PRIA: A rugproof DeFi investment
Uniswap
Uniswap is a Decentralized Exchange (“DEX”) that allows buyers and sellers to swap ERC20 tokens without the use of an exchange or order book. Using a DEX is simple, they don’t require an account, personal details, or KYC like many traditional Centralized Exchanges.
Uniswap and other DEXs use an algorithmic equation for determining the swap rate automatically, based on the balances of both tokens, as well as the actual demand for this swapping pair. The balances of each tokens are added to a pool in Uniswap by people we call “liquidity providers”. As tokens are traded (or “swapped”), the balances of both tokens change and so does the price.
Obviously, the changing balances and changing prices present earning opportunities for some, but the nature of liquidity pools also mean that they can be risky.
One of the often experienced risks is known as a “rug pull”, and unfortunately, the number of the so-called “rug pulls” is on the rise.
Rug Pulls
Maybe the most well known rug pull was by SushiSwap (SUSHI), the governance token of a competitor to top decentralized exchange, Uniswap, which dropped over 80% almost suddenly in the beginning of September this year. The creator of the project sold all his profits for a $14 million payout in ETH.
The rug pull sees the scammer set up liquidity in the pool only to pull it out after some time leaving unsuspecting holders with severe losses.
Today, another rug pull shocked the crypto community.
KORE (kvault.finance), a CORE fork that was launched two weeks ago, which focused on profit-sharing rug pulled. They were audited on launch, had multiple working pools, were advertised by big names in the branch and had unique features. On the surface, it seemed legit. But, like many others, they cheated and escaped with a lot of money in the end.
Rug pulls are doing a major disservice to the entire DeFi space and crypto community as a whole. Leaving people with great losses and sometimes leaving people financially ruined.
The last few months have seen so many rug pulls it’s difficult to count. The sheer number of them makes investing in DeFi a scary and dangerous prospect for a lot of people.
How to protect yourself from “rugs”
Investors need to be extremely careful and selective when it comes to the tokens they put their money into. Always make sure to check whether or not the liquidity is locked.
The most common way that reputable teams lock their pooled liquidity is through Unicrypt. It ensures that any liquidity locked in the pool by the team cannot be removed for a certain period of time. Understandably, locking liquidity in this way gains additional user confidence and trust.
It’s very easy to verify whether or not liquidity for a particular pair is locked and the date that it is locked until. All of this can be done on the Unicrypt website.
PRIA, a rugproof project
PRIA, on the other hand, is a revolutionary token launching around the same time as KORE, being one of the most credible projects in the DeFi space today. Building credibility isn’t something that happens overnight. It’s a long-term goal.
At launch, the owner address of PRIA had 25% of the total supply and the remaining was spread out through various market participants, so PRIA already had from the beginning a higher degree of pool decentralization, thus reducing the “perceived” rug pull risk.
That risk was practically eliminated on October 29th, when PRIA liquidity was locked with Unicrypt. As of right now, 49.43% of the PRIA liquidity in Uniswap is locked for 2 years. This was 100% of the deployer liquidity at the time of locking. For a rug pull to happen on PRIA now, the other LPs would have to pull their liquidity simultaneously. Even if that was to happen, this would be 51% of the total liquidity. This happening would be near impossible.
Below is a graphic showing the PRIA Uniswap liquidity providers. The blue part is the liquidity that was locked for 2 years.
In Summary
Always do your research and invest wisely, to avoid all the hassle and drama. Ensure that liquidity has been locked before investing and for the Love of God, be VERY careful when investing in clones!
The DeFi space needs original and innovative projects like PRIA, and PRIA needs a DeFi space cleared of fear and suspicions, in order to evolve.
If you’d like to explore the PRIA protocol you can visit the website and join our thriving Telegram community.
