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Do not rug on me: Zero-dimensional Scam Detection
- churchill 4y agoFor reference, Uniswap is a cryptocurrency exchange which uses a decentralized network protocol. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts.
- sureglymop 4y agoWould you mind explaining that in even simpler terms?
- themihai 4y agoIt's an exchange developed on Ethereum platform. Basically what FTX is but without a central authority. You may wonder why people don't use Uniswap instead of FTX, Binance etc. The answer is the same reason crypto payments failed: high transaction fees.
- zeroclip 4y agoPeople do use Uniswap. It handles similar volume per day as Coinbase. Transaction fees are one reason. Speed and account UX is another. L2 development is on track to solve some of these problems.
- ailef 4y agoUniswap lets you exchange your cryptocurrency for another one without any centralized architecture (it's not an exchange like Binance).
- edf13 4y agoIt lets you swap token A for token B. The price is auto calculated based on reserves of A vs B…. Swap more of A for B and A becomes cheaper
- boppo1 4y agoImagine you want to trade your gold for silver. You literally possess the physical gold. FTX/centralized exchange: deposit your gold, counterparty deposits silver. FTX possesses the physical quantities and gives you both receipts. You agree to you exchange rate and FTX issues new receipts for what you hold, old receipts are void. You can use the new receipt to withdraw your gold and silver[0]. Uniswap: You take the amount of gold you want to trade to a building. You get to the building and exchange your physical gold for physical silver directly. You leave with your physical silver. You spent a little gold on the way to afford gasoline for the trip. These are technically inaccurate but give an overall correct idea of the difference. [0]most crypto users don't understand how to possess their own crypto (control private keys) so they skip the last step and leave the 'gold/silver' (crypto) in the physical custody of the exchange.
- mudrockbestgirl 4y agoSure, because anyone can create and list a token on Uniswap. The only cost are the gas fees. That doesn't mean those tokens have any real liquidity or are being used. Just like anyone can create a website and put it online. The only cost are the hosting fees. That doesn't mean it'll get any visitors.
- eli 4y agoYet 97% of websites will not steal your money.
- lb4r 4y ago97% of emails probably will though.
- piva00 4y agoPeople don't usually trade emails for money though.
- lb4r 4y agoOf course not, but the point is that the lower the barrier to entry is, the greater the scammer-to-non-scammer ratio will be, as long as money is involved, or could be involved, either directly or indirectly.
- 40four 4y agoThe point is that an unsuspecting/ naive user of malicious emails will be tricked into giving away their personal or banking info. Or sending money to “renew their car warranty” and what have you. I don’t see how that’s any different that an unsuspecting/ native user rushing head first into some random scam coin they have no business paying for and getting rugged. Some people are stupid. That will always be the case. And there will always be dirtbags trying to take advantage of them. That’s a part of life. Has nothing to do with the underlying technology of crypto.
- 4y ago
- neals 4y ago100% of my drawings are not real 'art'. Come on, what is this?
- rroot 4y agoAre they scam?
- onlyrealcuzzo 4y agoWhat constitutes a scam? I'm about as much of an NFT hater as you can be. But people spend money on lots of "dumb" stuff. So why is an NFT a scam if Pokemon cards aren't? Both of them are artificially scarce. Both of them are mainly about buying cute pictures. And at least for a lot of the buyers, it's about speculating the price will go up in the future.
- nathanaldensr 4y agoWho says Pokemon cards aren't? ;)
- dannyw 4y agoNot a lot of people spend 10k or 100k on pokemon cards. Quantity matters.
- williamcotton 4y agoThere’s a decent quantity of people who buy cases upon cases of collectible cards and sell the singles online.
- RuggedPineapple 4y agoI strongly suspect that number is smaller then imagined. Like, a non-ironic use of the 'There are dozens of us!' line from Arrested Development.
