Fake Tokens on Uniswap Are Trying to Cash in on DeFi Hype

Scam tokens are a growing problem on the decentralized exchange and liquidity pool Uniswap — owing to the protocol’s open listing policy.

In recent days warnings have been issued about scam tokens targeting four of the most buzz-worthy decentralized finance (DeFi) projects including Curve Finance, 1inchExchange, Tornado.Cash, and dYdX.

With any token able to be listed on the platform’s drop-down menu simply by making a GitHub request, the platform’s users are increasingly calling for more stringent vetting to be introduced. 

Open listing policy leads to scam tokens

Decentralized derivatives project Opium took to Twitter on July 7 to warn users that a scam token called Opium and trading under the ticker OPM had been listed on Uniswap despite the project not having a native token.

The same day the Defiprime Twitter account noted a ‘DYDX’ token pool purporting association with the similarly tokenless DeFi protocol dYdX, along with a fake ‘Uniswap Community Token.’ 

A day earlier Tornado.Cash had reported that scammers were selling a fraudulent ‘TC’ token claiming affiliation to the project. Curve Finance and 1inch.Exchange reported fake coins impersonating their yet-to-be-released native tokens on July 5 and July 4 respectively.  

A similar scam token impersonating Balancer Labs’ then-forthcoming BAL was also identified last month.

Uniswap attracts liquidity

Since its ‘V2’ overhaul in May, Uniswap has emerged as a cornerstone of the nascent DeFi ecosystem, with data published by Dune Analytics indicating that Uniswap comprises DeFi’s top pool by total users with 92,000.

V2 also preceded a dramatic spike in Uniswap volume, with trade activity on the platform exceeding $20 million on July 2 — roughly six weeks after Uniswap’s volume broke above $2 million for the first time.