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Do not rug on me: Zero-dimensional Scam Detection

arxiv.org

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Re: Do not rug on me: Zero-dimensional Scam Detection

#71

Post by throwup »

platz wrote: post #45
Sargos wrote: post #36

It'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/ ) and by default users only see tokens such as…

do you dispute the OP title claim?

Any system that is open to the public will (sadly) have to deal with bad actors.

85% of all email is spam[1]. But that's not a value judgment on the technology--Humanity can still get value from email.

Sturgeon's law says 90% of everything is crap. If you deal with other humans, you need a way to sift through that crap. In the case of email, that means use a spam filter. In the case of crypto, it means don't buy shitcoins.

[1] https://dataprot.net/statistics/spam-statistics/

Re: Do not rug on me: Zero-dimensional Scam Detection

#72

Post by nuclearnice1 »

onlyrealcuzzo wrote: post #7

What 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.

Indeed a very complex question to answer. One of the most interesting parts of the paper is the discussion of the various types of scam — simple rug pull, sell rug pull, smart contract trap door of various flavors.

From their paper, I think sympathetic to your POV:

> For example, it is not clear that cryptocurrencies such as Doge or Shiba have any use case or intrinsic value, but they are among the most popular meme-coins. In our framework, we say that a token has no intrinsic value or use case if the developer knows that the trading price with respect to USD will eventually be zero. In other words, a tradable malicious token in Uniswap induces a zero-sum game between the users and the developers, i.e. the incentives for the investors are not aligned with those of the token creators. Therefore, the main difference between malicious and non-malicious tokens is the developer’s intentionality towards the token. One of the main problems of these definitions is that it is unfeasible to distinguish between scam tokens and under-performing or abandoned projects without accurate off-chain data.

Re: Do not rug on me: Zero-dimensional Scam Detection

#73

Post by churchill »

ElfinTrousers wrote: post #32
wildrhythms wrote: post #21

Earlier quoted context omitted.

What makes you believe the 'true libertarians looking to scale up usability' are not also gamblers?

Because when a smart guy like the OP does it, it's not a gamble, it's investing.

I 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.

Re: Do not rug on me: Zero-dimensional Scam Detection

#74

Post by Sargos »

kareemsabri wrote: post #61
Sargos wrote: post #50

Earlier quoted context omitted.

Why 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.

How is it misleading it's an accurate statement of the findings of an analysis. Your argument is they won't see those tokens cause they're gonna search out the one they like (and that one won't be a scam?) What they'll conclude reading this is "wow, crypto is full of scams" and be right.

It's accurate in the sense that "97% of email is scams and phishing" which is a neat fact but doesn't indict email as a failure.

Email and Uniswap are both useful tools that are safe to use for even non-technical users. In fact Uniswap is safer as spam filters aren't 100% reliable but Uniswap's lists nearly are.

Re: Do not rug on me: Zero-dimensional Scam Detection

#75

Post by nuclearnice1 »

kareemsabri wrote: post #61
Sargos wrote: post #50

Earlier quoted context omitted.

Why 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.

How is it misleading it's an accurate statement of the findings of an analysis. Your argument is they won't see those tokens cause they're gonna search out the one they like (and that one won't be a scam?) What they'll conclude reading this is "wow, crypto is full of scams" and be right.

Sargos explained how it’s misleading.

> “97% of the tokens are scams so Uniswap is unsafe to use"

People are likely to draw the unsafe assumption.

Sargos attempted to clarify that some safety is created with filtering via a trusted list.

Re: Do not rug on me: Zero-dimensional Scam Detection

#76

Post by throwup »

pyrale wrote: post #52
Sargos wrote: post #50

Earlier quoted context omitted.

Why 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.

Yeah, people should remember that they have 2.3% chance of not getting scammed on uniswap. That's the definition of safe to use.

This is logically incoherent. It would only be true if you chose a token completely at random instead of choosing a widely-used token you wanted to use.

