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SolRPDS: A Dataset for Analyzing Rug Pulls in Solana Decentralized Finance

Alhaidari, Abdulrahman, Kalal, Bhavani, Palanisamy, Balaji, Sural, Shamik

arXiv.org Artificial Intelligence

Rug pulls in Solana have caused significant damage to users interacting with Decentralized Finance (DeFi). A rug pull occurs when developers exploit users' trust and drain liquidity from token pools on Decentralized Exchanges (DEXs), leaving users with worthless tokens. Although rug pulls in Ethereum and Binance Smart Chain (BSC) have gained attention recently, analysis of rug pulls in Solana remains largely under-explored. In this paper, we introduce SolRPDS (Solana Rug Pull Dataset), the first public rug pull dataset derived from Solana's transactions. We examine approximately four years of DeFi data (2021-2024) that covers suspected and confirmed tokens exhibiting rug pull patterns. The dataset, derived from 3.69 billion transactions, consists of 62,895 suspicious liquidity pools. The data is annotated for inactivity states, which is a key indicator, and includes several detailed liquidity activities such as additions, removals, and last interaction as well as other attributes such as inactivity periods and withdrawn token amounts, to help identify suspicious behavior. Our preliminary analysis reveals clear distinctions between legitimate and fraudulent liquidity pools and we found that 22,195 tokens in the dataset exhibit rug pull patterns during the examined period. SolRPDS can support a wide range of future research on rug pulls including the development of data-driven and heuristic-based solutions for real-time rug pull detection and mitigation.


Slow is Fast! Dissecting Ethereum's Slow Liquidity Drain Scams

Tran, Minh Trung, Sohrabi, Nasrin, Tari, Zahir, Wang, Qin, Xia, Xiaoyu

arXiv.org Artificial Intelligence

We identify the slow liquidity drain (SLID) scam, an insidious and highly profitable threat to decentralized finance (DeFi), posing a large-scale, persistent, and growing risk to the ecosystem. Unlike traditional scams such as rug pulls or honeypots (USENIX Sec'19, USENIX Sec'23), SLID gradually siphons funds from liquidity pools over extended periods, making detection significantly more challenging. In this paper, we conducted the first large-scale empirical analysis of 319,166 liquidity pools across six major decentralized exchanges (DEXs) since 2018. We identified 3,117 SLID affected liquidity pools, resulting in cumulative losses of more than US$103 million. We propose a rule-based heuristic and an enhanced machine learning model for early detection. Our machine learning model achieves a detection speed 4.77 times faster than the heuristic while maintaining 95% accuracy. Our study establishes a foundation for protecting DeFi investors at an early stage and promoting transparency in the DeFi ecosystem.


DeFiScope: Detecting Various DeFi Price Manipulations with LLM Reasoning

Zhong, Juantao, Wu, Daoyuan, Liu, Ye, Xie, Maoyi, Liu, Yang, Li, Yi, Liu, Ning

arXiv.org Artificial Intelligence

DeFi (Decentralized Finance) is one of the most important applications of today's cryptocurrencies and smart contracts. It manages hundreds of billions in Total Value Locked (TVL) on-chain, yet it remains susceptible to common DeFi price manipulation attacks. Despite state-of-the-art (SOTA) systems like DeFiRanger and DeFort, we found that they are less effective to non-standard price models in custom DeFi protocols, which account for 44.2% of the 95 DeFi price manipulation attacks reported over the past three years. In this paper, we introduce the first LLM-based approach, DeFiScope, for detecting DeFi price manipulation attacks in both standard and custom price models. Our insight is that large language models (LLMs) have certain intelligence to abstract price calculation from code and infer the trend of token price changes based on the extracted price models. To further strengthen LLMs in this aspect, we leverage Foundry to synthesize on-chain data and use it to fine-tune a DeFi price-specific LLM. Together with the high-level DeFi operations recovered from low-level transaction data, DeFiScope detects various DeFi price manipulations according to systematically mined patterns. Experimental results show that DeFiScope achieves a high precision of 96% and a recall rate of 80%, significantly outperforming SOTA approaches. Moreover, we evaluate DeFiScope's cost-effectiveness and demonstrate its practicality by helping our industry partner confirm 147 real-world price manipulation attacks, including discovering 81 previously unknown historical incidents.


