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Comment by teitoklien | Hacker News Reader

.... People pay for volume on uniswap daily ... They just spin up new wallets and keep making them exchange very high amounts of a token (10ETH buy , 10 ETH sell , multiple times) (net expense is just the gas fees, but they get paid wayyy more to do this).

This is usually done to get uniswap traded tokens onto various trending lists like cmc , dextools , etc.

I’d say there is 10-40x the fraud on uniswap than on centralised exchanges, its just that on uniswap if you know where to look, you can transparently see the fake volume being created in front of you.

But for human traders, it can be tricky sometimes.

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That doesn't pass the smell test.

Sure, you can wash trade on Uniswap, but it's expensive and everyone can see you doing it. The fee on most pools on Uniswap is 0.30%.

In contrast, wash trading on most centralized exchanges is cheap or free and very hard to prove unless you have access to their internal data.

Im specifically talking about up and coming , memecoins.

The liquidity pool on these are usually provided by token owner themselves, fee doesnt matter there (gas fees does, but they make much much more by doing this).

Tokens like these need these fake volumes to get the necessary amount of holders , publicity and volume to qualify to be listed on centralised exchanges.

Even when everyone can see you do it, owners of popular trending lists which list these tokens, intentionally look the other way on this wash trading and just need it for fulfilling listing requirements.

You can't do it without putting significant capital at risk since you also have to supply the other side of the pair. If there is no organic demand for your memecoin, people will be happy to dump it and take your ETH.

Except there is, they spend money on marketing and fill up telegram groups with tons of people who fall for this scam everyday, 90% of telegram groups involving crypto tokens are scams like these.

People get scammed daily by this.

This sounds like a much more interesting read than the TFA

If you want to see some examples of crypto scams go to /r/cryptomoonshots on Reddit. Almost everything posted there is some sort of rug pull scam with fake upvotes.

Thanks. So you're saying " FlokiVengers | New Heroes NFT Token Marketplace & NFT Launch Incoming Doxxed Dev | BUSD Rewards | join the Resistance! BSC Token" is a scam?

I mostly agree with you, but it's worth noting that the fee is distributed to the uniswap pool participants. Which means for a smaller coin that you are trying to pump, it would be feasible to deposit the majority of the money into the pool, and then trade back and forth to show volume. You'd be out gas fees + whatever portion of the trading fees the other participants receive.

> I’d say there is 10-40x the fraud on uniswap than on centralised exchanges

This makes no sense, especially if you factor in gas prices, pool fees, and volume.

If you own most of the lp, most of the fees go to you.

That's not true, the gas fees which are the largest part still go to the miners.

Well, now only about 15% of the tx fees go to miners. The rest of the gas fees are burned, so you can't even get a kickback from a friendly miner on your fees.

1- Gas price, to them its not a significant amount, its a business expense, they profit much more, when the token gets listed on popular lists due to this, which brings up new holders , who pump up the mcap by a lot, as the lp pool on these tokens is very small (only a couple of million dollars, compared to mcap which is way higher)

2- pool on tokens like these are usually only made by the owner themselves, so pool fees goes back to them.

3- They do this to invite new people, and then inflate the token price, and rug them by either pulling the entire lp, or just exit it , in a few mins.

Some also do this, to qualify for potential centralised exchange listing, down the line (instead of rugging).

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