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 the top 100 projects on CoinGecko. There are many lists created by reputable players such as Aave and Gemini which cover the entire gamut of projects users want to trade without exposing end users to scam tokens.
I believe this is a good system and has worked well as having any kind of listing process or even a DAO introduces subjectivity and provides points of capture for bad actors. With an open listing process and standards like TokenLists we can say that Uniswap is truly a public good and will be around as long as we need it which provides a guaranteed way to swap any asset for any other asset no matter who created it or how controversial it is which is a good primitive for humanity to be able to rely on.
>There are many lists created by reputable players such as Aave and Gemini which cover the entire gamut of projects users want to trade without exposing end users to scam tokens.
Reputable how? like ftx a couple weeks ago? Gemini holds an F rating by the BBB and a massive amount of complaints on trust pilot.[1][2]
This is their marketing message "Put your crypto to work. With Gemini Earn, you can receive up to 8.05% APY on your cryptocurrency." This is done by buying and holding stablecoins. Just curious how do you suppose they return such high APY on stablecoins without doing the exact same scam as FTX?
It's just neutral infrastructure. Trying to think of an analogy, I thought... "It would be like saying 98% of transactions in $USD are scams, that wouldn't mean $USD are unsafe to use."
But once i said that in my head... it would definitely say something about a traditional currency if 98% of transactions were scams. (I know uniswap isn't a currency, that just came out of my attempt at an analogy). Something not good. About something. Maybe it doesn't mean uniswap is unsafe to use, but wow, it means something is a mess.
If it just means that there are a crazy ton of people trying scams with tokens, that sure seems like something to be aware of.
"which provides a guaranteed way to swap any asset for any other asset no matter who created it or how controversial it is which is a good primitive for humanity to be able to rely on."
Some comments: While the report findings might be correct on the number, the terminology and conclusion in related discussion are often not. No real person ever traded these 26k tokens. The creation of liquidity pool should not be considered a launch, as you still somehow need to convince other people to buy it from you. Nothing was "launched".
These trading pairs are more akin to spam, to show up in the search results (somewhere else, do not show up on Uniswap). Other research find the scam volume is way less than 1% of the total trading volume. Only looking this number does not reflect the true health of the market or the controls Uniswap has in place to prevent trading these tokens.
We also do not call fake Viagram advertising email rug pull, even if it is clearly intended to steal your money without making your dick hard.
Sure, because anyone can create and list a token on Uniswap. The only cost are the gas fees. That doesn't mean those tokens have any real liquidity or are being used. Just like anyone can create a website and put it online. The only cost are the hosting fees. That doesn't mean it'll get any visitors.
There's a lot of reasons to dislike cryptocurrencies but the fact you can manually paste an address to the uniswap interface and trade a well-performing token to a poor-performing one (the definition of scam used here) is definitely not one of them.
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.
> The terms scam and malicious token are not being used identically by all researchers. For example, papers such as
[44] use the terms scam and under-performing token indistinguishably, leading to inaccurate results and classifications.
In the current paper, we define a malicious token as one released by a developer or a group of developers with no
intrinsic value or use case.
I guess the test token I put on Uniswap is a scam then.
Pokemon cards were sold for kids to have fun, and in the end they actually are valuable, whereas NFTs were marketed as valuable, and in the end kids make fun of people buying them.
I’d probably like to charitably interpret some of these ‘no real value’ tokens as “debugging” or “dry-run” or some other kind of harmless experiment.
They didn’t measure how much value was stolen by rug-pull maneuvers. Did 10,000 ‘fake’ tokens start up, run a while, and rug-pull taking $1 with them? I’d guess that’s just ‘debugging’. Did a few big rug pulls run away with a million dollars? Can we detect _those_ better?
This title should be changed. It is heavily editorialized. It’s not what the paper is about. It is just causing the typical crypto haters to get out their pitch forks.
This article is about fraud detection. The conversation should really be about the machine learning techniques used, and the actual conclusion, which is using those techniques, ” This implies that new malicious tokens can be detected prior to the malicious act,and, on the other hand, tokens supported by a strong project can also detected at an early stage.”
Yes, they built a fraud detection system... and with it discovered that 97.7% of tokens were rug pulls
"Based on this theoretical foundation, we provided a methodology to find rug pulls that had already been executed. Not surprisingly, we found that more than the 97,7% of the tokens labelled were rug pulls."
Bit higher than expected but not that surprising. Deploying a new token costs almost nothing, but may lead to outsized rewards for scammer. It can be easily automated.
They defined it as a sudden and complete disappearance of the coin's liquidity. And they defend this as being indicative of a rug pull because it's pretty much definitional: a rug pull is when only one entity is propping up a coin's market in order to make it seem viable, and then suddenly disappears, taking all the liquidity with them. That liquidity is the very "rug" being pulled.
