DESCRIPTION OF EVENTS
"Uniswap is an Ethereum exchange, built using smart contracts and liquidity pools, as opposed to the order book of a traditional centralized exchange (CEX), such as Binance. With any Ethereum wallet, users can simply connect to the Uniswap application and effortlessly exchange ERC20 tokens without first sending them to the exchange platform account."
"[T]he development of Uniswap was facilitated by Vitalik Buterin’s idea for a decentralized exchange (DEX), which would involve an automated market maker. Actually, the protocol developer himself, Hayden Adams, at first tried to just practice development on Solidity, and later this hobby brought him several grants and $100 000 from the Ethereum Foundation. Now the project went far beyond just entertainment and became one of the most important components of the entire DeFi industry."
"[D]ecentralized exchanges are one of the leading DeFi sectors, whose trading volumes exceeded $1.5 billion and reached the all-time high in June. Uniswap and Curve together processed nearly $800 million, which is more than half of the overall monthly volume."
"Since its ‘V2’ overhaul in May, Uniswap has emerged as a cornerstone of the nascent DeFi ecosystem, with data published by Dune Analytics indicating that Uniswap comprises DeFi’s top pool by total users with 92,000."
"Uniswap scams are not a new happening within the crypto space. Uniswap ETH-based decentralized exchange that offers every project a chance to air its views to the world. Notwithstanding, it’s one of the most misused platforms within the DeFi world, with more entities taking advantage of its name and services."
"Scam tokens are a growing problem on the decentralized exchange and liquidity pool Uniswap — owing to the protocol’s open listing policy." "Uniswap, allows users to import any new token simply by pasting its address to the Uniswap’s swap menu."
On July 5th, "1inch.Exchange reported fake coins impersonating their yet-to-be-released native tokens."
"If you are wondering - 1inch token is not out yet. If you see any in the wild - that's likely a scam."
"With any token able to be listed on the platform’s drop-down menu simply by making a GitHub request, the platform’s users are increasingly calling for more stringent vetting to be introduced."
"Uniswap Labs said [July 23rd, 2021] that it was restricting access to dozens of tokens on its trading interface app, including synthetic assets meant to mirror the prices of stock-market giants like Facebook Inc. and Tesla Inc., as well exchange-traded funds such as Invesco’s so-called QQQ that tracks the Nasdaq 100 Index." However, there is no indication of anything done to restrict scam tokens.
"As Uniswap’s protocol is permissionless and both good and bad actors can list tokens through it, you will often see a warning for users to take the initiative in avoiding scammers."
"Rather than searching for tokens or pairs on Uniswap, you can verify you are selecting genuine ones by going via a trusted source, such as the CoinMarketCap or CoinGecko crypto tracking websites. On CoinMarketCap, for example, you can search for the token, select it, then navigate to the trading pairs towards the bottom of the page. If you then click on the relevant pair next to Uniswap, it will take you to the genuine Uniswap page and help you to avoid fake tokens. It also has an option at the top for MetaMask." "Explorers like Etherscan can also be used to check the vital analytics needed to make a more informed decision."
Uniswap allows anyone to list a token. Therefore, there have been a massive number of scams with tokens named similarly to popular tokens. While 1Inch Exchange later got a token, they didn't yet have one at this stage. There was still a reasonable chance someone may have looked for one, and ended up purchasing from a scammer.
HOW COULD THIS HAVE BEEN PREVENTED?
Ensure platform operators are trained to avoid listing fraudulent tokens.
No Title (Aug 3)
@degenspartan Twitter (Aug 3)
How Does Uniswap Work (Jun 5)
Fake Tokens on Uniswap Are Trying to Cash in on DeFi Hype (Sep 10)
Scam Tokens Flooded Decentralized Exchange — DailyCoin (Sep 10)
Uniswap Reports A Surge In Scam Tokens On The Platform Claiming Affiliation To Popular DeFi Projects - Digital Coin Standard (Sep 10)
Uniswap Restricts Fake-Stock Tokens as Regulatory Scrutiny Grows - BNN Bloomberg (Sep 10)
How to Avoid Buying Uniswap DeFi Scams in 2021 | Hacker Noon (Sep 10)
How to Identify and Avoid Uniswap Scams | Alexandria (Sep 10)
@1inch Twitter (Sep 29)
Fake Tokens on Uniswap Are Trying to Cash in on DeFi Hype - YouTube (Oct 11)
Scam Uniswap App Appears on Google Play Store | News | ihodl.com (Mar 1)