NitroShiba proudly presents Leash V1: The first ever automated, real time risk assessment system for liquidity locks
If you’ve been following us since launch, you’re probably aware by now that our main goal is not only to foster the largest community of meme loving friends on Arbitrum, but to provide the necessary tools to protect all ecosystem users from scams and fraud.
DeFi is a rapidly growing space that has presented a lot of opportunities for buyers, with Arbitrum now being one of its fastest growing networks. When a network grows, so does the number of projects wanting to launch and establish their presence in the market. While we welcome new projects wishing to build and deliver value to users, we must also recognise that many of those are only interested in one thing: taking users’ money and disappearing forever. These acts of fraud are better known in the space as rugs (rug pulls).
Avoiding these rugs requires a lot of time spent on due diligence and research into every single project that launches, and sometimes a lot of luck — we all know just how difficult it is to tell if a project is legitimate. Unfortunately, the way decentralised chains are built makes preventing rugs altogether an impossible task, but there are still ways to make it very difficult for dev teams to scam investors, and warn them of a potential rug.
The best way to ensure a team cannot rug its users is to confirm that the contract is verified and ownership of it is renounced, meaning that you can inspect its source code and verify that the contract doesn’t allow any specific addresses (like the owner) to use any special functions that nobody else can use. That’s usually how teams are able to rug.
Another crucial aspect is the token’s liquidity. Even if the contract cannot be used to rug, teams are still able to pull the liquidity they supplied and disappear with holders’ funds. The easiest way to prevent this is to lock the liquidity token (the token that allows its holders to pull liquidity from the liquidity contract) in a locker contract — a contract that does not allow withdrawals before a lockup period has passed.
We at NitroShiba have released such a locker contract and connected it to an easy to use app: nitrolocker.com. The app allows teams to lock up their liquidity tokens for long enough to protect their investors against such rug pulls.
But even if liquidity tokens are locked, not all locks are created equal. Some lock more tokens than others, some lock those for longer and some try to cheat the system by using very poor liquidity, leaving a clear backdoor into investor funds despite liquidity being locked.
There is a need for a much better system, one that does a better job of protecting investors and informs them of the overall risk involved with the liquidity aspect of a new token launch.
Today, we’d like to introduce to you such a system — Leash Protocol.
What is Leash all about? As the title suggests, it is an automated, real time risk assessment system for liquidity locks. The protocol automatically assesses several aspects of a liquidity pool locked in our dedicated locker contract and produces a single, easy to understand score that ranges from 0 to 100%. The formula has been carefully designed to make it very difficult for teams to score anything above 85–90%, and scores above 90% should be considered safe.
The way to use Leash is only in combination with a verified and fully renounced contract. If a contract is verified and fully renounced (meaning owner has renounced access to all special functions), and Leash reports a score over 90%, it is very likely that a launch is safe and very hard for a token team to rug you of your funds. Note that Leash does not guarantee the safety of a new token launch, but is an added layer of security that is very difficult to cheat.
Using Leash is also very simple: just go to nitrolocker.com and look for a liquidity token (LP) that’s been locked using the app. You’ll see a button called “Show LP Lock Health Score”. When clicked, it’ll automatically calculate the quality score of the liquidity token locked and present it to you in the 0–100% range. This is Leash Protocol doing a lot of math in the background and simplifying it to you using a single score. How cool is that?
Right now Leash only supports our locker, and only locks of Sushi LP tokens. We intend to support more types of tokens and more DEXs as they launch on Arbitrum. If you want your DEX supported by Leash, please join our telegram chat and contact us today!
See it in action: nitrolocker.com
Join us today: t.me/NitroShibaPortal
