When interacting onchain, ensuring the legitimacy and trustworthiness of digital assets is paramount. At Kraken Wallet, a self-custodial web3 wallet that supports multiple blockchains and allows users to send, receive, and interact with onchain applications, we’ve made a strategic decision to implement the Token List standard introduced by Uniswap. This choice reflects our commitment to providing our users with a secure, transparent, and decentralized approach to managing crypto assets. In this blog post, we’ll explore what Token Lists are, why they’re crucial for the crypto ecosystem, and how they benefit both wallets and users.
Understanding Token Lists
Token Lists, introduced by Uniswap in 2020, are a community-led initiative designed to improve the discoverability and trustworthiness of ERC20 tokens on decentralized exchanges. At its core, a Token List is a JSON file that follows a standardized schema, containing essential information about a curated set of tokens. These lists can be hosted on decentralized platforms like ENS (Ethereum Name Service) and IPFS (InterPlanetary File System), as well as traditional HTTPS servers such as Github.
The Token List standard boasts several key features that make it a powerful tool in the crypto ecosystem. At its core, it embraces decentralization, allowing anyone to create and maintain a Token List, which fosters a truly open ecosystem. Transparency is another crucial aspect, as these lists are publicly accessible and adhere to a standard format, making them easy to verify and audit. The standard also promotes inclusivity, enabling multiple lists to be combined or used simultaneously by interfaces. This flexibility allows for a comprehensive view of the token landscape, as different lists can be aggregated to provide a more complete picture of the crypto asset environment. These features collectively contribute to a more robust, transparent, and user-centric approach to managing and discovering tokens.
The Power of Decentralized Reputation
By adopting the Token List standard, Kraken Wallet taps into a decentralized network of list maintainers, each contributing their expertise and reputation to the ecosystem. This approach offers several advantages over centralized curation:
- Diverse Expertise: We benefit from the collective knowledge of various projects, researchers, and analysts in the crypto space.
- Rapid Updates: As new legitimate tokens emerge, they can quickly gain recognition through reputable lists, ensuring our users have access to the latest information .
- Reduced Bias: By relying on multiple sources, we mitigate the risk of a single entity’s biases influencing token selection.
- Scalability: The decentralized model allows for efficient scaling of token curation, which is crucial in the rapidly changing crypto market.
- User Preference: Users can make their own determination which sources they choose to trust.
Building Trust Through Aggregation
One of the most powerful aspects of the Token List standard is the ability to aggregate multiple lists, and at Kraken Wallet, we leverage this feature to create a robust trust model for crypto assets. Our approach involves subscribing to multiple reputable Token Lists maintained by trusted entities in the crypto space.
For example, on Solana, we utilize the Jupiter - Strict list, while for Ethereum, we incorporate lists from Uniswap, 1Inch, Zerion, and Aave. Additionally, we’ve created our own token list that includes all tokens listed on Kraken’s centralized exchange across all supported chains.
By aggregating these lists, we create a comprehensive database of tokens that serves as a foundation for our user interface. However, we don’t employ a scoring system. Instead, we present information to our users in three distinct categories. First, we show whether a token appears on any of the reputable lists we’ve aggregated, and if so, which specific lists include it. This allows users to make informed decisions based on the reputation of the list maintainers. Second, if a token isn’t present on any of our aggregated lists, we make this clear to the user, empowering them to conduct their own research and make their own determination about the token’s trustworthiness. Lastly, we identify tokens that are likely to be spam, based on information from negative token lists and third-party API providers conducting due diligence. It’s important to note that we don’t definitively label any token as spam, as we acknowledge the possibility of error. Instead, we present this information as a tool for our users to filter potential spam, always encouraging them to exercise their own judgment.
This multi-faceted approach allows us to provide valuable information to our users while harnessing the “wisdom of the crowd,” respecting the decentralized nature of the crypto ecosystem, and maintaining high standards for token quality and legitimacy—all while emphasizing the importance of individual decision-making.
Enhancing User Safety
At Kraken Wallet, protecting our users from scams and fraudulent tokens is a top priority. The Token List standard is instrumental in this effort. By relying on curated lists from trusted sources, we significantly reduce the likelihood of scam tokens deceiving our users. The transparent nature of Token Lists allows us to educate users about which tokens are considered trustworthy, fostering a more informed user base. Additionally, users can personalize their risk management by choosing to interact only with tokens that meet specific trust criteria like a token that is on more than 1 reputable Token List.
User Interface and Filtering Options
We’ve implemented several features in the Kraken Wallet interface to help users navigate token reputation:
- By default, we filter out ‘likely spam’ tokens from the main asset view, reducing clutter and potential risk. However, a user can change this filter and include “likely spam” as they have ultimate control over their assets.
- Users have the option to filter out ‘unlisted tokens’ if they prefer to see only tokens with established reputations.
- In the main asset view, “unlisted tokens” are marked with a small (!) icon, indicating that they don’t have an established reputation yet.
- When viewing individual token detail pages, users can see specifically which token lists include that token and can navigate to the source material for further investigation.
These features empower users to make informed decisions based on their risk tolerance and research preferences.
Empowering the Community
Our adoption of the Token List standard reflects our commitment to community-driven initiatives. This open standard encourages the development of new tools and services, fostering innovation within the crypto ecosystem. Token Lists’ interoperability improves the overall user experience by allowing easy sharing and use across different projects. Moreover, we empower our users to actively contribute to the ecosystem by creating and maintaining their own lists or participating in community-governed list curation, further decentralizing the process of establishing token reputation.
Conclusion
At Kraken Wallet, our decision to implement Uniswap’s Token List standard reflects our commitment to providing a simple, secure and powerful Wallet platform. By leveraging a decentralized network of list maintainers, we ensure that our users have access to reputation signals on a wide range of legitimate tokens while minimizing exposure to scams and fraudulent assets.
The Token List standard represents a significant step forward in building decentralized reputation systems for crypto assets. It allows us to combine the expertise of multiple trusted sources, creating a more robust and reliable method of token curation. As the crypto ecosystem continues to evolve, we believe that community-driven standards like Token Lists will play an increasingly important role in fostering trust, transparency, and innovation.
Looking ahead, we anticipate a much broader set of issuers maintaining these lists. It could be an excellent opportunity for content creators to maintain these lists as part of their coverage of the crypto space. If you are maintaining a high-quality token list across Ethereum, Polygon, Base, Optimism, Arbitrum, or Solana, we encourage you to reach out. Your contribution could play a vital role in shaping the future of decentralized token reputation.