Since the Dencun upgrade that significantly reduced fees on Ethereum’s second layer, the moderately centralized rollup Base, operated by Coinbase, has seen a rise in user numbers, transactions, and total locked value.
Similar to the speed and affordability offered by the primary Solana blockchain, a significant portion of the activity is driven by risky speculation on meme tokens, with enthusiasts competing to reap substantial profits from minor investments.
An inquiry carried out by Magazine has revealed that the majority of tokens on the platform have flaws in their security that could lead to major financial losses for users.
Nearly one out of every five tokens is intentionally malicious, utilizing various tactics to pilfer user assets.
Magazine assembled security evaluations for 1,000 recent Base coins — almost exclusively meme tokens or fraudulent schemes — launched during the period of March 19 to 25. This review is not a comprehensive examination since there are over 380,000 ERC-20 tokens currently available on Base, but it does represent a sample of 1,000 tokens introduced that particular week.
These tokens underwent assessment by automated auditing tools on the trading analysis platform DEXTools to ascertain if each project had executed three fundamental security protocols: locked liquidity, validated contracts, and the absence of honeypots.
For individuals unfamiliar with these concepts:
Locked liquidity in decentralized finance (DeFi) refers to when a segment of a cryptocurrency’s trading pair is immobilized by a smart contract, directly addressing concerns about rug pulls.
A verified contract denotes that a project’s smart contract is accessible for investors to scrutinize potential risks.
A honeypot is a deceptive tactic that entices investors with the promise of high returns but restricts their ability to divest.
As per the examination, 908 projects, accounting for 90.8% of the sampled tokens, failed to meet at least one of these security criteria.
While certain security shortcomings could hint at potential unlawful actions, they are equally likely to indicate the inadequate understanding of proper security protocols by meme coin creators, particularly if they have launched a token for amusement or…
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