Using ChatGPT to spot crypto honeypots, scam contracts, and other red flags

OpenAI’s ChatGPT offers plugins to help users identify potential cryptocurrency honeypots, providing an extra layer of security in the volatile cryptocurrency market.

As highlighted in Dynamo DeFithe Smarter Contracts plugin allows users to analyze smart contracts through the ChatGPT interface.

OpenAI says the tool analyzes smart contracts and tokens on the Ethereum network. We can provide account information, resolve ENS or .eth addresses, and even provide real-time gas prices. However, its primary function is to analyze token and NFT smart contracts and identify potential red flags that may indicate fraud.

Dynamo DeFi We have provided a practical example of how to use this tool. crypto slate validated the methodology by providing two Ethereum contract addresses and asking AI to analyze them.

The first contract proposed by Dynamo DeFi as “0x57E2bf” was flagged as possible fraud. The contract appeared to be a standard ERC20 token of his with additional features, but upon analysis it was decided to trick users into taking action rather than putting their interests first. It was shown that it was likely designed.

The second contract, ‘0xdAC17F’, was identified as a Tether (USDT) smart contract. No red flags were found in the analysis. This demonstrates the tool’s ability to distinguish between potentially harmful and legitimate contracts. The plugin says:

“This is a serious red flag and we recommend that you do not engage in this agreement without fully understanding its functionality and potential risks.”

Contract Review: Honeypot

With the Smarter Contracts plugin, crypto slate We have observed the following characteristics in contract addresses shared by Dynamo DeFi, suggesting that this is likely a honeypot scam:

The “0x57E2bf” contract on the Ethereum network conforms to the standard features of ERC20 tokens. It encapsulates functionality like: From Balances, Transfers, Authorizations, Transfersand allowancebalance checks, transferring tokens, and authorizing other users to consume tokens on your behalf.

The basic “Ownable‘ Capabilities assign exclusive owner rights and often include administrative functions not accessible to normal users.

However, other attributes include a mechanism that allows the owner to set a fixed transfer amount for specific addresses, which presumably allows these addresses to transfer only a predetermined amount of tokens per transaction. will be In addition, this agreement also allows the Owner to control trading activity and to deactivate or activate trading activity at his/her discretion. Only owners can transfer tokens until trading is allowed.

AI has flagged this contract as a potential honeypot from this analysis and brought it to your attention. In smart contract terminology, a honeypot is a superficially advantageous or profitable honeypot that engages users in actions that may harm the user’s best interests, such as freezing funds or declining balances. Refers to a contract designed to deceive.

Due to the significant risks associated with this feature, we believe you should avoid interacting with this Agreement without a comprehensive understanding of its features and inherent risks.

What are the honeypot symptoms?

There are some potential indications that this token contract could be used as a honeypot.

A contract is possessable Means that a single owner has special privileges. While not an uncommon feature, abuse of this privilege could lead to adverse consequences for other token holders.

Additionally, when working with this feature, owners will be able to: Set up fixed forwarding This may be used to limit the liquidity of tokens to specific addresses and control trading of tokens in favor of the holder.

Most worryingly, owners being able to turn trading on or off at will is a red flag. This means that holders can control when their tokens can be transferred and can be used for market manipulation or money trapping.

These features by themselves do not provide conclusive evidence that a token is a honeypot. Still, it gives token holders a high degree of control, which can lead to honeypot scenarios if abused. Therefore, understanding the dynamics of smart contracts will put investors in a more informed position in deciding whether or not to trade.

Contract example: Tether

For comparison, crypto slate We were also able to use the plugin to verify the following information about the “0xdAC17F” smart contract: Like its previous contract, Tether (USDT) is fundamentally built on the ERC20 standard and includes the same key features as ERC20 tokens.

The Tether contract also introduces features such as:“Ownable”, “Suspendable”, “Blacklist”,’ and ‘Upgradeable. ‘ ‘can be paused‘ feature allows the owner to suspend and resume the contract as needed. Essentially, this can be used to stop all token transfers in times of crisis. In addition ‘blacklist‘ feature also allows owners to add addresses to the deny list, preventing blocked addresses from performing transactions.

The contract is also “Upgradeable‘ suggests that you can fix the contract logic by deploying a new contract and assigning its address to an existing contract. The contract also has token issuance and redemption functionality, presumably used to keep the value of the token aligned with the US dollar.

AI analysis indicates that this contract is not a “honeypot” and is not designed to mislead users into taking actions that may not be in their best interests. I’m here.

compare contracts

of the tetherCan be paused function and ‘Transaction managementBoth features mentioned in the “honeypot” token contract allow the contract holder to stop token transfers. Still, they usually have different connotations and use cases.

“P”can be used Tether’s contract features, or similar tokens, are typically used as a security measure. This feature allows holders to suspend all token transfers in the event of a security breach or severe technical issue. Once the issue is resolved, the contract owner can unsuspend the contract and resume token transfers. The purpose behind this feature is to protect user funds in case of emergency.

However, “T”“Radar Control” The functionality of the contract provided allows the holder to enable or disable token transfers at their discretion. This is used to control the liquidity of the token, possibly to stabilize the price or control supply and demand. However, this feature can be abused if the owner stops trading to manipulate the market or trap user funds, which could indicate honeypot fraud.

Both features allow the owner to stop forwarding, but their uses and potential abuses are different. “P”usable‘The feature is commonly used in contracts with a good reputation as a safeguard,’transaction management Depending on the owner’s intent, this feature can be abused.

These examples demonstrate the potential of ChatGPT and its plugins in the crypto space. These tools help users navigate the complex and often dangerous world of cryptocurrencies by providing an extra layer of security.