Tonight I discovered this post by @the-bitcoin-dood :
He noticed a trend in the hacks which have resulted in rug pulls. For me, the money quote is here:
Enough of this nonsense... It's time for these smaller exchanges to start listing shitcoins and smaller cryptocurrency projects again and leave the ERC20 trading to the DEX's...
On top of it all, that's what the DEX is for! It fixes this. Trade tokens on the DEX trade shitcoins on a CEX... It's not that complicated!
(Emphasis added)
This observation in hacks or rug pulls may be familiar to people here, but it's new to me. It may happen with Binance-based tokens or the ERC-20 analogs on other blockchains, but maybe it's common to actual ERC-20 tokens.
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Rug pulls can happen in any token. If the development team is shady, it is a dead deal before one starts.
That is why it is buyer beware. It is also why many of us stick with Cubfinance and do not stray.
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It's the code in the smart-contracts. Devs don't see all the holes or consider all the possible exploits in what they're writing. They do it too fast. They falsely assume something covers an area of concern. They rely on open source code from other places that hasn't had the exposure they're about to get. Or they just make a mistake and overlook something.
There a many different ways for a hacker to wriggle through a crack. Many of which they find almost accidentally. It's why audits are important. Bounties are important. And knowing the team is important.
Nobody really cares about the code when there isn't anything to protect or lose. But put a few million dollars or more underneath it, and now there is an incentive to attack it. Like I said, Ethereum is open source so basically ANYONE can build something on it. Just like anyone here can build their own token. It's important to know who you're jumping into bed with when you're putting your money at risk.
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That is true. Blocktrades also noted that there are holes in the code because most are not familiar with Solidity. That is why the fact that these smart contracts are written in code that the developers are not fully aware of creates vulnerabilities.
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Which is why HAF is going to be such a big deal. Full circle. :-)
I read through that Speak Network Proposal and even they talk about the fact that working with HIVE is difficult in certain areas right now because of writing to the blockchain. They're actually going to use Peerplays for some of the tokenomics stuff and fully migrate it to HIVE later. I asked the question "Will HAF solve this?". I'll be curious to see the response.
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Nice! I still have to read it in detail but it looks promising.
HAF could help with that from what I understood of Blocktrade's interview on Cryptomaniacs but we'll see.
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It's true that rug pulls can happen in any token. But are some development platforms more susceptible to them than others?
The complaint in the post is about ERC20 tokens, but it's also true that Ethereum is the largest of the development platforms. More opportunities for mischief. Had Binance been the largest development platform at the time, maybe the complaint would be about BEP2/BEP20 tokens. Size matters in crypto as much as it matters in relations.
DYOR is fundamental any time we want to invest in a crypto, even a shitcoin.
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Poly had a number of hacks too, didnt they? I am not sure of the chain...was it Polygon?
I know there was one hit like 3 times in a week or 10 days.
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Yea they had
And also ThorChain had a few in a very short time.
It could also be the case that hacks on Ethereum make more news but I think, as you said, they can happen on every platform if the devs are sloppy
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Well it does look like hacks are becoming more common and the amount being lost is also increasing. I guess we need decentralized exchanges.
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We need more DEX's, not less. Peer-to-Peer commerce needs to balloon in volume. We need more decentralization, not less. More importantly, those cryptos which want to fall under central control can do so while leaving the decentralized cryptos alone.
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Decentralization and Distribution is what we need.
So you hit the nail on the head. We need more, not less.
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