- williamcotton 4y agoIt’s probably a lot bigger than outsider’s would imagine: https://www.tcgplayer.com/ https://www.tcgplayer.com/
- cableshaft 4y agoYou've been living under a rock and missed the Pokemon card craze in the past few years then. "Target stores around the country have pre-sunrise lines around the block, and the trading card sections look like bread aisles before a snowstorm or toilet paper aisles at the start of the COVID-19 pandemic as fans, collectors, and resellers are trying to arbitrage tins of Pokémon cards that can be resold for an easy profit."[1] "The intense demand for Pokémon trading cards, which steadily rose in recent years then rocketed up even more during the pandemic, has caused Target to temporarily suspend sales of the cards, citing a threat to the safety of customers and workers."[2] "You can probably guess what happened next. Thanks to the increased visibility of card collecting on social media, along with a surge in grading services pricing out high-value collectibles, folks are practically camping out of stores just to get the latest Pokémon card shipment. Everyone wants to find a rare card that they can flip for thousands of dollars, just like they’ve seen in the news."[3] "YouTuber Logan Paul (USA) has recently acquired a coveted PSA Grade 10 Pikachu Illustrator card following a record-breaking trade worth $5,275,000 (£3,862,424 / €4,477,146)."[4] [1]: https://www.vice.com/en/article/7kv9dd/target-is-prepared-to-call-the-cops-on-frantic-pokemon-card-hunters https://www.vice.com/en/article/7kv9dd/target-is-prepared-to... [2]: https://www.nytimes.com/2021/05/14/business/pokemon-cards-target.html https://www.nytimes.com/2021/05/14/business/pokemon-cards-ta... [3]: https://www.nytimes.com/2021/05/14/business/pokemon-cards-target.html https://www.nytimes.com/2021/05/14/business/pokemon-cards-ta... [4]: https://www.guinnessworldrecords.com/news/2022/4/logan-paul-owns-5-275-million-pokemon-card-after-record-breaking-trade-697189 https://www.guinnessworldrecords.com/news/2022/4/logan-paul-...
- qeternity 4y ago…so far Of the remaining tokens it’s likely that a large portion will rug in the future.
- m00dy 4y agoso to be speak, Uniswap is the greatest invention of the humankind. It cuts the middle man, regulators, anyone calls himself accredited. The more beautiful thing is that you just need an elementary math to understand how the pricing works.
- themihai 4y agoLast time I've checked it was unusuable due the high trading fees. In theory it's great but in reality it's not really working.
- Sargos 4y agoAs of this writing it is $2.39 to perform a swap on Ethereum Uniswap which isn't great but not too bad when compared to something like Coinbase. On L2s it's around 10 cents which I think most people would agree is acceptable. Fees from https://l2fees.info/ https://l2fees.info/
- cypress66 4y agoJust a reminder that L2s aren't decentralized yet, so don't put any serious money in L2s.
- themihai 4y agoI think it's less important how high are the fees right now. The fact tomorrow the fees could increase to $1000 makes the system unreliable for long term investments. The crypto payments for example had few real chances to become mainstrean but their limitations(high transaction fees, high congestion, low throughput) proved they are not practical.
- m00dy 4y agowell, trading fee is/was around 0.25%. So it is pretty much okay. I think you meant gas fees. That's fine, you can look for alternatives for that. I think as of now, every chain has uniswap equivalent. (So, running a dex is a profitable business). The only difference is that amount of liqudity and chain properties.( like security vs).
- nvr219 4y agoDuh.
- breck 4y agoI’m curious to hear more about the other 2.3%
- m00dy 4y agoWBTC is a 1:1 pegged token that you can trade on uniswap.
- zeroclip 4y agoBit higher than expected but not that surprising. Deploying a new token costs almost nothing, but may lead to outsized rewards for scammer. It can be easily automated. Reminder that 85%+ of all email sent is spam.
- cush 4y agoThat's a fun stat. We're 6x less likely to be spammed by opening a random email than scammed by investing in a random token on Uni.
- menzoic 4y agoThis paper has less credibility than the tokens they talk about. The definition of scam as they defined if "underperforming"
- mumblemumble 4y agoThey defined it as a sudden and complete disappearance of the coin's liquidity. And they defend this as being indicative of a rug pull because it's pretty much definitional: a rug pull is when only one entity is propping up a coin's market in order to make it seem viable, and then suddenly disappears, taking all the liquidity with them. That liquidity is the very "rug" being pulled. They suggest that this doesn't look like an organic collapse because it happens all at once, in a coordinated manner. I don't have the expertise to evaluate that claim, but it at least seems plausible. What seems more problematic to me is that I'm not convinced that all of these events can be considered malicious. I would think that me just dicking around on the blockchain looks the same. Maybe I try making a coin, realize getting it off the ground is not going to be worth the effort or otherwise lose interest, and then abandon the project even before it really sells much. If so, then what percentage of these coins can be explained that way? Quite a large one, I'm guessing. Perhaps there's another argument to be made, though, that that is not a good defense of the health/safety of the market for general consumers. Lots of coins that nobody should be touching because they aren't serious perhaps doesn't look much different from lots of legitimate scams from a consumer perspective. Either way, the story for consumers is a rather rigid formulation of "caveat emptor".
