As a researcher with experience in the blockchain industry, I find the ImmuneFi report on rug pulls on BNB Chain quite alarming. The fact that over $368 million, or 23% of the total losses on BNB Chain since its launch in 2020, can be attributed to rug pulls puts this blockchain at the forefront of this issue in the ecosystem.
The report from ImmuneFi revealed that the BNB Chain, which was launched by Binance in 2020, has experienced a total of over $1.6 billion in losses during the past four years. A significant portion of these losses, equating to around $368 million, can be attributed to rug pulls. This figure surpasses the combined total of rug pull incidents on other blockchains, making BNB Chain the leader in this regard. For example, Ethereum has reported a total of $3.6 billion in losses since its inception, while only 4.4% or $158 million of these losses can be attributed to rug pulls.
Shady token developers may lure investors with the promise of valuable utility and then suddenly disappear with the funds after launching their tokens. This deceptive practice, referred to as a “rug pull,” leaves unsuspecting investors holding worthless tokens once the developers have made off with the profits.
The report shed light on why BNB Chain leads in rug pulls within the blockchain landscape. A major cause is the prevalence of forked code among developers on this platform. Additionally, the user community has been notable for its lax security focus and has drawn a large number of users seeking instant profits.
Scammers have caused significant damage through the use of rug pulls. In 2020, this type of scam led to losses of $22 million on BNB Chain. The following year, the losses escalated to $107 million, then $152 million in 2022, and $73 million in 2023. So far in 2024, rug pulls have resulted in a further loss of $12 million. In total, BNB Chain has experienced losses amounting to $368 million from rug pulls since their inception. The report indicates that there have been 228 instances of this scam on the BNB Chain platform.
“ImmuneFi shared insights on red flags for potential rug pulls. These warning signs may include unverified audit declarations, reluctance to embrace continuous code assessment or bug rewards programs, concentration of token control and dissemination, minimal community interaction, enticing guarantees of extraordinary profits, and absence of a credible business application.”
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2024-07-14 21:26