Sushi Adds GoPlus Security Checker to Protect Users from Honeypots

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As a researcher with extensive experience in the cryptocurrency space, I cannot stress enough the importance of vigilance when it comes to trading new or unknown tokens on Decentralized Exchanges (DEXs). The constant risk of falling victim to scams perpetrated by token issuers is a reality that every user must face.

Users of Decentralized Exchange (DEX) platforms who trade in new or unfamiliar tokens face a continuous risk of losing their funds due to various scams orchestrated by token issuers. To stay protected, they must remain vigilant against common types of token fraud as well as the increasingly complex schemes that are regularly introduced. In response, Sushi has collaborated with GoPlus Security to facilitate the identification of potentially problematic tokens.

DEX Diligence as a Service

In a permissionless blockchain system, it’s straightforward for anyone to introduce a new token and define its smart contract terms, which outline how the token functions. These conditions typically involve harmless aspects such as the token name, total supply, and regulations regarding burning, liquidity, or taxation. For example, creating a token with a 5% sell tax is an achievable feat, whereby the generated fee gets redistributed to the liquidity pool to boost its size and enhance the overall protocol functionality.

For every legitimate token launched on well-known chains like Binance Smart Chain and Ethereum, there are a dozen potentially fraudulent ones where investors stand to lose all their funds. It is during such situations that services like GoPlus Security shine, as they warn users about hidden risks lurking in the token contracts, allowing them to make informed decisions.

Sushi uses GoPlus’s Token Security API for assessing token risks, ensuring secure transactions, and supplying comprehensive token details. This feature enables users to recognize potentially fraudulent tokens and make informed decisions on purchases, thereby minimizing the risk of falling victim to scams.

Honeypots That Keep on Pumping

Honeypot scam tokens allure buyers with seemingly irresistible chart patterns. These charts often indicate a steady upward trend, which unfortunately is not an illusion for honeypots’ unsuspecting investors. Following a purchase, selling the token becomes an impossible task due to restrictive smart contracts that only permit approved addresses, typically those belonging to the contract creator, to execute sales transactions.

Not all honeypot tokens behave in the same way: some permit selling, but are artificially inflated with large amounts of liquidity to attract buyers who believe they’re buying the next potential meme coin sensation. However, this liquidity isn’t secured, enabling the contract creator to abruptly withdraw it and result in significant losses for investors. These honeypots can experience dramatic price increases before the liquidity disappears unexpectedly.

GoPlusSecurity is extensively utilized by EVM platforms to caution users about prevalent scams. For instance, it’s implemented on DEX aggregator Dexscreener, allowing users to avoid numerous fraudulent projects. Beyond evaluating fundamental token contract details like sellability, its API can identify if the smart contract is open source, a proxy contract, mintable, includes a trading cooldown, blacklist, and more.

Safety in a Sea of Sharks

As a researcher, I would advise that integrating GoPlus Security’s token checker into Sushi’s platform is a proactive measure to enhance user security. This feature will serve as a guide for users, alerting them whenever they attempt to interact with a token that isn’t included in Sushi’s standard list. Furthermore, the API will assign a risk rating to these tokens, empowering users to make informed decisions before engaging with potentially risky assets.

Despite the significance of this service, potential token buyers should conduct their own thorough research. This includes looking up the token address on Twitter and examining the project’s social media channels to determine if user interactions are permitted. Additionally, seeking out opinions from other crypto community members can provide valuable insights. Although scammers will continue to attempt deceitful activities, partnerships like Sushi and GoPlus Security’s collaboration equip DEX users with additional tools to combat such threats. The fight against scams is ongoing, but every victory counts.

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2024-05-23 15:45