- MrMan 4y agohear hear curiously
- Sargos 4y agoIt's important to note that Uniswap is decentralized and anyone can "list" anything for trading without asking anyone or going through any process. This means there are thousands of tokens, probably millions in the future, available to trade. Users do not see these tokens unless they actively search them out. Uniswap uses the TokenList standard (https://tokenlists.org/ https://tokenlists.org/) and by default users only see tokens such as the top 100 projects on CoinGecko. There are many lists created by reputable players such as Aave and Gemini which cover the entire gamut of projects users want to trade without exposing end users to scam tokens. I believe this is a good system and has worked well as having any kind of listing process or even a DAO introduces subjectivity and provides points of capture for bad actors. With an open listing process and standards like TokenLists we can say that Uniswap is truly a public good and will be around as long as we need it which provides a guaranteed way to swap any asset for any other asset no matter who created it or how controversial it is which is a good primitive for humanity to be able to rely on.
- platz 4y agodo you dispute the OP title claim?
- Sargos 4y agoWhy would I dispute it? At best the title is misleading though as most readers likely aren't aware of how Uniswap works and will think "97% of the tokens are scams so Uniswap is unsafe to use" which isn't true in the slightest.
- pyrale 4y agoYeah, people should remember that they have 2.3% chance of not getting scammed on uniswap. That's the definition of safe to use.
- Sargos 4y agoMisconceptions like yours are why the title is misleading. If you go to Uniswap right now you will not see any of these tokens and have a near 0% chance of being scammed.
- ElfinTrousers 4y agoI assume in most of the remaining 2.3%, the founders of the coin unexpectedly died before being able to pull the rug.
- churchill 4y agoCrypto is pitched as a decentralized alternative to central bank currencies. Which, I think, is a great idea, especially with CBDCs (which are really going to be the catalyst for fascism on steroids, especially in quasi-democracies) on the horizon. My biggest problem with crypto is that most people who buy and hold it are not truly libertarians looking to scale up usability in the space. They're really just gamblers who want their investment to go to $1M per bitcoin so they can convert to fiat (the irony) and retire to the Bahamas and life the big life. Otherwise, why does the entire industry keep banging on about $100K EOY? And I won't begrudge you that, after all, it's your money, isn't it? But until crypto makes a hard pivot from being a speculative investment to an ecosystem encouraging day-to-dy usage, I just don't believe it has any long-term usage. In addition, I think Zuckerberg had an extremely brilliant idea when he wanted to make a stablecoin tied to a basket of currencies - it's be stable enough to use on a day-to-day basis, and it'd still be a crypto, at least theoretically.
- wildrhythms 4y agoWhat makes you believe the 'true libertarians looking to scale up usability' are not also gamblers?
- ElfinTrousers 4y agoBecause when a smart guy like the OP does it, it's not a gamble, it's investing.
- churchill 4y agoI never said that. Theoretically, every investment is a gamble in a sense. After all, we've seen high-flying companies crash and burn overnight. FTX is not the first, nor will it be the last. Even high-fliers like Apple were quite close to collapsing sometime in the past, yet people still poured money into them. The only difference is that they focused on shipping products people actually wanted to buy. All I'm saying is that the gambling should be backed up by a significant amount of work aimed at usability, call it a high signal-to-noise ratio, if you will.
- mensetmanusman 4y agoThis Office skit: https://youtu.be/lC5lsemxaJo https://youtu.be/lC5lsemxaJo
- lvass 4y agoThere's a lot of reasons to dislike cryptocurrencies but the fact you can manually paste an address to the uniswap interface and trade a well-performing token to a poor-performing one (the definition of scam used here) is definitely not one of them.
