A new study has found that almost all crypto projects listed on Uniswap between 2018 and 2021 were scams.

The study titled “Don’t Pull the Rug Under My Feet – Zero Dimensional Fraud Detection” was conducted by three researchers, namely:

Bruno Mazura, University of Pompeii Fabra and Victor Adan and Vanessa Daza from the University of Barcelona.

Can Uniswap be considered a hub for fake schemes?

Uniswap was founded in 2018.

Uniswap describes itself as a growing network of decentralized finance (DeFi) applications.

Uniswap hosts over 40,000 Ethereum Smart Contract (ER20) compliant cryptocurrencies on the platform providing users with options to trade various crypto assets.

Over the years, Uniswap has become one of the leading DeFi protocols in the industry, handling over $1 trillion in trading volume since its inception.

Although Uniswap is the largest DEX in the crypto market, recent research by researchers shows that 98% of all projects added to the protocol between 2018 and 2021 are rug pulls.

Pulling the rug is a common tactic used by scammers to defraud DeFi investors.

Fraudsters develop new projects and make marketing campaigns around them, after getting users’ money they abandon the project and run away with investors’ money.

The study found that Uniswap’s simplicity and lack of regulation made the platform a target for malicious actors to effectively run Initial Coin Offering (ICO) scams by inserting fraudulent digital tokens on the platform.

The researchers scanned 27,588 coins, of which 631 were classified as harmless and 26,957 were identified as harmful.

A total of 24,870 codes are classified as malicious and work with the rug-pull mechanism.

The result was compiled by creating a history of all tokens listed on the platform until 2021 using the Infura 18 archive node and the Etherscan 19 API for analysis and tagging.

Crypto community interaction with study results:

As expected, the investigation received backlash from the crypto community after crypto supporter Drnik shared the results of the study on Twitter.

A Twitter user questioned the effectiveness of the investigation and study, stating that the model was used to conduct research needed to add cryptocurrency liquidity/volume.

Also read:

Launching a $3M Mark Cuban Powered Crypto Wallet for Aptos

“ImmuneFi” project launches ranking list of rewards for revealing security flaws in Web 3.0 projects and protocols