Rat trading and phishing addresses are indeed phenomena that we need to be very vigilant about in the cryptocurrency market. The following is a detailed explanation of these two concepts:
🐭 1. Front-Running
📚 Definition
Front running occurs when an insider or specific trader makes trades in advance to profit before knowing that a large buy or sell transaction is about to occur.
Commonly seen on decentralized exchanges (DEX), especially for low liquidity tokens.
⚠ How it works
Insiders learned in advance that a large purchase transaction was about to take place.
Before large transactions are executed, these people buy tokens in advance and then sell them for profit after the price rises due to the large buy orders.
Ordinary investors were therefore "harvested" and bought tokens at higher prices.
🛡 How to prevent it
Avoid participating in tokens with low liquidity and poor market depth.
Pay attention to the holding addresses to see if there are a large number of addresses making transactions in the same direction within a short period of time.
Use a more secure and transparent DEX platform for trading.
🎣 2. Phishing Address
📚 Definition
A phishing address is an address disguised as a legitimate wallet address or trading platform address by attackers to trick users into transferring funds to their control.
These addresses usually appear on the project's official website, social media, or trading pages.
⚠ Common methods
Fake website: Impersonating an exchange or wallet website to defraud users’ private keys.
Fake airdrops: claiming that users can receive free tokens, but require transfer or authorization.
Disguise the official address: insert a fake address into the transaction page to trick users into transferring funds by mistake.
🛡 How to prevent it
Never click on unfamiliar links, especially unverified links on social media.
Before transferring money, double-check the destination address.
Use official channels to download wallets and access exchanges.
Use blockchain analysis tools such as Etherscan or Solscan to check if the address has been flagged as a phishing address.
🔍 How to identify risks in images?
Observe:
Phishing Address
These addresses are flagged by the platform as potentially having a history of defrauding users.
If funds interact with these addresses, the assets may be stolen.
Front-Running
If large amounts of funds are found to be frequently operated at a specific address (such as buying and selling in advance), it may be a case of insider trading.
Usually associated with whales or insiders.
🚨 Recommended Actions
Closely monitor the holding addresses Use on-chain analysis tools to check the fund flow of the top 10 addresses.
Avoid direct interaction with phishing addresses If the platform has marked certain addresses as phishing addresses, avoid interacting with them.
If you plan to trade this token, try it with a small amount first to avoid investing a large amount of money at one time.
Be alert If you notice unusual trading patterns or fund transfers, withdraw immediately.
✅ Summary
Insider trading: It is mainly the risk of market manipulation, which causes ordinary investors to passively buy high and sell low.
Phishing addresses: direct financial security risk, once interacted with, assets may be irrecoverable.
Recommendation: If you find obvious characteristics of insider trading or phishing addresses, it is best to wait and see and avoid participating in transactions of the token.