Ethereum Scammers Attempt Impersonating Top DeFi Projects: Warning

Ethereum scammers attempt impersonating top DeFi projects in order to get financial gain because the decentralized finance projects are getting more and more attention. In our latest Ethereum news today, we take a closer look at their form of attack.

Bitcoin is stalling for quite some time now while Decentralized finance rips higher. DeFi is currently one of the only segments of the crypto market that is seeing decent and stable growth. For example, Compound’s COMP altcoin is trading at $200 which is six times higher than the crypto’s price during the public launch in June. Also, COMP has a market capitalization surpassing $500 million despite it being a few weeks old. With a huge amount of capital getting thrown around in the crypto sector, it doesn’t come as a surprise that there are some ethereum scammers that want to capitalize on the hype.

Be aware of scam #DeFi tokens on Uniswap

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— defiprime (@defiprime) July 5, 2020

Since Ethereum is decentralized, anyone can use its native cryptocurrency and tokens and applications based on the blockchain. This means that scammers are able to use Ethereum to their advantage. With Defi becoming the preferred option, the ETH community are starting to warn of scams. Commenting on the recent growth of the DeFi sector, crypto trader Josh Rager said:

 “Will certainly welcome if DeFi coins want to pump like ICOs… One must understand […] that there will be many scams and eventually prices will undergo massive retraces.”

DeFi Portal DeFi prime was more specific and identified the most prevalent DeFi scam at the moment such as fake token listings on Uniswap, which is an ethereum-based decentralized liquidity network. over the past few weeks, many DeFi protocols launched their own tokens with COMP and BAL being the two major examples. There are a lot of ethereum-based applications that launch their own tokens to spur adoption and value.

Ethereum scammers attempt to impersonate DeFi projects and to take advantage of the listing official protocol tokens on Uniswap before the protocols actually launch their respective cryptocurrencies. DefiPrime identified about six protocols that are being targeted by the scammers including Tornado Cash, Curve, dYdX, and Uniswap. There’s another instance of a user being scammed out of $1,270 worth of WETH for a fake dYdX token. Qiao Want, a former Messari head of product said:

 “So long as ETH 2.0 is not fully rolled out, there’s an obvious opportunity for a highly scalable blockchain to dethrone Ethereum. Paying $10 transaction fee and waiting 15 seconds for settlement is just bad UX.”