Dissecting Ponzi schemes on Ethereum: identification, analysis, and impact
This work addresses the issue of financial fraud for cryptocurrency users and researchers, but it is incremental as it builds on existing knowledge by applying analysis to a new platform.
The paper tackles the problem of identifying and analyzing Ponzi schemes on Ethereum, providing a comprehensive survey that examines their behavior and impact from multiple perspectives.
Ponzi schemes are financial frauds which lure users under the promise of high profits. Actually, users are repaid only with the investments of new users joining the scheme: consequently, a Ponzi scheme implodes soon after users stop joining it. Originated in the offline world 150 years ago, Ponzi schemes have since then migrated to the digital world, approaching first the Web, and more recently hanging over cryptocurrencies like Bitcoin. Smart contract platforms like Ethereum have provided a new opportunity for scammers, who have now the possibility of creating "trustworthy" frauds that still make users lose money, but at least are guaranteed to execute "correctly". We present a comprehensive survey of Ponzi schemes on Ethereum, analysing their behaviour and their impact from various viewpoints.