Dechat: Honeypot Incident on PancakeSwap – Risk for Investors
Dechat Accidentally Linked to Honeypot Pool on PancakeSwap
Dechat, an open Web3 communication protocol, experienced an unfortunate incident when in its official token launch announcement on February 26, it accidentally linked to a honeypot pool on PancakeSwap. This situation was quickly discovered by a blockchain researcher known by the pseudonym ZachXBT. Unfortunately, due to the incorrect link, users could have been at risk of losing funds.
Dechat’s Response to the Error
Upon immediate detection of the error, Dechat took swift action to rectify the situation. The initial announcement with the wrong link was removed, and a new one with the corrected PancakeSwap address was shared to prevent further issues.
Launch of DECHAT and Listing on Exchanges
The new utility token of the protocol, DECHAT, was finally launched for trading on February 26. This token quickly found its way to listings on several reputable cryptocurrency exchanges such as KuCoin, Bybit, Gate, HTX, MEXC, and PancakeSwap.
Honeypot Frauds and Investor Threats
Varun4243 reported a loss of funds due to the erroneous honeypot link in Dechat and demanded compensation. Honeypot frauds pose an increasing threat in the world of cryptocurrencies due to the quick and easy possibility of their implementation. Creating a new honeypot contract can take as little as 30 minutes, facilitating fraudulent activities.
An infamous example is the honeypot scam related to the Squid Game token in November 2021, where developers stole approximately $6.38 million worth of locked BNB. Honeypot projects often simulate profits to investors, but in reality, the funds are locked and not tradable, posing a real risk of capital loss.
Summary
Honeypot scams are a serious issue in the cryptocurrency ecosystem, and investors should exercise caution when investing in new projects. The Dechat incident highlights how easily one can fall victim to such scams. It is always important to thoroughly check contracts and links before deciding to invest funds in a new cryptocurrency project.
