Algorand Scam Detector: flagging scam transactions on Algorand
Algorand thrives compared to other blockchains because of it’s low transaction fee (0.001 ALGO per txn) and instant finality. However, these traits also has some downsides if you talk about the ‘dark side’ of blockchain & crypto.
We noticed the past couple of months a sudden surge in scam transactions to any wallet that was created on the Algorand blockchain. These scam transactions are not harmful by itself, as no wallet can be drained just by receiving such transaction. But interacting with the information in the note, could be.
Since 15th of February 2024, we registered a total of 4.2M scam transactions (and we believe there are more, as our systems got better over time). This has to be battled!
The looks of a scam transaction
Scammers have several bots active where they send small amounts of ALGO to literally hundreds of thousands of wallets. Owners of these wallets receive these transactions within their wallet app or explorers. These transactions mostly have a note, such as:
USDC Reward. You can claim here. {LINK TO MALICIOUS WEBSITE}
Scammers have copied over entire websites, such as Folks Finance, Tinyman, Fry Foundation, Opulous, Pact. And to an extent, even older platforms such as Yieldly. The only thing they do is send out those transactions with malicious notes and wait till customers eager to receive extra rewards, go to the malicious site and connect their wallet.
That’s the moment the wallet gets drained automatically and users will lose their funds.
Introducing the Algorand Scam Detector
Within Chaintrail we already baked in a scam detection algorithm for our new Scam Insights. With this we’d be able to know better how scam transactions are evolving on Algorand blockchain.
However, detecting is one thing. Preventing it from doing harm would be even better. And that’s where the Algorand Scam Detector comes in. We developed an easy to use (open & free) API for any dApp to know whether a transaction is considered a scam or not. This could either be on basis of a malicious note or simply a malicious wallet address.
You can use it directly as a free API (without limitations): https://scam-detector.chaintrail.io/
And we’ve open-souced it as a Github repo (so you can host your own API if you’d like): https://github.com/ChainTrail/algorand-scam-detector
The API also has an easy to view explainer page, which you can adjust to your own look and feel. So that customers can understand what a scam is and what not to do with it.
Right now — the Algorand Scam Detector is integrated in Algorand’s most popular wallet: Pera Wallet & Explorer, Allo Explorer, Blockpack & Chaintrail. We’re working actively to get it covered on all explorers and wallets, to prevent scams from doing any further harm.
Combining strong algorithms with AI
We use a strong combination of algorithms and AI to detect whether new transaction notes could be considered a scam. Each and every decision that’s made by the system, is peer-reviewed by a human being. So we can detect false positives very early and course correct where necessary.
Unfortunately, we can’t open-source our detection algorithms & the works with AI. As otherwise we’d provide too much information for current and potential new scammers trying to bypass our system.
Going for an on-chain scam free environment
We strive with the Algorand Scam Detector to make Algorand on-chain a scam free environment. By improving the Algorand Scam Detector and getting it integrated in all sorts of projects, dapps & wallet/explorers. We hope that we can bring down scam activity to a hold.
If you like what we’re doing and if you’re an xGovernor. Consider voting for xGov-184. This will help supporting the development of new initiatives such as the Algorand Scam Detector & RWA Insights on Algorand.
