UniSwap is a popular Decentralized Exchange used by crypto enthusiasts globally. It is permissionless, allowing anyone to list their tokens on it without jumping through hoops. In addition, users can swap one token for another without registering or undergoing any KYC process, making it a prized feature in the blockchain space.
Given how innovative it is, UniSwap has soon become a home of both awesome projects and scam coins. Therefore, it is important to know the different tricks scammers use to fleece users of their cryptocurrencies on UniSwap. Below are common scams that occur on this Decentralized Exchange.
Fake Tokens Imitations
Anyone can list their token on UniSwap, making it easy for projects to offer their tokens to users on the platform. However, with the permissionless feature, scammers go for genuine projects that are relatively new or about to list and create a similar token.
Fraudulent Meme Coins
UniSwap is filled with meme coins created to fulfill a purpose or for fun. Sometimes, meme coins may go ahead to evolve into something better, while others either and die. It is common to see meme coin founders claiming to offer unprecedented growth rates to those that buy their coins. However, some meme coins like Squid token may add fraudulent lines of code in their smart contract to prevent people from selling.
Another type of scam on UniSwap is rug pulls. Rug pulls are a scam that involves the project team removing the liquidity suddenly to prevent investors from selling their tokens and recouping.
Exit scams are pretty popular on some coins listed on UniSwap. These coins claim to offer innovations to their users, but one day, the team decides to run off with the money raised in big tokens like the Ether and abandon the project.