I bought 100x coins, but I can't sell them

After the sharp drop, the DeFi sector has rebounded, and many DeFi currencies including AAVE and YFI have shown an upward trend. Take AAVE as an example, it has risen by more than 120% in 7 days.

"Configuring DeFi currencies" has become the voice of investors after missing out. However, at this time, a user named Wang Ping (pseudonym) reported to Shenlian Finance that he wanted to invest in DeFi coins, but bought "fake coins that can only be bought but not sold." Following Wang Ping's story, we found that counterfeit coins are rampant in the DeFi field. Take BitKeep as an example. Nearly 40% of the top 10 currencies on its growth list are counterfeit coins. The fraudulent methods of counterfeit coins are also varied. There are simple and crude impersonations, rogue mechanisms of "only buying but not selling", and code designs that can flexibly control "selling permissions". It can be said that these counterfeit coins are like blood-sucking worms parasitic in the DeFi field...

"Programmer was cheated by counterfeit money"

Wang Ping, a programmer, was cheated by counterfeit money.

The incident happened a week ago. Wang Ping bought KP3R, a new project of Andre Cronje, the founder of YFI, on the recommendation of a friend. He bought it at $170 and sold it at $300, earning 10 Ethereums in total. Having tasted the sweetness, Wang Ping planned to give it another try.

On November 3, while browsing the DeFi growth list on BitKeep, Wang Ping discovered several DeFi currencies with good performance. With a try-it attitude, he chose TRTC and other currencies to invest in.

“After I bought it, I found that no one was selling. There were only TRTC buy orders in the market, but no sell orders.”

At that time, Wang Ping naively thought that the reason why there was no selling was that the price of the currency continued to rise and everyone was reluctant to sell. Because from the data, it was indeed the case - the speed at which TRTC doubled was visible to the naked eye.

Wang Ping, who thought he had hit the jackpot again, boasted to his girlfriend that he would wait until the goods were shipped on Double Eleven and use the money earned to buy two iPhone 12. However, things were not as good as Wang Ping imagined. "When I wanted to sell the coins, I found that I couldn't sell them at all, and kept getting errors."

At first, Wang Ping thought that the gas was not enough, so he kept increasing the gas fee, but still could not sell it. Wang Ping felt something was wrong. Wang Ping, who had no idea for a while, asked his contract engineer friend Li Gang for help. After opening the contract address of TRTC, Li Gang and Wang Ping found that there was a line of code in TRTC's open source code: require(_from == owner || _to == owner || _from == UNI);

This code stipulates that the initiator of a TRTC sell order can only come from the Owner, and this Owner is naturally the developer of the TRTC project.

By retrieving data about TRTC on the Ethereum browser, Wang Ping found that all the sell orders were issued by a player with a contract address of 0xac10Af40abc7C67129b8C256A8C71B896a37d799. The real instigator of the TRTC scam was the player with an address ending in 799.

"Brother Li, is there any hope for this matter?"

Li Gang smiled and said nothing more.

Wang Ping felt that he had been fooled and could not get over it. On November 4, he transferred the 136 TRTCs that he had bought but could not sell to the last digit 799.

"I am a coder, but I was cheated by another coder. Money is a small matter, but the feeling of being inferior to others is really unpleasant."

In order to find out the truth, Wang Ping followed the clues and found that the player with the contract address ending in 799 was a big thief in the DeFi field. According to incomplete statistics, in the past month, the player with the contract address ending in 799 issued a total of 48 counterfeit coins, an average of 1.6 per day, which can be called a "model worker in counterfeit coins."

"40% of the top ten BitKeep gainers are fake coins"

Since he was deceived because he believed the price increase list on BitKeep, the first thing Wang Ping did when he went to work every day was to check the BitKeep price increase list.

"I've been observing it for several days, and the more I observe, the scarier it gets." According to Wang Ping, more than 40% of the top 10 DeFi currencies on the BitKeep growth list are counterfeit.

Taking the list at 15:00 today (November 11) as an example, Shenlian Finance found that WELL ranked second, KKS ranked third, and KPR4 ranked fourth are all counterfeit coins.

BitWell officially issued a statement saying that WELL has not yet entered the chain circulation, and the WELL contract address, price, total issuance, online time, etc. on Uniswap are all false information. Although there is no code in the WELL contract code to lock the user's selling channel, there is still a risk that the developer will suddenly withdraw liquidity. What's more, KPR4 (this name is obviously riding on the popularity of KP3R) is still from the last number 799 mentioned above.

We also found similar codes in its contract code.

KKS, which ranks third, is not created by the account with the last digit 799, but we also found the same code in its contract code.

"Although this code adds a lot of things, it is actually the same thing in a different way," said Li Gang.

The author has set up a transfer confirmation condition in the code, which is require(ensure(_from, _to, _value)) in the second red box in the text;

In this code, from and to are directly related to the conditions in the first red box, that is, only developers themselves or Uniswap can buy and sell.

