By, Dikla Barda, Roman Zaikin and Oded Vanunu
The Dingo Token, currently ranked #774 with a market capitalization of $10,941,525 USD, has been flagged as a potential scam by Check Point Research (CPR). The project’s owner reportedly used the “setTaxFeePercent” function to manipulate the buying and selling fees to an alarming 99%, potentially putting investors at risk of losing all their funds. These findings were quickly brought to the attention of the crypto community by CPR, who promptly launched an investigation and issued a warning to potential investors.
We all know that 2022 was a hard year in the crypto market. However, when we saw a token raised by 8400% this year, we had to investigate the project and understand what was unique about it. We examined the Dingo Smart Contract and quickly found it seemed like a scam.
The project website contains no real information about the owners of the projects. There is only a simple four page white paper that shows the project “tokenomics,” stating that there is only a 10% fee per transaction.
We looked at the smart contract source code and found there is a function titled “setTaxFeePercent”. This function allows the owner to change the contract’s buy and sell fee:
The function was used 47 times and at the moment of writing, the owner changed the taxFee to 99%.
As can be seen in the following transaction:
Let’s look at a buy transaction for example:
In this transaction, the user bought $26.89 and received 4.27M dingo tokens back, exactly 1% percent of the amount invested:
Now let’s look at the transaction in tenderly.io:
In the _tokenTransfer function the takeFee is set to True for this wallet 0x7173fad8276b25fb50d1af826222bfb2fa5e1557 address.
In the following image the transfer amount is calculated:
It will subtract the taxFee (95%) and the LiquidityFee (4%) as shown in the following screenshots.
The calculation of the taxFee:
The LiqudityFee fee:
95% taxFee + 4% LiquidityFee totals a 99% fee on any transaction, allowing the contract to steal the funds.
Check Point Research (CPR) warns crypto users that there are various ways scammers can create scam tokens and hack contracts. It is important for consumers to be careful with the tokens they buy.
Conclusions and recommendations for crypto users:
It’s hard to ignore the appeal of crypto. It’s a shiny, new and promises to change the world. If prices continue their upward trajectory, people have an opportunity to gain a significant amount of money. However, cryptocurrency is a volatile market. Scammers will always find new ways to steal your money using cryptocurrency and new forms of crypto are constantly being minted.
If you’ve incorporated crypto into your investment portfolio or are interested in investing in crypto in the future, you should make sure to only use known exchanges and buy from a known token with several transactions behind it.