Uniswap targeted by phishing scams as protocol struggles with user retention

• Scammers use Uniswap’s name to attract unsuspecting victims. 
• Overall activity on the network fell as user retention declined.

Uniswap [UNI] has been dominating the DEX space for quite some time and has established its authority over the market. Due to its popularity and efficiency, the name Uniswap has garnered the trust of its users in the crypto space.

Read Uniswap’s [UNI] Price Prediction 2023-2024

However, some scammers have been using Uniswap’s brand for their personal gains.

Something phishy

According to AegisWeb3, a new type of scam has emerged, which resulted in over 800 victims and asset losses exceeding $1.8 million.

The scam involves a phishing site that tricks users into approving tokens for the “Uniswap Protocol: Permit2” contract, which appears harmless.

However, the next step involves a signature request to transfer tokens to the scammer, resulting in a complete loss of approved assets by the victims

The number of victims affected by this scam has been reportedly going up.

Despite these phishing scams, the overall outlook of the crypto community towards Uniswap was positive.

This was showcased by the growing weighted sentiment for Uniswap. But if the scams continue, then the sentiment around Uniswap could be affected negatively.

Source: Santiment

A look at the protocol

According to token terminal’s data, the daily active users declined by 12.5% over the last month. The decline in activity affected the fees generated on the network as well.

Source: token terminal

The protocol was also having a difficult time with retaining users.

Dune Analytics’ data suggested that user retention on the Uniswap protocol fell significantly across all chains over the last few months.

Source: Dune Analytics

Coming to the UNI token, its prices fell materially over the last month.

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Additionally, the network growth of the token also fell. This indicated that the number of new addresses transferring UNI for the first time reduced.

The velocity of the UNI token took a hit as well. This implied that the frequency with which UNI was being exchanged amongst addresses plummeted.

Source: Santiment