SADPonzi: Detecting and Characterizing Ponzi Schemes in Ethereum Smart Contracts

Weimin Chen, Xinran Li, Yuting Sui, Ningyu He, Haoyu Wang, Lei Wu, Xiapu Luo

Research output: Journal article publicationJournal articleAcademic researchpeer-review

1 Citation (Scopus)

Abstract

Ponzi schemes are financial scams that lure users under the promise of high profits. With the prosperity of Bitcoin and blockchain technologies, there has been growing anecdotal evidence that this classic fraud has emerged in the blockchain ecosystem. Existing studies have proposed machine-learning based approaches for detecting Ponzi schemes, i.e., either based on the operation codes (opcodes) of the smart contract binaries or the transaction patterns of addresses. However, state-of-the-art approaches face several major limitations, including lacking interpretability and high false positive rates. Moreover, machine-learning based methods are susceptible to evasion techniques, and transaction-based techniques do not work on smart contracts that have a small number of transactions. These limitations render existing methods for detecting Ponzi schemes ineffective. In this paper, we propose SADPonzi, a semantic-aware detection approach for identifying Ponzi schemes in Ethereum smart contracts. Specifically, by strictly following the definition of Ponzi schemes, we propose a heuristic-guided symbolic execution technique to first generate the semantic information for each feasible path in smart contracts and then identify investor-related transfer behaviors and the distribution strategies adopted. Experimental result on a well-labelled benchmark suggests that SADPonzi can achieve 100% precision and recall, outperforming all existing machine-learning based techniques. We further apply SADPonzi to all 3.4 million smart contracts deployed by EOAs in Ethereum and identify 835 Ponzi scheme contracts, with over 17 million US Dollars invested by victims. Our observations confirm the urgency of identifying and mitigating Ponzi schemes in the blockchain ecosystem.

Original languageEnglish
Article number26
Pages (from-to)1-30
JournalProceedings of the ACM on Measurement and Analysis of Computing Systems
Volume5
Issue number2
DOIs
Publication statusPublished - Jun 2021

Keywords

  • ethereum
  • Ponzi scheme
  • smart contract
  • symbolic execution

ASJC Scopus subject areas

  • Computer Science (miscellaneous)
  • Computer Networks and Communications
  • Hardware and Architecture
  • Safety, Risk, Reliability and Quality

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