Solidus Labs Launches TokenSniffer API to Combat DeFi Rug-Pull Woes

Solidus Labs Launches TokenSniffer API to Combat DeFi Rug-Pull Woes

Time Stamp: March 11, 2023 2:34 PM
Source Node: 2009845

Key Takeaways

  • Solidus Labs has launched a new TokenSniffer API to combat the rug-pull woes impacting DeFi and crypto investors.
  • The solution analyses on-chain data and smart contract source code to assess and alert on the risk investors will be “rug pulled” by a token’s deployer.
  • The TokenSniffer API will allow platforms and traders to easily monitor for, detect, and avoid fraudulent tokens in an automated manner at scale.

Decentralized Finance (DeFi) has seen massive growth in recent years, with more users and investors flocking to platforms that offer them greater financial freedom and autonomy. However, as the DeFi ecosystem expands, so too has the prevalence of fraudulent tokens and rug pulls – scams that can wipe out investors’ funds in a matter of minutes. This has created a significant challenge for the DeFi industry, which is striving to maintain its growth and reputation in the face of such risks. Solidus Labs, a leader in crypto and DeFi market integrity and risk monitoring, has launched a new TokenSniffer API to combat the rug-pull woes impacting millions of DeFi and crypto investors.

The solution analyses on-chain data and smart contract source code to assess and alert on the risk investors will be “rug pulled” by a token’s deployer.

The new tool is designed to support Decentralized Exchanges (DEX), crypto trading bots, and the wider DeFi and crypto community through seamless integration with TokenSniffer’s capabilities.

Asaf Meir, Solidus Labs’ Founder and CEO, said that the new product is central to Solidus’ vision – enabling DeFi’s potential by simplifying and mitigating its risks, shedding light on manipulative and abusive behaviour, and accelerating safe adoption.

The TokenSniffer API will allow platforms and traders to easily monitor for, detect, and avoid fraudulent tokens in an automated manner at scale.

The company said that it will continue offering individuals complimentary access to TokenSniffer.com where they can test one token at a time.

DeFi activity has grown substantially over the past two years. Since early 2021, the total value locked (TVL) in DeFi platforms has grown 2,100%, the number of DeFi users has grown 700%, and DEXs have gained on CEXs in terms of spot trading volume.

This increased activity and the potential of DeFi have been threatened by an increase in DeFi scams and fraud: In October 2022, the Wall Street Journal and Gartner reported on Solidus data flagging 188,000 hard rug pull scam tokens with a new scam deployed every four minutes on average, bringing the total number of hard-coded scam tokens to 250,000 by March 2023. Rug pulls are estimated to have hurt close to 2 million investors in 2022.

Read Also: SelfKey Combats Identity Fraud with Zero-Knowledge AI Verification Technology

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