Reminds me of "it either works or it doesn't, so there's a 50/50 chance"

Re: Do not rug on me: Zero-dimensional Scam Detection

#77

Post by legutierr »

platz wrote: post #45
Sargos wrote: post #36

It'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/ ) and by default users only see tokens such as…

do you dispute the OP title claim?

The OP title is misleading because the relevant number to think about with regards to scams on Uniswap is the percentage of value traded, not the percentage of tokens launched.

People can and do spam Uniswap with fake tokens, because it is wide open and anyone can interact with it. That doesn't necessarily mean that large amounts are being lost trading these scam tokens. I don't know the numbers myself, but if 99% percent of Uniswap trades are WBTC, ETH, LINK, USDC, DAI, and other big-name tokens, and 1% are scams, then the scale of the problem is not at all what is implied by the headline.

If someone is serious about measuring fraud on UniSwap, they would look into the percentage of value traded accounted for by these scam tokens.

This question matters from a policy perspective because headlines like this disparage one of the best things to emerge from crypto in recent years (DeFi) and deflect criticism away from where it is deserved (centralization).

DeFi apps like Uniswap are safer than centralized exchanges because you can see everything that is happening on-chain, and maintain custody of your own tokens yourself. Most people who were relying of FTX have been screwed by the exchange itself, regardless of the market value of the token that they thought they owned. If you lose money on Uniswap it's not because the exchange did something wrong, but because the issuer of the token did something wrong, or simply because the token you purchased fell in value.

If you are trading ETH, WBTC, LINK, USDC on Uniswap, you are better protected than if you are trading these same tokens on any of the centralized exchanges.

Re: Do not rug on me: Zero-dimensional Scam Detection

#78

Post by socialismisok »

Sargos wrote: post #50
platz wrote: post #45

Earlier quoted context omitted.

do you dispute the OP title claim?

Why 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.

97% of the things available in my vanguard or Charles Schwab aren't scams.

It's preposterous to call a marketplace where less then 3% of the offerings are "legit" a safe market to use.

Re: Do not rug on me: Zero-dimensional Scam Detection

#79

Post by oarsinsync »

Sargos wrote: post #63
pyrale wrote: post #52

Earlier quoted context omitted.

Yeah, people should remember that they have 2.3% chance of not getting scammed on uniswap. That's the definition of safe to use.

Misconceptions 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.

> If you go to Uniswap right now you will not see any of these tokens and have a near 0% chance of being scammed

If there's 100 tokens listed on the front page, and one of them is a scam, that may be near 0%, but it's equally near to 2%.

I'd be pretty confident that there's a >1% chance of being scammed on a platform like this. FTT wasn't thought to be a scam until it was proven to be.

Unless a token issuer does so with fully audited accounting with real assets backing their tokens, why should any token not be default assumed to be a scam, instead of default assumed to be valid?

Popularity and usage doesn't change this point. USDT may be incredibly popular, but it also lacks credibility.

Disclaimer: I still remain long BTC (lol@myself)

Re: Do not rug on me: Zero-dimensional Scam Detection

#80

Post by Sargos »

synu wrote: post #70
Sargos wrote: post #60

Earlier quoted context omitted.

If you go to Uniswap right now you won't see any of these tokens. You run no risk of getting scammed by using Uniswap unless you go out of your way and manually add them.

Looking at the paper abstract, it says the identified scams by looking at transactions. So it seems at least some people are manually adding them and getting scammed. Or are you saying anyone who does that is by definition using Uniswap wrong and shouldn’t be counted as being scammed on Uniswap?

The paper does not analyze the transactions directly unless I'm missing that piece. There are a number of reasons accounts would interact with the scam tokens such as the scamming group filling up the liquidity pool, creating fake volume to add legitimacy, and other steps to complete the scam.

There's also the obvious case of the scammers getting a user to actually buy the token (perhaps through spam email or "pump groups" that give explicit instructions on how to perform the swap) which I'm not saying has never happened but I do claim is more rare. Even the obviously silly scam emails do have the occasional person click on them and lose their money. The upside is that getting scammed on Uniswap is actually harder as you need to manually bypass safety features.

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