Spread of scams in the Ethereum network
Analysts at Citi, one of the world's largest banks, are warning about the growing number of scams in the Ethereum ecosystem, the largest public blockchain network after Bitcoin. According to their data, the sharp surge in activity on the Ethereum network recently is due not so much to an increase in the number of real users, but rather to the spread of various types of fraud, such as 'address poisoning'.
What is 'address poisoning'? This is a type of attack in which attackers create a large number of cryptocurrency wallets and send very small amounts of ETH to them. The goal of these actions is to overload the Ethereum blockchain and, as a result, slow down the network's operation. This not only makes it difficult to conduct legitimate transactions, but also creates favorable conditions for the spread of other types of fraud.
According to Citi data, the number of unique addresses on the Ethereum network in January 2023 reached almost 250 million, which is 15% more than in December 2022. At the same time, analysts believe that a significant part of this growth is due to fraudulent schemes, and not an increase in the number of real users.
Why is this important for marketers and arbitrage traders?
The spread of fraudulent schemes in the Ethereum ecosystem has a negative impact on all market participants - both cryptocurrency holders and representatives of the digital industry. For marketers and arbitrage traders working with traffic in this area, this situation can create additional risks and difficulties:
- Complication of targeting and analytics due to the growth of fictitious accounts and wallets;
- Difficulties with traffic monetization due to a decrease in the number of solvent users;
- Reputational risks when working with unsafe or fraudulent projects.
Citi experts urge market participants to closely monitor the situation in the Ethereum network and take measures to minimize the risks associated with the spread of various types of fraud.