token and provide initial liquidity, users in the hope of buying part of the tokens and after 20 minutes, the liquidity is taken away and users are left with an illiquid token in their pocket. Then the scheme is repeated. According to estimates, about 100 thousand dollars a day go to scammers. But you will say that the users themselves are to blame because they are deliberately taking risks without conducting a preliminary check and you will be right. But scammers don’t stop there. They create websites, collect fake communities, come up with new schemes and tricks, so it becomes very difficult for users to distinguish a fraudulent project. And these numbers continue to grow.
We believe that this is a very big step forward for decentralized exchanges, which opens up a huge space for the development of various projects in the field of decentralization and will spread to more traditional ways of exchanging values. Therefore, we must fight back against attempts to deceive scammers and start building and implementing anti-fraud systems that will help ordinary users safely participate in this movement.
We would like to share one of these solutions with you.
At this stage, this is just a telegram bot that notifies about new listings on Uniswap. In addition to providing detailed information about the new listing, the bot performs an initial analysis of transactions from the blockchain and tries to understand the source of funds for liquidity and whether there are repeated patterns and how the result forms the level of fraud. Data collection and analysis takes about 2 seconds after receiving a listing transaction. As a result, the user receives detailed information about the listing from the first seconds and can see that the project is fraudulent and postpone the purchase, thereby saving their funds.
Take a look at the responses with fraud and legal listings.
But as we noted earlier, scammers do not stand still and find new ways to deceive users.
We, in turn, want to provide users with a powerful tool that will secure work with decentralized exchanges, so we will continue to work in this direction and improve our project.
We look forward to your comments and suggestions about how our bot works.
