This security software has the capability to identify deceptive setups like honeypots and other fraudulent activities within the Web3 ecosystem. Honeypot scams have the potential to result in significant financial losses. The latest update to this antivirus software not only allows it to identify honeypots but also various other fraudulent schemes in the Web3 arena.
As the Web3 landscape continues to evolve, scam tactics are evolving as well. With increased cryptocurrency awareness among all user groups, scammers are devising new strategies and refining old tricks to deceive individuals and deprive them of their assets.
One of the newer tactics gaining attention is known as the honeypot scam. Despite its seemingly harmless name, this scheme can lead to substantial financial losses.
How does the honeypot scam operate?
The term "honeypot" is frequently used in cybersecurity to describe a deceptive setup designed to attract unsuspecting individuals.
Honeypot scams encompass a range of fraudulent schemes. One of these involves smart contracts that simulate a design flaw, which appears to allow any user to withdraw Ether, Ethereum's native currency, from the contract by sending a specific amount of Ether in advance. However, when a user attempts to exploit this apparent vulnerability, an undisclosed trapdoor, unbeknownst to the user, thwarts the attempted Ether withdrawal. The primary objective is to divert the user's attention solely to the visible vulnerability while concealing any evidence of a secondary vulnerability within the contract.
The scam functions by enticing victims with an apparently easily accessible wallet. For example, the wallet's recovery phrase may have been "leaked."
Victims attempt to access it, believing they can transfer funds from this wallet. To complete the transaction to their own wallet, victims often need to deposit a native network token to cover transaction fees. However, a script or "sweeper bot" swiftly redirects these tokens elsewhere before the victim can take action.
To spot such scams, cryptocurrency holders should be vigilant for unsolicited seed phrase shares, immediate wallet transfers following a deposit, or unfamiliar direct messages on social platforms.
How to identify honeypots and other scams
Web3 Antivirus (W3A) is a browser extension that can perform real-time analysis of smart contracts and tokens, making it easy to detect honeypot schemes and other fraudulent activities. This tool can be integrated with popular web browsers like Chrome, Firefox, Brave, and Edge, providing crypto users with a secure environment to interact with decentralized finance (DeFi) and Web3 applications.
Web3 Antivirus continually updates its capabilities to stay ahead of scammers and their latest tactics. In its most recent update, version 0.10 significantly improved the precision of honeypot detection. The antivirus can now pinpoint the specific type of honeypot users may encounter, thereby helping them avoid potential losses.
In addition to honeypots, version 0.10 introduced detection for the following new scams:
- Direct transfers: W3A immediately identifies direct ETH and ERC-20 token transfers, which are unrecorded and unregulated transactions associated with a high risk of loss due to potential scammers.
- eth_sign signatures: W3A outsmarts phishing sites by detecting and blocking malicious eth_sign requests.
- Permit attacks: Fraudsters exploit Permit and Permit2 signature vulnerabilities to gain access to victims' ERC-20 tokens. W3A detects these attacks and provides timely warnings to users.
- Phishing contracts and swaps: W3A monitors transactions designed to empty user wallets and provides instant warnings. It also tracks swap transactions.
This Web3 security tool not only identifies suspicious actions within a contract that a user may interact with but also examines all related contracts. This allows it to detect involvement in rugpulls, Ponzi schemes, terrorism financing, spam, or theft.
At the beginning of September, W3A released version 0.11, its latest update. This update enhances transaction details by displaying potential decentralized exchange (DEX) pairs and their liquidity whenever users attempt to purchase ERC-20 tokens.
The latest version also keeps an eye on transaction tax fees and notifies users if the commission exceeds 15%. Anything exceeding 50% is flagged as a potential honeypot scam.
Web3 Antivirus is now also available for Spanish-speaking users, and localization specialists are working to expand language options.
Thanks to Web3 Antivirus, the Web3 ecosystem is now safer, a crucial factor for mass adoption. Scam techniques like honeypots, permit attacks, and phishing are promptly identified by this tool, helping crypto users avoid potential financial losses.