Blockchain analytics firm Chainalysis has found that a majority of ERC-20 tokens listed on decentralized exchanges in 2023 exhibited on-chain patterns consistent with potential pump-and-dump schemes, but that each individual scheme tends to be relatively small in dollar terms. In its 2024 Crypto Crime Report analysis, Chainalysis identified roughly 90,408 tokens on Ethereum that met specific criteria suggestive of pump-and-dump behavior, such as initial market traction followed by a single address pulling more than 70% of the liquidity and leaving the token with minimal remaining liquidity. These tokens represented about 54% of all ERC-20 tokens listed on DEXs in 2023 and about 24.4% of all ERC-20 tokens launched that year, yet they accounted for only around 1.3% of total decentralized exchange trading volume on Ethereum. Despite the large number of suspect tokens, the economic footprint per token is comparatively modest. Chainalysis estimates that the actors launching these tokens collectively generated about $241.6 million in profit in 2023, but the average profit per token was just about $2,672. The findings underscore how the ease of creating ERC-20 tokens on Ethereum lowers the barrier for bad actors to deploy many small, opportunistic schemes rather than a few large ones. For retail traders, the report highlights that while most newly listed tokens may statistically show red flags associated with pump-and-dump dynamics, the aggregate impact is concentrated in a large number of small, illiquid tokens rather than in the main DEX trading markets, which see the vast majority of legitimate volume.

AI-generated background, compiled from web sources — not editorial content.

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