🧨Concerns

Transaction Concern

Anyone can create a token and give it any name. A common practice is when scammers create fake tokens named after legitimate projects before launch. Also, it is a new project created to trick the community into token buying.
Victims buy fake tokens to make a profit without careful checking, but it will leave only worthless tokens with no way to convert them back to legitimate ones. Worse, it could be a malicious token that puts the rest of the funds in your wallet at risk.

Please visit the project documentation to verify the token address or ask for a verifiable source for new projects.
The UFO token contract address is as follows (To be announced after the token is released).

Front running is for the bot to monitor pending trades and pay a higher gas fee to trade at a price risk when placing a trade.
This is mainly happening for large trades that are profitable to the forerunners.

You can set a slippage tolerance to avoid trading at unwanted prices.
If you're submitting a large trade, you can break it up into several smaller transactions, making them less attractive to the leader and less likely to be in the lead.

The permanent loss represents the difference between the asset value you hold in AMM and the asset value you hold in your wallet. Providing liquidity to the liquidity pool results in permanent loss due to Automated Market Maker's rebalancing mechanism. The popular AMMs, including UFOSwap, run on the XYK model. Whenever a transaction occurs, the balances of both assets in the LP pool move along the XY=K invariant curve.
The value of assets can always go back to when they first provided liquidity, so permanent losses are only permanent. However, when liquidity is withdrawn from the LP pool, the permanent loss becomes permanent.
If you look at the graph below, you can see the relationship between the price difference of the two assets.

As IL is caused by the AMM of the XYK model running by default, there is no way to completely avoid the IL at this point.
However, users can minimize IL by choosing asset pairs that are highly price-correlated and tend to move together (i.e., stable coin/stable coin pair).
You can read more details in this article.(https://app.gitbook.com/s/-MkwEaSE6rdlxvuDyyIz-887967055/c/TjrthO6lXSqct5CQjZZ6/concerns)

Despite consistent reviews and investigations by our development team and third-party auditing firms, vulnerabilities may exist in our smart contracts.

Last updated 2 years ago