50 High-Risk BNB Chain dApps
DappBay's Red Alarm feature has highlighted 50 high-risk BNB Chain dApps with more than 220K monthly active users combined and contributed towards a safer Web3.
One of the key features of decentralization is that anyone can build on Web3. However, that feature also attracts a few bad actors looking to deceive Web3 users.
According to figures published by Action Fraud, fraud in crypto increased by 32% in 2022 as scammers targeted new investors. The DeFi sector accounted for 82% of all stolen crypto in the same year according to a Chainalysis report. Chainplay's Crypto Crime Report 2023 found rugpull was the most common form of crypto crime with 287 cases reported and $9.3 billion lost.
High-risk BNB Chain dApps share one or multiple common themes associated with risky dApps. Some of the common themes associated with high-risk dApps include a lack of documentation and white papers, anonymous team members, most followers or users being bots, centralization in top holders, no legitimate audit report, unverified contracts, high fees, backdoor or potential backdoor methods, and more.
DappBay’s Red Alarm feature has helped identify over 400 high-risk BNB Chain dApps in under a year. The Red Alarm list of high-risk dApps on BNB Chain is updated every Friday with the level of risk, the risk description, and other important risk details. Web3 users can safely navigate BNB Chain dApps while staying away from high-risk and potentially risky dApps.
50 High-Risk BNB Chain dApps
The dApps have been categorized according to different types of risks such as Ponzi, phishing, honeypot, backdoor methods, high fees, unverified contracts, lack of white papers, anonymous teams, and platforms not working as intended.
A high-risk dApp may fall into more than one category, such as Jackpot Miner, a high-risk dApp that’s a Ponzi, has high fees, and an anonymous team. For simplicity, a dApp will be classified under one category only.
1. Ponzi dApps
Ponzi dApps or potential Ponzi schemes lure investors with the false promise of extremely high returns. But similar to all Ponzi’s, a small group of initial investors profit from a larger group of more recent investors. A Ponzi scheme collapses when there are no later investors to continue to deposit money into the contract.
2. Phishing dApps
Phishing usually forges legitimate web pages to trick you into entering your private keys or authorizing transactions that you don't understand. However, it is unlikely that your private key will be leaked with a single click. Phishing scams are not common to crypto, and have been around since the dawn of the internet.
Binance Mining Pool
Baby BNB Tiger
3. Honeypot dApps
A honeypot is a way of trapping someone’s crypto. A scammer creates a new coin and through the code, enables the ability for only their wallet to withdraw funds. A user only realizes that it’s a honeypot when the user tries to withdraw their funds, and they can’t.
AI Open Network
4. Backdoor methods or potential backdoor
A backdoor in crypto is similar to a backdoor being a weak spot in a castle’s defenses. Backdoors are built purposefully into the smart contract with the intention of bypassing security. For example, Dingo, a dApp to mint NFTs, has a backdoor function that can change the fees on any transaction to 99%.
5. High fees
High token fees are fees incurred when buying, selling, staking, or withdrawing tokens from a dApp. High fees both ways mean users incur the cost of the transaction and is a common feature for Ponzi dApps. High fees also indicate that the dApp wants to make a profit through taxing users rather than innovative products and services that benefit the market.
6. Lack of documentation and whitepaper
While having documentation and a whitepaper isn’t necessarily a sign of a healthy dApp, a lack of documentation and a whitepaper can most likely indicate a risky dApp. Reading the documentation and whitepaper should give a user an idea of what the dApp is about, who the key members are, what is the project's roadmap, access to important links, significant updates, access to contracts, etc.
7. Unverified contracts
Unverified contracts make it difficult for users to read the source code, analyze the logic or conduct due diligence. For example StableMagnet, an AMM, utilized unverified ecosystem contracts to scam their users of $27M. However, not all dApps with unverified contracts are causes for concern as dApps can work on verifying their smart contracts.
Big Crypto Game
8. Websites do not work or work properly
If websites, dApps, or platforms don’t work or work as intended, then there is a certain level of risk associated with using them. In other cases, dApps may fall out of favor over time, developers may move on to other projects, or websites may not work properly intentionally.
9. Anonymous Teams
Anonymous teams and developers don’t always mean that a dApp is risky. Satoshi Nakamoto, the creator of Bitcoin, was an anonymous developer. However, several risky dApps share a common theme of anonymous teams or people. Anonymity means it can be difficult to verify if a developer is genuine, or if a bad actor is masking their deceit.
10. Fake dApps
A scammer creates a fake dApp with an identical name, logo, description, etc. However, the contracts of the fake dApp differ from the original. Unsuspecting users mistake the fake token for the original when interacting with it. For example, Venus, an AMM dApp on BNB Chain, has multiple imposters with fake platforms and contracts, but only one original.
Pro Tip: Read the entire address! The first few characters and the last few characters of the fake token address are the same as the real token, which is very confusing.
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