Airdrop Mania Sees Latest Airdrop Rug Pull on Buyers Through Smart Contract Exploit

As reported by @cat5749, a scam surfaced on Dec. 31, 2021 to reward $YEAR tokens to ETH transactions based on the contents of their Metamask wallet.

Investors in a new cryptocurrency called $YEAR were the subject of a honeypot scam, as tweeted by @cat5749. Essentially a token creator used a website called EtherWrapped that connected to a Metamask wallet. The individual or group of individuals allotted $YEAR token rewards to users based on their ETH transactions throughout the previous year.

Everything on Ethereum is handled via smart contracts which run on the Ethereum Virtual Machine. Smart contracts can be freely viewed using Etherscan. To create a new token, an entity must create a new smart contract in a decentralized application language called Solidity and deploy it to the Ethereum Virtual Machine. Initially, when the contract is uploaded, it is an “unverified” contract.

In the case of this scam, the smart contract was verified when members of the Ethereum community clamored for verification. By verification, the contract became public. This means that the smart contract code was open to scrutiny.

A newer exploit is for malicious entities to create seemingly benign smart contracts, with traps hidden in plain sight. These are impervious to code inspections, as there are often no obvious signs that the smart contract owner wishes to engage in malicious activity. In the case of the $YEAR token and smart contract, a Twitter user named @cat5749 and others examined that smart contract for apparent traps in the code. They couldn’t find anything that looked suspicious. They came across a function called “_burnMechanism” which would fail if contact was attempted with the contract owner. This didn’t raise any obvious red flags, but would prove instrumental in diagnosing how the attack happened.

Revoking ownership to crash new coin

The owner revoked ownership of the contract, and made its new owner the decentralized exchange, UniSwap V2. This meant that only purchases could be made from UniSwap V2, but nothing could be sold to UniSwap V2. The smart contract owner would then become the only seller, causing the price of the $YEAR token to increase. As users saw the price increasing, FOMO made them want to buy.

When a new token is created, the creator must develop a way for users to buy and sell the token. This sometimes means that the creator will place a valuable token such as ETH and their new token in a trading pool. Buyers of the new token will need to supply the valuable token to get the new token. What can happen is that the creator can pull out his original valuable token plus the new token. Due to the way automated market makers work, this will remove more of the valuable token than the worthless token.

The creator then pulled out liquidity from UniSwap V2, including over 30 ETH, and caused the new token to crash, leaving some very disgruntled investors.

What do you think about this subject? Write to us and tell us!

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Note: This article have been indexed to our site. We do not claim legitimacy, ownership or copyright of any of the content above. To see the article at original source Click Here

Related Posts
Why coffee and oat prices are rising faster than oil’s thumbnail

Why coffee and oat prices are rising faster than oil’s

Food prices globally have seen large hikes this year, making oats and coffee futures the fastest-growing commodities this year.The relative year-to-date performance for oat futures increased 87%, and for coffee, 81%, as of Dec. 22, according to Finviz, a site that displays financial data. They outpaced oil and natural gas, the markets for which are…
Read More
Virtual Betting in the US thumbnail

Virtual Betting in the US

To set foot in any casino in Las Vegas is a dream to the majority of the punters but not all states legalize gambling. Listed here are the states which gambling enthusiasts can visit in the US. Nevada The first state to legalize gambling and here and considered as the gambling capital in the US.…
Read More
20 questions to ask digital asset management platform vendors during the demo thumbnail

20 questions to ask digital asset management platform vendors during the demo

MarTech » Content Marketing » 20 questions to ask digital asset management platform vendors during the demoDigital asset management can play a vital role in your marketing organization, unifying online and offline marketing channels and leading to more efficient marketing resource allocation.Given all of that promise, marketers are certainly evaluating these technologies and one crucial…
Read More
Bitcoin Tests USD 44K, Ethereum Nears USD 3K, LUNA and WAVE Outperform thumbnail

Bitcoin Tests USD 44K, Ethereum Nears USD 3K, LUNA and WAVE Outperform

Bitcoin price tested the USD 44,000 level.Ethereum broke the USD 2,850 resistance, XRP is still below USD 0.80.LUNA jumped 23%, while WAVES rallied 48%.Bitcoin price broke the main USD 40,000 resistance to start a strong uptrend. It is currently (04:02 UTC) trading near USD 43,200 after briefly spiking to almost USD 44,200. Similarly, most major altcoins…
Read More

yes_Shenma Power (603530) shares it_Eastern Fortune

发表于 2021-09-30 09:49:25 东方财富Android版 郑重声明:用户在财富号/股吧/博客社区发表的所有信息(包括但不限于文字、视频、音频、数据及图表)仅代表个人观点,与本网站立场无关,不对您构成任何投资建议,据此操作风险自担。 郑重声明:用户在社区发表的所有资料、言论等仅代表个人观点,与本网站立场无关,不对您构成任何投资建议。用户应基于自己的独立判断,自行决定证券投资并承担相应风险。《东方财富社区管理规定》
Read More
Index Of News
Consider making some contribution to keep us going. We are donation based team who works to bring the best content to the readers. Every donation matters.
Donate Now

Subscription Form

Liking our Index Of News so far? Would you like to subscribe to receive news updates daily?

Total
0
Share