Any asset evaluation system must be adaptable enough to change along with blockchain technology's ever-evolving condition.
Because of this, Coinbase created our own secure trait analyzer, a threat detection tool that prioritizes safety and warns you if a token may endanger you or your cryptocurrency.
The threat software offered by Coinbase automatically scans tokens on all blockchains it supports and identifies any that have been programmed with software (also known as smart contracts) that might potentially harm Coinbase users. The secure trait analyzer examines smart contracts for specific patterns (known as code signatures) and compares them to our database of code signatures from previously examined smart contracts. The software will be able to distinguish between safer and riskier currencies more quickly the more smart contracts it examines.
The Listings team has so far used this automated method to identify over 700 tokens that did not meet our security requirements because of serious concerns including a single person being able to automatically take users' money or drain account balances without warning. The proprietary software has also helped us identify potentially serious backdoor vulnerabilities, such as those that may be used for rug pulls, in about one out of every four smart contracts that have been analyzed.
The team will request that project teams take the required safety measures to reduce risk when the software identifies anything hazardous. If they don't, the team won't list their tokens.
Additional security is provided by a thorough study
In order to safeguard our consumers, they carry out various types of meticulous due diligence in addition to screening smart contracts with Coinbase's threat detection tools.
This requires performing in-depth research on the goal, milestones, and key contributors of the project in order to assure compliance with the law and identify any possible connections to unlawful behavior.
To get the most complete picture of all assets that are taken into consideration for listing, this software also performs on-chain and off-chain analyses of quantitative and qualitative signals, including historical token prices and trading volume, ownership, and vesting schedules, investment and financing history, market capitalization, community sentiment, technical roadmap, and details about how tokens are earned, burned, and distributed.
Going further: Protecting users from dishonest actors
In addition to security checks, Coinbase takes additional measures to protect our customers from fraudsters.
Coinbase expanded its ability to find even more factors that could potentially affect Coinbase customers early this year by introducing a fraud detection approach. When they review project whitepapers or analyze token smart contracts, their research may not immediately reveal consumer and business risks, such as well-known project participants with a history of questionable business practices or substantiated allegations of pump-and-dump.
The Listings team has determined not to publish about 100 projects that incorporate tokens because they consider they are high risk since implementing this additional layer of protection.
The most reliable platform for buying, selling, and exchanging digital assets is Coinbase. While we work to legally list as many assets as we can, keeping our users secure comes first. The coinbase team added, "We've heavily invested in systems and procedures that identify potentially dangerous assets, and we'll keep working to keep all Coinbase users secure."
Conclusion
As a result of its stringent security measures and proactive commitment to compliance and regulation, Coinbase has established itself as a reputable and reliable platform for bitcoin dealers and investors. While there are Coinbase clone script available that attempt to replicate its success, it is critical to only utilize certified services like Coinbase for bitcoin trading.
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