A vampire attack, also known as a vampire #mining attack or vampire swap, is a type of crypto scam in which a new decentralized exchange (DEX) offers liquidity providers (LPs) on an existing DEX a large incentive to switch their liquidity to the new DEX. This is done by offering a higher percentage of the trading fees on the new DEX to LPs. Once the LPs have switched their #liquidity to the new DEX, the attacker then drains the liquidity from the old DEX, leaving it essentially worthless.

The term "vampire" is used because the new DEX "vampires" away the liquidity from the old DEX.

Vampire attacks are a relatively new type of #crypto scam, but they have become increasingly common in recent months. In March 2022, for example, the DEX SushiSwap was the victim of a vampire attack by a new DEX called ForkDelta. As a result of the attack, SushiSwap lost over $100 million in liquidity.

Vampire attacks are a serious threat to the security of decentralized exchanges. They can cause significant financial losses to LPs and can also damage the reputation of the DEX that is attacked.

Here are some tips to protect yourself from vampire attacks:

  • Be wary of new DEXes that offer high incentives to LPs. These incentives may be a sign that the DEX is planning to conduct a vampire attack.

  • Do your research on new DEXes before you provide liquidity to them. Make sure that the DEX has a good reputation and that it is well-funded.

  • Only provide liquidity to DEXes that have a strong security track record.

  • Monitor your LP positions on a regular basis and be prepared to withdraw your liquidity if you see any signs of suspicious activity.

If you think you have been the victim of a vampire attack, you should contact the DEX that was attacked and report the incident to the authorities.