The prevalence of scam tokens continues to rise, with Solidus Labs reporting over 250,000 rug pulls since 2021. In response, Solidus Labs is launching Token Sniffer API subscriptions, providing larger clients like decentralized exchanges and trading bots with the ability to run sniff tests on more than 2 million tokens across 12 blockchains.
Token Sniffer is a tool that helps detect two of the most common token scams: rug pulls and honeypots. Rug pulls occur when a new token is sold to investors and abandoned by its creators once their share of tokens has been sold. Honeypots are similar, with perpetrators preventing users from reselling their tokens. Additionally, impersonation scams are becoming more prevalent, with some tokens attempting to use big news from companies like Coinbase for fraudulent purposes.
Token Sniffer Popularity Increases
Solidus Labs, the blockchain security firm that acquired Token Sniffer in 2020, has seen tens of thousands of unique visitors per day to the tool since DeFi took off in 2021. To cater to the growing demand for scam detection services, Solidus Labs is offering Token Sniffer API subscriptions in two tiers, ranging from $100 to $200 per month.
Chen Arad, the Chief Operating Officer of Solidus Labs, noted that Token Sniffer will remain free for users content with checking tokens one at a time, to ensure that safety for the average decentralized finance user is not locked behind a paid API endpoint. Arad emphasized that accessibility to safe DeFi is crucial, stating, “If my grandmother wants to use DeFi, she doesn’t have to worry about someone rug pulling her or wash trading and taking a cut off the bottom and off the top. That’s also a part of accessibility. If something is open to everyone, but it’s not safe, in my opinion, it’s inaccessible. And that’s the bottom line here.”
In addition to providing a much-needed service to the DeFi industry, Token Sniffer has also gained attention from notable investors such as former Commodities Future Trading Commission chair Chris Giancarlo and former SEC commissioner Troy Paredes.
Overall, Solidus Labs’ Token Sniffer API subscriptions provide an essential solution for combating the growing number of scam tokens. With the new API, companies can now scan hundreds of tokens in a day, ensuring that users are protected from the increasing number of fraudulent tokens being created.