“The following projects have been deemed untrustworthy and have a high level of risk“. That’s the title of the “Red Alarm” section of the DappBay app, which was launched in mid-July on the Binance BNB Chain blockchain. As of this writing, more than 70 suspicious projects have been identified. A mix of crypto spin-offs resembling Dogecoin and Binance and others dedicated to pandas, cyborgs and koalas made the list of untrustworthy and high-risk projects.
The growth of the crypto-currency ecosystem is associated with fraudulent and malicious projects (scam, phising.) …). To help users distinguish between good and bad projects within decentralized finance (DeFi), DappBay focuses on decentralized applications (Dapp). A Dapp is typically built around smart contracts that are based on blockchain technology (mainly on Ethereum at the moment).
Extremely high levels of risk
If DappDay finds good projects, it will alert users to hazards that are associated with specific projects by identifying them in real time.
“As a decentralized blockchain, we recognize the challenges ahead, but we are confident that as a group we can defeat the efforts of criminals,” BNB Chain noted in the blog post published Monday.
Currently, BNB Chain has more than 1,300 active Dapps and claims more than 3.3 billion transactions per day that come from 163 separate addresses. With that in mind, it decided to create an app that scans projects deemed questionable by users.
“BNB Chain launches DappBay platform with Red Alarm https://t.co/FMNLCbChew
– CZ 🔶 Binance (@cz_binance) July 14, 2022
The application detects a fraudulent project based on two factors: if the project (or smart contract) differs from the project founders’ announcements or presents an opportunity for users to have their money stolen.
“Most importantly, Red Alarm’s functionality will help users stay one step ahead of fraudsters. The system gives real-time warnings about potential risks associated with projects, allowing community investors to make informed decisions about investments,” Gwendolyn Regina, director of investments at BNB Chain, told Cointelegraph.
Clones of well-known cryptocurrencies.
In July, the app was able to scan over 3,300 projects. At the time of writing this article, it has discovered more than 70 suspicious projects. In the list of identified projects, there are many clones of well-known crypto-currencies such as BabyLuna in reference to the Luna crypto-currency that fell in mid-May, or BabyDogeGas in reference to Dogecoin.
Each project’s application explains why it is a fraudulent smart contract, and links to its social networks and websites. For example, the project “BabyLuna“, which is a token “meme” generating a return, risks losing its funds according to the application. On Twitter, the project has more than… 16,000 users.