CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • DeFi & NFT
  • Buy
  • Language
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • DeFi & NFT News
  • Bitcoin Price Analysis
  • CryptoPotato Crypto Fund
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • bitcoin
    BTC$23,550.00
  • ethereum
    ETH$1,614.80
    • Market Updates
    • BTC Analysis
    • ETH Analysis
    • XRP Analysis
    • Interviews
    • Opinions
    CryptoPotato
    CryptoPotato
    • Crypto News
    • Margin Trading
    • Guides
      • Bitcoin & Crypto Guides 101
      • Bitcoin For Beginners
      • Editorials
    • DeFi & NFT
    • Buy
    • Language
    • Crypto News
    • Bitcoin For Beginners
    • Cryptocurrency Guides 101
    • Editorials
    • Bitcoin & Crypto Margin Trading
    • DeFi & NFT News
    • Bitcoin Price Analysis
    • CryptoPotato Crypto Fund
    • Ethereum (ETH) Price Analysis
    • Ripple (XRP) Price Analysis
    • Market Updates
    • Interviews
    • Buy Bitcoin with Card
    Home » Crypto News » Dark Side of DeFi: Millions USD Worth of ETH Lost to Uniswap Rug Pulls

    Dark Side of DeFi: Millions USD Worth of ETH Lost to Uniswap Rug Pulls

    Author: George Georgiev

    Last Updated Aug 26, 2020 @ 11:43

    Millions of dollars have been lost by unfamiliar DeFi investors falling victim to the common ‘rug pull’ practice.

    DeFi tokens continue to flood the markets as developers are minting new coins and listing them on Uniswap every day.

    While this might present an earning opportunity for some, the number of the so-called ‘rug pulls’ is also on the rise. Investors need to be extremely careful and selective when it comes to the tokens they put their money into.

    Rug Pulls: The Plague of Uniswap

    Uniswap is a protocol that allows buyers and sellers to swap ERC20 tokens without the use of an exchange or order book. It uses an algorithmic equation that determines the swap rate automatically based on the balances of both tokens, as well as the actual demand for this swapping pair.

    CryptoPotato explained in detailed guides on how the platform works, as well as how to use it.

    We’ve also talked about some of the present risks of using Uniswap. Namely, one of the challenges that are plaguing the field is the so-called rug pull.

    ADVERTISEMENT

    This is a con that begins with minting new tokens, creating Telegram groups to get the buzz going, followed by a Uniswap listing and injecting liquidity.

    At this point, the original malicious liquidity provider would wait for people to swap their ETH for the newly minted coin, after which the token’s creators would drain the liquidity pool, leaving holders with nothing but a worthless coin.

    Thousands of ETH Lost Already

    New coins are being listed on Uniswap every single day. And, to an extent, that’s to be expected. Unfamiliar retail investors with no previous experience in the field are happy to spend their ETH on coins that are going to pull off a “10x” increase in 24 hours. Or at least that’s what those Telegram groups or paid Twitter accounts are advertising.

    Crypto Twitter sees major accounts talking about new coins regularly. A recent example comes from a coin mimicking Ampleforth (AMPL), called TRUAMPL (TMPL).

    Someone was shilling “TRUAMPLE” yesterday, and 3 hours later the developers pulled the rug, stealing 1800 ETH.

    Be careful guys. Rug pulls are getting more and more frequent.

    — Boxmining (@boxmining) August 26, 2020

    And that’s far from the only recent example, as rug pulls of the kind take place regularly.

    How to Stay Away From Uniswap Rug Pulls?

    We can’t stress this enough, but before you swap your ETH or other assets for a so-called “Uniswap gem,” make sure to check whether or not the liquidity is locked.

    The most common means that reputable teams use to lock their pooled liquidity and gain additional user confidence and trust is through Unicrypt.

    It’s also very easy to verify whether or not liquidity for a particular pair is locked and the date that it is locked to. All of this can be done on the Unicrypt website. Just find the Uniswap browser tap and locate the desired pair to check how much of the liquidity has been locked (if any) and until when.

    SPECIAL OFFER (Sponsored)
    Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

    PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

    You Might Also Like:

    • 4 Things That Could Cause the DeFi Bubble to Pop
    • ftx_logo
      FTX Launches A Top 100 Uniswap Index Futures As DeFi Demand Grows
    • unicorn_ethereum_cover
      3.5 Million ETH Locked in Uniswap as Total Liquidity Approaches $3 Billion
    Tags: Crypto Scams DeFi Ethereum Uniswap
    Enjoy reading? Share with your friends
    Facebook Twitter LinkedIn Telegram

    About The Author

    George Georgiev
    More posts by this author

    Georgi Georgiev is CryptoPotato's editor-in-chief and a seasoned writer with over four years of experience writing about blockchain and cryptocurrencies. Georgi's passion for Bitcoin and cryptocurrencies bloomed in late 2016 and he hasn't looked back since. Crypto’s technological and economic implications are what interest him most, and he has one eye turned to the market whenever he’s not sleeping. Contact George: LinkedIn

  • bitcoin
    BTC$23,550.00
  • ethereum
    ETH$1,614.80
  • Join Our Community

    FacebookTwitter YouTubeTelegram


    Editorials
    2022 Was Crypto’s Dot Com Bust: Let’s Recap Tech Stocks After 2000 (Opinion)

    2022 Was Crypto’s Dot Com Bust: Let’s Recap Tech Stocks After 2000 (Opinion)

    How Long Will the Ethereum LSD Narrative Last? Talking 2023 Trends with Nansen’s Martin Lee

    How Long Will the Ethereum LSD Narrative Last? Talking 2023 Trends with Nansen’s Martin Lee

    Everything That’s Going on With Pi Network: From Start to Latest Controversial Listing

    Everything That’s Going on With Pi Network: From Start to Latest Controversial Listing

    What is Ethereum Liquid Staking and Why It Is Crucial As Shanghai Upgrade Approaches?

    What is Ethereum Liquid Staking and Why It Is Crucial As Shanghai Upgrade Approaches?

    The Lesson in Alameda-FTX About Government Regulation and Crypto (Opinion)

    The Lesson in Alameda-FTX About Government Regulation and Crypto (Opinion)

    5 Bullish and 2 Bearish Cases for DeFi Going Into 2023 (Opinion)

    5 Bullish and 2 Bearish Cases for DeFi Going Into 2023 (Opinion)

    From Google and Microsoft to Binance: Interview with Head of Product Mayur Kamat

    From Google and Microsoft to Binance: Interview with Head of Product Mayur Kamat

    Join Our Newsletter
    Become a CryptoPotato VIP
    One Weekly Email Can Change Your Crypto Life.
    Sign-up FREE to receive our extended weekly market update and coin analysis report
    We NEVER send spam. You can unsubscribe at any time.
    Invalid email address
    Thanks for subscribing!
    Footer Logo
    About
    Advertise on CryptoPotato
    About Us | Contact Us | Careers
    Editorial Policy
    Terms of service | Privacy Policy | GDPR
    More Sections
    IEO List | Evaluations
    Airdrops
    Scholarship
    Disclaimer
    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
    © Copyright CryptoPotato 2016 - 2021
    Scroll to top
    One Weekly Email Can Change Your Crypto Life.

    Sign-up FREE to receive our extended weekly market update and coin analysis report

    We never send SPAM. You can unsubscribe at any moment
    Invalid email address
    Thanks for subscribing!