- k__ 4y agoYes. It's a bit like saying most startups go belly-up in the first years, so we shouldn't do startups anymore.
- scotty79 4y agoIf you are investor and keep your money maybe you shouldn't do startups. It's completely valid answer and chosen more prevalently when the times come that encourage you to tighten your belt.
- adamgordonbell 4y agoUniswap seems like on of the few actual bits of blockchain innovation. A distributed exchange is very cool. Prevents things like FTX in theory right?
- zeroclip 4y agoYes. Uniswap and Aave user deposits are not affected by FTX meltdown and withdrawals cannot be paused by a single company.
- miohtama 4y agoSome comments: While the report findings might be correct on the number, the terminology and conclusion in related discussion are often not. No real person ever traded these 26k tokens. The creation of liquidity pool should not be considered a launch, as you still somehow need to convince other people to buy it from you. Nothing was "launched". These trading pairs are more akin to spam, to show up in the search results (somewhere else, do not show up on Uniswap). Other research find the scam volume is way less than 1% of the total trading volume. Only looking this number does not reflect the true health of the market or the controls Uniswap has in place to prevent trading these tokens. We also do not call fake Viagram advertising email rug pull, even if it is clearly intended to steal your money without making your dick hard.
- mritchie712 4y agospam email is a good analogy. Email would suck if you needed some central authority to grant you permission to send. spam filters work on email and will get better for crypto.
- ceejayoz 4y ago> Email would suck if you needed some central authority to grant you permission to send. You do. If Gmail, Yahoo, or Microsoft block your sends, you might as well give up sending email.
- mritchie712 4y agoright, but you don't need permission to start and you earn or lose your reputation based on your actions. it's the same with uniswap. you can list without permission, but you won't have any credibility unless your actions build them.
- DavidFerris 4y ago> "However, the algorithm is only valuable for detecting scams accurately after they have been executed." Forgive me, but isn't it only useful to detect scams before they happen?
- ethanbond 4y agoIt’s more useful, sure. But it’s certainly still useful to know historical information.
- Msw242 4y ago97.7% of tokens launched in Uniswap were scams or rug pulls so far
- im3w1l 4y agoTo me this illustrates an entirely different point nicely. The danger of index investing, or perhaps the imporance of picking a well-curated index. Otherwise you can be taken to the cleaners by scammers wash-trading piles of dirt.
- fareesh 4y ago97.7% of products don't work as advertised either
- the_gastropod 4y agoAnd also the other 2.3%
- churchill 4y agoAnd they could have gone for a better title: don't rug me bro.
- brianolson 4y agoI’d probably like to charitably interpret some of these ‘no real value’ tokens as “debugging” or “dry-run” or some other kind of harmless experiment. They didn’t measure how much value was stolen by rug-pull maneuvers. Did 10,000 ‘fake’ tokens start up, run a while, and rug-pull taking $1 with them? I’d guess that’s just ‘debugging’. Did a few big rug pulls run away with a million dollars? Can we detect _those_ better?
- carrja99 4y agoThe future of finance
- 40four 4y agoThis title should be changed. It is heavily editorialized. It’s not what the paper is about. It is just causing the typical crypto haters to get out their pitch forks. This article is about fraud detection. The conversation should really be about the machine learning techniques used, and the actual conclusion, which is using those techniques, ” This implies that new malicious tokens can be detected prior to the malicious act,and, on the other hand, tokens supported by a strong project can also detected at an early stage.”
- cush 4y agoThe title is in the conclusion of the paper. Yes, they built a fraud detection system... and with it discovered that 97.7% of tokens were rug pulls "Based on this theoretical foundation, we provided a methodology to find rug pulls that had already been executed. Not surprisingly, we found that more than the 97,7% of the tokens labelled were rug pulls."
- 40four 4y agoI understand, but it isn’t the conclusion. I read it obviously, the sentence I quoted is in the conclusion as well. The title is spurring the same old boring “crypo bad/ crypto good” arguments we’ve been over 1000 times. We should be talking about the techniques described in the paper, and the fact that they determined it is possible to detect early on with some confidence if a project is solid, or a scam. This should be a positive for the “crypto bad” folks if you ask me. But this is getting lost.