Everyone who has spent time in crypto has experienced dust – small amounts of a cryptocurrency that are not worth the gas needed to do anything with. Dust is remnants of past decisions, telling a story of the various projects the wallet owner once believed in. With the permanence of the blockchain, those cryptocurrencies will most likely always be there, forever a reminder of what could have been.

Besides residual tokens, many will also notice dust in the form of random tokens that were never purchased. Sometimes, this can be promotional. It’s a way for a project to spread awareness of itself to a lot of people at once and build its holder count. Other times, dust can appear with bad intentions.

Deanonymize Wallets

Dust attacks can be used to deanonymize wallet addresses by finding connections between wallets. Wallets can use different send and receive addresses so if the coins are sent, the two addresses can be linked. This is often done with coins already present in the wallet such as Litecoin or Bitcoin so the dust amount is unnoticed.

This can be avoided by not spending the dust. Several wallets offer the ability to mark the coins received in the transaction as “Do Not Spend” to avoid any potential issues.

Malicious Code

Another way dusting attacks are used is by airdropping tokens with malicious code to numerous wallets. Since tokens are just smart contracts, the goal is for the user to interact with the token, giving permission for the code in the smart contract to run. The code runs a drain() function which empties the wallet, leaving the holder with nothing.

The malicious tokens sometimes use names similar to well known tokens in an effort to induce an interaction. This can happen when a token is undergoing a contract migration because the community is uncertain about what they need to do. They are expecting a new token in their wallet so they are more likely to interact with tokens that suddenly appear in their wallet.

Other times, it can represent a honeypot, or a token that can not be sold but holds a high value when observing the chart. This can entice unsuspecting users to enable the token with the hopes of free money.

To avoid this type of exploit, it is important to not interact with unknown tokens. Remember that if it looks too good to be true, it probably is.

If you had previously enabled a token that you are unsure about, you can also revoke access to it. There are various tools available that can tell you what tokens have been given permission in your wallet and remove the access.

Key Takeaways

As more people get into crypto, more people will be exposed to potential vulnerabilities. Taking the time to learn about the different methods bad actors use is the best way to protect yourself in the future.

Don’t interact with tokens you didn’t acquire yourself. If you have interacted with dust in the past, check your token approvals and revoke any you are uncertain about. Double check contract addresses to verify that the token is legitimate. Bad things can happen when you act too quickly.

The best rule of thumb is to remember that nothing comes for free. Be vigilant and understand what is going on when you do anything with your cryptocurrency in DeFi.