Vampire Attack

In the realm of cryptocurrency, a “vampire attack” is a cunning strategy employed by one blockchain or decentralized project to siphon users and liquidity away from another. Here’s how it works:

First, the attacker identifies a target project and creates a new project. The attacker enhances the new project with alluring incentives, like higher yields, lower fees, or enticing token rewards, which beckon users and liquidity away from the target. As a result, the target project can suffer a loss in activity, liquidity, and value. One of the most famous vampire attacks in the DeFi space was when SushiSwap executed a vampire attack on Uniswap in 2020. Sushi Swap lured over $1 billion in liquidity within a week by incentivizing Uniswap’s liquidity providers to migrate to its platform, offering attractive rewards in SUSHI tokens.

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