The following from==tradeAddressIIcanSale[_from] means that the developer can open buying and selling permissions to some specific addresses.

“But it’s not that simple.”

Because all tradeAddresses ultimately point to Owner.

In addition, the function condition(address _from, uint _value) in the code stipulates that if a user wants to sell tokens, the quantity sold at a time must be between the minimum and maximum selling values ​​set by the developer.

It can be said that compared with those counterfeit currency projects that directly block the selling authority, KKS is a new version after upgrading, which can flexibly grasp the "selling authority".

According to Li Gang's analysis, one reason is that there are more fake coins on the market that can only be bought but not sold. BitKeep will conduct sales tests on the project, and the design of KKS can just escape BitKeep's review. Secondly, users have been cheated many times and will be wary of projects. Opening the selling permission at the beginning can make some users let down their guard. When the coin price rises, by adjusting the threshold, it can play the role of blocking the selling channel in disguise.

"These coins cannot even be called counterfeit coins, they should be called scam coins," said Li Gang.

Indeed, by playing with investors in the code, even programmers with technical knowledge can be deceived, not to mention ordinary investors who do not understand the code. Take TRTC as an example. Just before Wang Ping gave 136 tokens to the developer out of spite, someone actually spent $22,000 to buy 33,555 TRTC.

"The counterfeit currency business is very profitable"

Ever since DeFi became popular due to liquidity mining, fake coins, or scam coins, have become ubiquitous, like blood-sucking worms parasitic in the DeFi field.

For example, YFIII appeared right after YFI and YFII.

At that time, the project owner said that users only needed to fill in the Ethereum address or invite new users to obtain YFIII, or they could crowdfund YFIII at a ratio of 1ETH=90YFII. In fact, the airdrop was just a trick of the scam to expand publicity by using users. The main purpose of the scammers was to attract users to participate in crowdfunding with Ethereum. Because this scam appeared for the first time, many users wanted to get early chips and get high returns, so they naturally fell into the trap.

Therefore, within just one day after YFIII went online, the scammers pocketed ETH worth 270,000.

Coincidentally, on July 7 this year, the decentralized derivatives project Opium warned users on Twitter that there was a fraudulent token called Opium on Uniswap, which was traded under the name of OPM, but in fact the real Opium project itself did not have a native token.

On the same day, fake coins impersonating the DeFi protocol dYdX appeared.

At present, if you casually check a DeFi currency on BitKeep, you will most likely see that a currency has several identical or similar names, many of which are fake.

The reason why counterfeit coins are prevalent in the DeFi field is that unlike previous ICO fundraising and coin issuance, issuing coins on Uniswap does not require listing fees, and there is not even certification and review. It only requires the establishment of two funding pools, and "everyone can issue coins."

In addition, the codes of most projects on Uniswap are open source, making it extremely easy to issue counterfeit coins.

Just prepare a Google browser, install a little fox Metamask wallet, prepare a little Ethereum, and then copy a piece of open source code. The whole preparation is complete.

Next, you just need to upload the contract Folk on the online contract publishing website http://remix.ethereum.org/, set the token name, Ethereum decimal point precision, add tokens, connect the wallet, select the fund pool, and add liquidity. The token issuance is complete.

The entire coin issuance process only takes a few minutes.

After the currency is issued, an organized counterfeit currency team will make a market to push up the currency price while shouting orders in the community to attract speculative retail investors to enter the market.

Some counterfeit currency parties who are more Buddhist do not even conduct external publicity. They simply raise the price of counterfeit currency to get included in platforms such as BitKeep, and then use BitKeep as a traffic entrance to complete the publicity without spending any manpower or financial resources.

Almost zero cost, high returns without risk, and a "business model" that makes a lot of money have made the issuance of counterfeit currency more and more rampant.

There is an even more interesting thing about issuing counterfeit coins: in September, Uniswap airdropped platform coins to users, but ironically, in this epic airdrop, the biggest beneficiaries were not loyal users and liquidity providers, but counterfeit coin developers.

Because some professional counterfeit currency traders have accumulated a lot of Ethereum addresses that have interacted with Uniswap by issuing counterfeit currency, and made a lot of money from UNI airdrops.

So much so that some players lamented that the world is silently rewarding those who issue counterfeit coins.

Recently, as DeFi has recovered, DeFi coins have become the focus of investors again. In the future, with the further development of DeFi, the number of users and funds will increase. Of course, more secretive and sophisticated counterfeit coins will also appear. This is a challenge for both the platform and the users.

At present, platforms and traffic portals like BitKeep should further strengthen the review of new projects and strive to keep counterfeit and fraudulent coins out as much as possible.

For the majority of users, in the turbulent and scam-ridden field of cryptocurrency, perhaps all we can do is to curb our greed and remain vigilant.

After all, if you can’t sell the counterfeit currency you hold, even if the price increases by dozens or hundreds of times, it is ultimately just an illusion.