A vampire attack is the process of convincing people to jump ship from the services that a competitor offers to your platform. This has been done by multiple Blockchain-based platforms like Sushiswap and LooksRare. An attempt may involve a crypto platform offering better rates to those who use their competitors’ services.
A vampire attack aims to access three significant features of popular protocols: their users, liquidity, and trading volumes. Sushiswap did this to UniSwap. It offered a better rate than UniSwap, convincing people to pull out their liquidity from the former and put it on Sushiswap.
When Sushiswap began, the crypto platform decided to undergo a vampire attack on the popular AMM in existence, UniSwap. To do this, it offered its native tokens- SUSHI- to liquidity providers. At that time, users also had access to high APR on the platform, reaching up to 1000% APR.
By doing this, they could also gain over $150,000,000 of value in tokens in liquidity within a short while.
Vampire attacks in crypto may seem like a bad thing to the protocol that is being targeted, but it benefits the users. This type of attack increases competition for users, thereby making these projects increase their benefits to users.
Though this may seem beneficial to users, it also has its bad side. If unscrupulous platforms make a vampire attack, it could lead to people losing their funds. For instance, the founders may decide to carry out a rug pull and dump large coins, which crashes the coin’s value.
Sometimes, it ends in investors taking out their crypto from a great platform to a project run by some scammers. As always, do your research before jumping ship.