They suggest that this doesn't look like an organic collapse because it happens all at once, in a coordinated manner. I don't have the expertise to evaluate that claim, but it at least seems plausible.
What seems more problematic to me is that I'm not convinced that all of these events can be considered malicious. I would think that me just dicking around on the blockchain looks the same. Maybe I try making a coin, realize getting it off the ground is not going to be worth the effort or otherwise lose interest, and then abandon the project even before it really sells much. If so, then what percentage of these coins can be explained that way? Quite a large one, I'm guessing.
Perhaps there's another argument to be made, though, that that is not a good defense of the health/safety of the market for general consumers. Lots of coins that nobody should be touching because they aren't serious perhaps doesn't look much different from lots of legitimate scams from a consumer perspective. Either way, the story for consumers is a rather rigid formulation of "caveat emptor".
For reference, Uniswap is a cryptocurrency exchange which uses a decentralized network protocol. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts.
Crypto is pitched as a decentralized alternative to central bank currencies. Which, I think, is a great idea, especially with CBDCs (which are really going to be the catalyst for fascism on steroids, especially in quasi-democracies) on the horizon.
My biggest problem with crypto is that most people who buy and hold it are not truly libertarians looking to scale up usability in the space. They're really just gamblers who want their investment to go to $1M per bitcoin so they can convert to fiat (the irony) and retire to the Bahamas and life the big life.
Otherwise, why does the entire industry keep banging on about $100K EOY?
And I won't begrudge you that, after all, it's your money, isn't it?
But until crypto makes a hard pivot from being a speculative investment to an ecosystem encouraging day-to-dy usage, I just don't believe it has any long-term usage.
In addition, I think Zuckerberg had an extremely brilliant idea when he wanted to make a stablecoin tied to a basket of currencies - it's be stable enough to use on a day-to-day basis, and it'd still be a crypto, at least theoretically.
That's the thing with decentralization, since anyone can participate you will always get a bunch of gamblers because most people are not in it for ideology but rather to make a buck. That's just human nature. Is it possible to create incentives to keep the gamblers way? I haven't come across any great ideas so far.
[+] [-] Sargos|3 years ago|reply
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 the top 100 projects on CoinGecko. There are many lists created by reputable players such as Aave and Gemini which cover the entire gamut of projects users want to trade without exposing end users to scam tokens.
I believe this is a good system and has worked well as having any kind of listing process or even a DAO introduces subjectivity and provides points of capture for bad actors. With an open listing process and standards like TokenLists we can say that Uniswap is truly a public good and will be around as long as we need it which provides a guaranteed way to swap any asset for any other asset no matter who created it or how controversial it is which is a good primitive for humanity to be able to rely on.
[+] [-] dsugarman|3 years ago|reply
Reputable how? like ftx a couple weeks ago? Gemini holds an F rating by the BBB and a massive amount of complaints on trust pilot.[1][2]
This is their marketing message "Put your crypto to work. With Gemini Earn, you can receive up to 8.05% APY on your cryptocurrency." This is done by buying and holding stablecoins. Just curious how do you suppose they return such high APY on stablecoins without doing the exact same scam as FTX?
[1]https://www.bbb.org/us/ny/new-york/profile/cryptocurrency-ex...
[2]https://www.trustpilot.com/review/gemini.com
[edit] added quote for clarity
[+] [-] jrochkind1|3 years ago|reply
It's just neutral infrastructure. Trying to think of an analogy, I thought... "It would be like saying 98% of transactions in $USD are scams, that wouldn't mean $USD are unsafe to use."
But once i said that in my head... it would definitely say something about a traditional currency if 98% of transactions were scams. (I know uniswap isn't a currency, that just came out of my attempt at an analogy). Something not good. About something. Maybe it doesn't mean uniswap is unsafe to use, but wow, it means something is a mess.
If it just means that there are a crazy ton of people trying scams with tokens, that sure seems like something to be aware of.
[+] [-] r_hoods_ghost|3 years ago|reply
Finally, somewhere I can sell my slaves easily!
[+] [-] platz|3 years ago|reply
[+] [-] headsoup|3 years ago|reply
[+] [-] miohtama|3 years ago|reply
These trading pairs are more akin to spam, to show up in the search results (somewhere else, do not show up on Uniswap). Other research find the scam volume is way less than 1% of the total trading volume. Only looking this number does not reflect the true health of the market or the controls Uniswap has in place to prevent trading these tokens.
We also do not call fake Viagram advertising email rug pull, even if it is clearly intended to steal your money without making your dick hard.
[+] [-] mudrockbestgirl|3 years ago|reply
[+] [-] eli|3 years ago|reply
[+] [-] lvass|3 years ago|reply
[+] [-] k__|3 years ago|reply
It's a bit like saying most startups go belly-up in the first years, so we shouldn't do startups anymore.
[+] [-] onlyrealcuzzo|3 years ago|reply
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.
