The Red Alert system of BNB Chain flags projects based on evident characteristics that have previously been employed in scams, rug pulls and phishing.
BNB Chain, a blockchain network developed by the cryptocurrency exchange Binance, has discovered more than 50 on-chain projects that pose a substantial risk to customers. A variety of crypto spin-offs similar to Dogecoin (DOGE) and Binance, as well as those devoted to pandas, cyborgs, and koalas, made the list of unreliable and high-risk enterprises.
The Red Alarm feature of BNB Chain, which was implemented to protect investors from potential rug pulls and scams, flagged projects based on two main criteria: if the contract performs differently than what the project owners advertised, or if the contract contains risks that could affect users’ funds.
In July alone, the Red Alarm system assessed 3,300 contracts, according to BNB Chain’s investment director, and the company continues to create other methods for detecting misleading ecosystem activities.
The algorithm flags new initiatives that have not been evaluated and lack real products based on evident characteristics that have previously been utilised in scams, rug pulls, and phishing. Regina added:
“We will likely include them on the ‘Red Alert’ list to properly advise users to avoid or proceed with caution.”
Therefore, the identification of dangerous projects in real-time serves as a proactive approach to preserve investor cash. Red Alarm also permits users to evaluate project risks by inputting the contract’s location to determine if it has logical faults or fraud risks.
In addition to BNB Chain’s precautions, Regina advised investors to “do your own research” when participating with BNB Chain ecosystem projects.
Similarly to investors, well-intentioned projects are susceptible to attacks and scams. Velodrome Finance, a marketplace for trading and liquidity, recovered $350,000 in stolen cash after tracing the hack back to one of its own employees. Velodrome disclosed, following an internal inquiry, that:
“Much to our dismay, we discovered that the attacker was teammate Gabagool.”
While many members of the community flocked to the famed programmer’s defence, Gabagool admitted to the claims brought against him. Velodrome revealed later that it is collaborating with legal counsel to identify the next actions.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