Improving DeFi Accessibility through Efficient Liquidity Provisioning with Deep Reinforcement Learning

Xu, Haonan, Brini, Alessio

arXiv.org Artificial Intelligence

This paper applies deep reinforcement learning (DRL) to optimize liquidity provisioning in Uniswap v3, a decentralized finance (DeFi) protocol implementing an automated market maker (AMM) model with concentrated liquidity. We model the liquidity provision task as a Markov Decision Process (MDP) and train an active liquidity provider (LP) agent using the Proximal Policy Optimization (PPO) algorithm. The agent dynamically adjusts liquidity positions by using information about price dynamics to balance fee maximization and impermanent loss mitigation. We use a rolling window approach for training and testing, reflecting realistic market conditions and regime shifts. This study compares the data-driven performance of the DRL-based strategy against common heuristics adopted by small retail LP actors that do not systematically modify their liquidity positions. By promoting more efficient liquidity management, this work aims to make DeFi markets more accessible and inclusive for a broader range of participants. Through a data-driven approach to liquidity management, this work seeks to contribute to the ongoing development of more efficient and user-friendly DeFi markets.


LooPIN: A PinFi protocol for decentralized computing

Mao, Yunwei, He, Qi, Li, Ju

arXiv.org Artificial Intelligence

Networked computing power is a critical utility in the era of artificial intelligence. This paper presents a novel Physical Infrastructure Finance (PinFi) protocol designed to facilitate the distribution of computing power within networks in a decentralized manner. Addressing the core challenges of coordination, pricing, and liquidity in decentralized physical infrastructure networks (DePIN), the PinFi protocol introduces a distinctive dynamic pricing mechanism. It enables providers to allocate excess computing resources to a "dissipative" PinFi liquidity pool, distinct from traditional DeFi liquidity pools, ensuring seamless access for clients at equitable, market-based prices. This approach significantly reduces the costs of accessing computing power, potentially to as low as 1% compared to existing services, while simultaneously enhancing security and dependability. The PinFi protocol is poised to transform the dynamics of supply and demand in computing power networks, setting a new standard for efficiency and accessibility.


Uniswap Liquidity Provision: An Online Learning Approach

Bar-On, Yogev, Mansour, Yishay

arXiv.org Artificial Intelligence

Decentralized Exchanges (DEXs) are new types of marketplaces leveraging Blockchain technology. They allow users to trade assets with Automatic Market Makers (AMM), using funds provided by liquidity providers, removing the need for order books. One such DEX, Uniswap v3, allows liquidity providers to allocate funds more efficiently by specifying an active price interval for their funds. This introduces the problem of finding an optimal strategy for choosing price intervals. We formalize this problem as an online learning problem with non-stochastic rewards. We use regret-minimization methods to show a liquidity provision strategy that guarantees a lower bound on the reward. This is true even for non-stochastic changes to asset pricing, and we express this bound in terms of the trading volume.


5 Unique Passive Income Ideas -- How I Make $4,580/Month

#artificialintelligence

So you want to earn some extra cash. That's the right place to start. I've analyzed the whole industry of passive income and applied some of these methods myself. So you can be sure that each of them is a working method. If you don't know what passive income means, it's simply something that makes you money while you sleep. In other words, this is not an active job from 9 to 5. To create passive income, you first need to put something in, and then it will generate some income.


An introduction to the possibilities with Deeplink

#artificialintelligence

The decentralisation movement hit countless industries hard and fast with promises to revolutionise the way stakeholders interact. For the most part, this is very true. One such example is DeFi -- we have seen financial primitives (such as lending and borrowing) be reborn using the innovations of programmable blockchains. While these technologies are cutting edge and push the boundaries of what we thought was possible, it is time for them to take their next evolutionary step; with artificial intelligence and deep learning. This is the cutting edge of the cutting edge.


Fetch.ai launches AI 'agent' to counter DeFi impermanent losses

#artificialintelligence

Cambridge-based AI blockchain startup Fetch.ai has launched a DeFi (Decentralised Finance) Agents toolkit to greatly improve the experience of such "Web 3.0" applications. Fetch.ai made our innovative companies to watch in 2021 list for its grand vision to build a decentralised network of autonomous "agents" that perform real-world tasks. For most companies, that plan could sound almost impossibly ambitious--but Fetch.ai has the talent and resources to pull it off and continues to gain votes of confidence by signing partnerships with the likes of Bosch, Festo, and IOTA. The company's mainnet went live in March 2021 and has been ramping up its announcements since. The new DeFi Agents toolkit app is the latest in a barrage of announcements and allows users to customise stop-loss parameters on decentralised exchanges.


ARTICHAIN

#artificialintelligence

The first automated market maker (AMM) that integrates Yield Farming with Artificial Intelligence (AI). Artichain is a decentralized finance (DeFi) platform that runs on Binance Smart Chain (BSC) with incorporated features that easily let you earn tokens. Gain access to trade, earn and win big on the platform through ArtiChain Swap. ArtiChain Swap allows users to exchange their digital assets for an equivalent portion in tokens either through staking, farming or liquidity pool, thus increasing their digital assets value. Artichain Swap exchange to allow you trade against a liquidity pool and receive extra income gained from the trading fees.