[+] [-] nuclearnice1|3 years ago|reply
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.
[+] [-] Kiro|3 years ago|reply
I guess the test token I put on Uniswap is a scam then.
[+] [-] fieldcny|3 years ago|reply
The difference is when I buy a Pokémon card, I own the physical item.
When I buy an NFT I buy a digital claim on some item, but you don’t actually own the item, you own the claim that you own the item.
[+] [-] dannyw|3 years ago|reply
Quantity matters.
[+] [-] williamcotton|3 years ago|reply
It’s fun for people to own and trade AMC, GameStop, Magic: The Gathering, Ethereum, NFTs, etc.
[+] [-] nathanaldensr|3 years ago|reply
[+] [-] pyrale|3 years ago|reply
Pokemon cards were sold for kids to have fun, and in the end they actually are valuable, whereas NFTs were marketed as valuable, and in the end kids make fun of people buying them.
[+] [-] brianolson|3 years ago|reply
They didn’t measure how much value was stolen by rug-pull maneuvers. Did 10,000 ‘fake’ tokens start up, run a while, and rug-pull taking $1 with them? I’d guess that’s just ‘debugging’. Did a few big rug pulls run away with a million dollars? Can we detect _those_ better?
[+] [-] 40four|3 years ago|reply
This article is about fraud detection. The conversation should really be about the machine learning techniques used, and the actual conclusion, which is using those techniques, ” This implies that new malicious tokens can be detected prior to the malicious act,and, on the other hand, tokens supported by a strong project can also detected at an early stage.”
[+] [-] cush|3 years ago|reply
Yes, they built a fraud detection system... and with it discovered that 97.7% of tokens were rug pulls
"Based on this theoretical foundation, we provided a methodology to find rug pulls that had already been executed. Not surprisingly, we found that more than the 97,7% of the tokens labelled were rug pulls."
[+] [-] zeroclip|3 years ago|reply
Reminder that 85%+ of all email sent is spam.
[+] [-] cush|3 years ago|reply
[+] [-] menzoic|3 years ago|reply
[+] [-] mumblemumble|3 years ago|reply
They suggest that this doesn't look like an organic collapse because it happens all at once, in a coordinated manner. I don't have the expertise to evaluate that claim, but it at least seems plausible.
What seems more problematic to me is that I'm not convinced that all of these events can be considered malicious. I would think that me just dicking around on the blockchain looks the same. Maybe I try making a coin, realize getting it off the ground is not going to be worth the effort or otherwise lose interest, and then abandon the project even before it really sells much. If so, then what percentage of these coins can be explained that way? Quite a large one, I'm guessing.
Perhaps there's another argument to be made, though, that that is not a good defense of the health/safety of the market for general consumers. Lots of coins that nobody should be touching because they aren't serious perhaps doesn't look much different from lots of legitimate scams from a consumer perspective. Either way, the story for consumers is a rather rigid formulation of "caveat emptor".
[+] [-] churchill|3 years ago|reply
[+] [-] sureglymop|3 years ago|reply
[+] [-] adamgordonbell|3 years ago|reply
Prevents things like FTX in theory right?
[+] [-] zeroclip|3 years ago|reply
[+] [-] qeternity|3 years ago|reply
Of the remaining tokens it’s likely that a large portion will rug in the future.
[+] [-] churchill|3 years ago|reply
My biggest problem with crypto is that most people who buy and hold it are not truly libertarians looking to scale up usability in the space. They're really just gamblers who want their investment to go to $1M per bitcoin so they can convert to fiat (the irony) and retire to the Bahamas and life the big life.
Otherwise, why does the entire industry keep banging on about $100K EOY?
And I won't begrudge you that, after all, it's your money, isn't it?
But until crypto makes a hard pivot from being a speculative investment to an ecosystem encouraging day-to-dy usage, I just don't believe it has any long-term usage.
In addition, I think Zuckerberg had an extremely brilliant idea when he wanted to make a stablecoin tied to a basket of currencies - it's be stable enough to use on a day-to-day basis, and it'd still be a crypto, at least theoretically.
[+] [-] zmaurelius|3 years ago|reply
[+] [-] wildrhythms|3 years ago|reply
[+] [-] im3w1l|3 years ago|reply
Otherwise you can be taken to the cleaners by scammers wash-trading piles of dirt.
[+] [-] ElfinTrousers|3 years ago|reply
[+] [-] Msw242|3 years ago|reply
[+] [-] DavidFerris|3 years ago|reply
Forgive me, but isn't it only useful to detect scams before they happen?
[+] [-] ethanbond|3 years ago|reply
[+] [-] the_gastropod|3 years ago|reply
[+] [-] breck|3 years ago|reply
[+] [-] m00dy|3 years ago|reply
[+] [-] mensetmanusman|3 years ago|reply
https://youtu.be/lC5lsemxaJo