By Laxmikant Khanvilkar
Scammers hold many tricks under their hat to lure investors and empty their pockets! Oops! Wallets is the more appropriate word. In our latest understanding of rug pull series, we will try to understand “Hidden mints” – an effective dumping tool used by scammers.
Basically, a hidden mint, a hard rug pull technique, allows one or more externally owned accounts (EOAs) – in this context, the personal address(es) of the token’s deployers – to mint new tokens using a hidden function within the token’s contract.
After calling this function, the scammer dumps extra tokens on the market, which results in devaluing the tokens held by others. To devalue tokens, the scammers undertake a series of modifying activity to effect dumping process successfully. This process includes fake ownership renunciations to create impression of relinquished tokens, using hidden balance modifiers to modify token holders’ balances, hidden transfers to send tokes from user address to themselves, which is followed by hidden max transaction amount and hidden fee modifiers.
Fake ownership renunciations
In a fake ownership renunciation, the scammer deceptively encodes the impression that they have relinquished control of the token contract. The scammer maintains ownership, and is therefore still able to call sensitive, owner-only functions within the contract, like functions that can pause trading, mint tokens, or set fees.
Hidden balance modifiers
A hidden balance modifier allows one or more externally owned accounts (EOAs), or the token contract itself, to modify token holders’ balances. If the EOA sets holder balances to zero, this makes selling impossible, much like a honeypot.
Hidden transfers
A hidden transfer allows developers to send tokens from other users’ addresses to themselves. For e.g. Grab Chain token, which automatically adds buyer addresses to a custom-made array. Later on, the scammer calls a public function that is maliciously scripted to transfer all but one token from every buyer’s address to the token’s marketing wallet, which is controlled by the scammer.
Hidden max transaction amount modifiers
Hidden max transaction amount modifiers let developers establish maximum transaction values. The impersonation token SpaceX includes an intentionally misnamed function called burning that, when called, limits every user’s maximum transaction value to zero —except for the rug-puller.
Hidden fee modifiers
Hidden fee modifiers allow token developers to change the fee amounts collected when users buy and/or sell a token. Scammers can make this modification to trick users into unknowingly paying as much or sometimes even more than 100% of the size of their transfers in fees.
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