Over 40 percent of DeFi token pairs may be fraudulent

Tuesday, December 27, 2022

According to Rome Blockchain Labs research, over 40% of DeFi token pairs may be fraudulent or duplicates. The research analyzed over 1 million pairs on Uniswap (ETH) and PancakeSwap (BNB).

In light of the many marketplace crashes and burgeoning fear in the marketplace, due to scandals like FTX and Terra, RBL wanted to investigate how dangerous DeFi really is for the average person. While everyone knows they should Do Their Own Research, how critical is it to really understand the marketplace tikers and symbols prior to investing?

With between 40% and 59% of tokens having duplicate pairs on reputable networks, RBL believes users must be very vigilant when exploring investments. Read on to learn more about the specific findings.

Over 40% of DeFi token pairs may be fraudulent or duplicates, according to Rome Blockchain Labs

Rome Blockchain Labs (RBL) has released new research showing that many token pairs on decentralized exchanges (DEXs) may be fraudulent or duplicates. Using its data service, RBL Net, the team analyzed data on over 1,000,000 pairs on UniswapV2 and UniswapV3 on Ethereum and PancakeSwap on BNB Chain. The research found that of the 190,887 pairs created this year, 81,457 (42.7%) had the same token symbols as another pair as of August 2022. Now, in December of 2022, this has increased to 59.4% of 581 592 Token Pairs.

This phenomenon is likely due to bad actors creating fake tokens with the same ticker as legitimate ones in an attempt to capture assets from unsuspecting traders. However, the research notes that not all duplications are necessarily fraudulent, as legitimate tokens may use the same symbol as a completely different pair.

"Given our data capacity, we wanted to use this information to help prevent new traders from falling victim to scams like I almost did. This research is a reminder that it's important to do your due diligence and be cautious when trading on DEXs, especially with so many new projects popping up all the time," said Alexander Szul, co-founder of RBL and BENQI.

Since the original research was completed in August 2022, RBL has continued monitoring the situation with a broader scope. Now, the duplicate pairs are considered from the start date of each exchange (Uniswap V2 - 05/18/20; Uniswap V3 - 05/04/21; PancakeSwap - 09/20/20) and the changes in duplicate pairs are highlighted. These iterations of the research are able to infer:

The more popular a pair, the more duplicates exist; scammers are praying on people wanting to make quick, uneducated decisions in a high-pressure environment.
The longer an exchange exists, the more duplicate pairs will exist; users should be vigilant no matter the success, popularity, or authority of a DEX.
As the ecosystem continues to grow and flourish, so will the potential for being scammed.

RBL will continue to offer insights and statistics quarterly, beginning in January of the New Year.

The full results of the research can be found in the chart below.

Results as of 08/04/22

	All pairs					Active pairs
Exchange	Total pairs	# w/ duplicates	# of duplicates	%	Most duplications	Total active pairs	# w/ duplicates	# of duplicates	%	Most duplications
Uniswap V2	23,514	2,812	4,854	20.6%	BURN/WETH 24	952	13	27	2.8%	WETH/TINU 3
Uniswap V3	2,041	195	240	11.8%	APE/ WETH 6	323	10	11	3.4%	SHI/WETH 3
PancakeSwap	165,332	22,879	76,363	46.2%	TEST/ WBNB 354	4,823	274	362	7.5%	Google/WBNB 6
Total	190,887	25,886	81,457	42.7%		6,098	297	400	6.6%

Pairs created from exchange creation date* to 2022-09-30; Active as of 2022-10-18

	All Pairs					Active pairs total
Exchange	Total pairs	# w/ duplicates	# of duplicates	%	Most duplications	Active pairs	# w/ duplicates	# of duplciates	%	Most duplications
Uniswap V2	97,654	13,643	37,389	38.30%	SINU/WETH 79	1853	40	40	2.20%	All active pairs 2
Uniswap V3	8,208	473	574	7.00%	APE/WETH 6	939	8	8	0.90%	All active pairs 2
PancakeSwap	795,705	84,592	496,447	62.40%	PORNHUB/WBNB 693	6,511	335	403	6.20%	Cake-LP/WBNB 7
Total	901,566	98,708	534,410	59.30%		9,303	383	451	4.80%

Pairs created from exchange creation date* to 2022-11-30; Active as of 2022-12-20

	All Pairs					Active pairs total
Exchange	Total pairs	# w/ duplicates	# of duplicates	%	Most duplications	Active pairs	# w/ duplicates	# of duplciates	%	Most duplications
Uniswap V2	120,372	16,676	48,564	40.3%	SINU/WETH 97	2,037	56	56	2.7%	All active pairs 2
Uniswap V3	9,175	543	678	7.4%	APE/WETH 6	1,038	10	10	1.0%	All active pairs 2
PancakeSwap	849,452	89,975	532,349	62.7%	INFINITY/WBNB 728	6,225	341	401	6.4%	MT/USDT 6
Total	978,999	107,194	581,592	59.4%		9,300	407	467	5.0%

Exchange	Total pairs	# w/ duplicates	# of duplicates	% Change	Total Active Pairs	# w/ duplicates	# of duplicates	% Change
Uniswap V2	22,718	3,033	11,175	29.9%	184	16	16	40.0%
Uniswap V3	967	70	104	18.1%	99	2	2	25.0%
PancakeSwap	53,748	5,383	35,902	7.2%	-286	6	-2	-0.5%
Total	77,433	8,486	47,182	8.8%	-3	24	16	3.5%