2024-02-26 13:03:24
The so-called vampire attacks can be new, aggressively expanding crypto projects, but we also include those attacks when malicious actors target already existing project communities.
In crypto terms, we call it a vamp attack when a new project offers better incentives or higher profits than the original. The goal of an “attacking” project is to overtake another project with very similar characteristics, but it can also be called a vampire attack, when the project seeks to steal competitors’ resources and customers that provide critical liquidity.
The attack often involves a decentralized finance (DeFi) protocol or decentralized application that offers better prices for the same service than a given competitor. Such an event can often result in the loss of liquidity or even the complete failure of the other project, as the new project practically “sucks the life” out of the competitor – that’s why these events are called vampire attacks.
It’s also worth noting that attacks aren’t necessarily scams or inherently malicious, in many cases they represent an aggressive and highly competitive growth strategy.
How does such an attack work?
Certain projects are more likely to suffer a vampire attack: for example, those that rely heavily on users and liquidity, and those that have high liquidity. These projects include decentralized exchanges and NFT marketplaces.
In addition, “offensive” projects can also target already established communities, into which they can lure users. Projects with high fees and a lack of innovation are also attractive targets, as the new project can undercut the old one and offer better features and incentives. After that, the project’s only task is to keep the users who have been lured over.
This is how you can protect yourself against vampire attacks
The easiest way for crypto projects to defend against less aggressive vamp attacks is to use appropriate incentives remain competitiveand reward loyal users with the best possible features.
However, there are more specific measures that a project can take to protect users and liquidity. These include so-called lock-in periods that prevent users from withdrawing their crypto after taking advantage of the incentives, thus ensuring their commitment to the platform. Likewise, it’s a good idea to have limits on how much users can withdraw within a given period of time – this will discourage mass withdrawals.
It is also worth noting that the provision of voting rights promotes the involvement of users in management, increasing loyalty. In addition, the security checks, community building and maintaining the project’s image strengthen the project’s appeal and credibility, making it more resistant to potential vampire attacks. Together, these strategies strengthen user engagement and trust, which are essential for the long-term success of decentralized platforms.
Otherwise, crypto owners and investors can protect themselves against vampire attacks by being aware of the tactics of the new project: for example, the new decentralized exchanges offer very high incentives in exchange for liquidity.
Published on the BitcoinBázis page.
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