New crypto scam: this dApp allows scammers to create ERC-20 tokens in 2 minutes – BeinCrypto

Crypto Scam: Token Generator, a dApp based on the SmartContracts Tools platform, allows scammers to create tokens in less than a minute.

Token Generator is available on Ethereum, Binance SmartChain and Polygon. The tool allows its users to create tokens using smart contract technology.

Token Generator: user manual

First, the user must connect a wallet crypto (as MetaMask) to the platform. Then, he must deposit enough ETH, MATIC or BNB tokens to be able to pay the contract fee for the new crypto. The token may have optional features, including supply capping, deflationary issuance, or the ability to be burned or mined.

The user must also specify the type of the token and the blockchain on which it will be deployed. If he decides to launch his token on Ethereum or Polygon, he must choose the ERC-20 standard. If he prefers to deploy it on Binance SmartChainhe must choose the BEP-20 standard.

If the user selects Ethereum, they can deploy their token either on the mainnet or on the Goerli or Sepolia testnets.

Then, he must give a name and a logo to his new cryptocurrency.

The user can also define the initial supply of the token and decide if it will be fixed, unlimited or capped. Additionally, he can choose who will have access to the token, and even determine its mechanics and emission/burning rates. Finally, the owner of the token has the option of assigning themselves the role of administrator or issuer.

Once all the fields have been filled in, just click on “Create Token”.

Eventually, the user will have created a usable ERC20 token, whose smart contract code has been verified.

At the time of writing this report, the Token Generator app has already generated over 30,000 custom tokens.

A new tool for scammers?

Tools like Token Generator give scammers the ability to easily create ERC-20 tokens and list them on decentralized crypto exchanges like Uniswap.

Indeed, decentralized exchanges (DEX) allow anyone to launch a new smart contract, deposit funds and manage them as they see fit. In other words, DEXs act as automated market makers.

In order to launch a new token, the user must combine it with another well-known crypto (for example, ETH) in a smart contract called “constant product AMM”. As its name suggests, this AMM will ensure that the total value of tokens available in the liquidity pool remains constant.

Suppose a user deposits 10 X tokens and 10 ETH, the constant product is 100. If someone buys 5 X tokens, the pool will only have 5 X tokens left. To keep the product constant, the AMM will sell the other X tokens at 2 ETH each. Indeed, the price of token X increases as people buy it.

When the crypto scammer believes that token X has reached a high enough price, he removes it from the liquidity pool and then disappears.

From crypto scams the most recent ones include Animoon, a Play to Earn game whose founders stole $6.3 million from investors. The game allowed users to customize non-fungible Pokémon-like tokens and promised them tempting rewards. To achieve their ends, the leaders of the platform called on Jake Paul, an influencer whose reputation leaves something to be desired.

Similarly, Vagabond, the founder of Azuki NFT, was accused of crypto scam after profiting from three failed NFT projects.

How to protect against crypto scams?

To achieve their ends, most scammers take advantage of investor greed and FOMO (Fear of missing out, or the fear of missing an opportunity). They usually use social media and marketing bots to create buzz around their projects. Sometimes scammers also impersonate some prominent figures in the crypto market, including Michael Saylor from MicroStrategy, Vitalik Buterinthe co-founder of Ethereum or even Brad GarlinghouseCEO of Ripple (XRP).

In order to stay safe from a possible crypto scam, we advise you to thoroughly research the projects in which you want to invest. Try to collect as much information as possible about the founders of the project and its history. And of course, don’t forget to read and analyze the white paper (white paper) of the project.

If the token you’re interested in has a clear track record and is listed on centralized crypto exchanges, that’s a pretty good sign. Typically, centralized exchanges meticulously review projects before listing them on their platforms.

Finally, tools like Rug Pull Finder and RugDoc could also help you identify crypto scams.

Disclaimer

All information on our website is published in good faith and for general information purposes only. Any action taken by the reader based on information found on our website is entirely at their own risk.

We would like to give thanks to the writer of this post for this remarkable material

New crypto scam: this dApp allows scammers to create ERC-20 tokens in 2 minutes – BeinCrypto


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