Dex Screener Boost Report: Are Boosted Tokens a Trap for Crypto Traders?

A recent in-depth report has shed light on Dex Screener's boost system revenue model. The report accuses the DeFi analytics platform of profiting from paid boosts for hyped crypto tokens, often linked to pump-and-dump scams. According to the findings, this model seems tailor-made for pump-and-dump schemes, enabling project developers to amplify token visibility while leaving cryptocurrency investors at a significant loss when trading the token.

The report was published on X (formerly Twitter) by the investigative account Dethective, known for exposing scams and crypto frauds. Dethective analyzed the performance of Dex Screener boosted tokens, tracking snapshots of their market performance at specific intervals. The findings revealed concerning trends in these tokens' profitability and how the Dex Screener boost system impacts traders.

Dex Screener Boosting System: How Paid Token Promotions Work

Dex Screener is a DeFi analytics platform offering tools to track and analyze real-time data across blockchains, supporting token launch strategies and helping traders monitor cryptocurrency token trends. Supporting over 80 blockchains, such as Ethereum, Solana, and Base, and over 100 decentralized exchanges, such as Uniswap and PancakeSwap, it has become a go-to for monitoring cryptocurrency token activity.

Earlier this year, Dex Screener introduced the boost feature—a paid system that increases a token's trending score. For $3,999, a 24-hour boost amplifies a token’s visibility on Dex Screener, marking it with a golden highlight to stand out. Boost durations range between 12 and 24 hours, offering significant exposure to new or hyped tokens.

Boosted tokens. Source: https://dexscreener.com/

However, the report suggests this visibility comes at the cost of retail investors, who often bear the brunt of losses.

Dex Screener Boost Report: Key Findings on Boosted Tokens’ Performance

The data collected by Dethective uncovered key points about boosted tokens:

1. Average Returns Are Negative: Tokens boosted on Dex Screener had an average return of -48%, meaning investors lose nearly half their capital on such trades.
2. High Boosts Correlate with Losses: Crypto projects that purchased over 3,000 boosts showed a consistent loss in token value during the reporting period.
3. Success Lies in Fewer Boosts: The most successful tokens had relatively fewer boosts, typically in the range of 600 to 1,000 boosts.

Performance of top boosted token in the report. Source: https://x.com/dethective/status/1867646889254170649

These findings highlight a pattern where heavily boosted tokens tend to underperform. According to Dethective, the boosting feature creates an attractive opportunity for pump-and-dump tokens to manipulate visibility, attracting unsuspecting investors.

How Dex Screener Boosting Impacts Crypto Investors: Risks and Losses

The report reveals how the boosting mechanism aligns with cryptocurrency pump-and-dump practices. When developers pay for a boost, they receive increased visibility during critical trading periods, such as token launches. During this boosted window, the highlighted token attracts significant attention from Dex Screener visitors.

While Dex Screener earns a substantial income from paid boosts, the tokens often experience sharp price drops once the boost period ends, or even during the boosting period. Insiders and developers can use the influx of liquidity to exit their positions, leaving retail investors with steep losses.

The report raises concerns about the platform's revenue model, which relies on expensive boosts, benefiting developers but hurting traders who fall for hyped tokens.

Dethective’s Report Recommendations for Navigating Dex Screener Boosted Tokens

Dethective concluded the report with key takeaways for those engaging with Dex Screener trending tokens:

• Avoid tokens with more than 3,000 boosts.
• Tokens with fewer boosts (well below 3,000) are less likely to serve as exit liquidity for insiders.
• Dex Screener, Pumpfun, bots, and KOLs consistently profit, while retail investors are losing.

Dethective’s recommendations emphasize avoiding heavily boosted tokens, as they often serve insider interests over retail investors and pose an extremely high-risk gamble for crypto traders.

Conclusion: Are Dex Screener Boosted Tokens Worth the Risk?

Crypto trading remains inherently risky, and most investors face significant chances of losses, with or without boosted tokens. In our view, the report by Dethective misses a critical dimension: a direct comparison between boosted and non-boosted tokens on Dex Screener. Nevertheless, the report highlights how Dex Screener's boost system may enable pump-and-dump schemes, potentially causing significant financial losses for retail investors. This is an important issue we believe is worth sharing with our readers.

Dethective’s investigation into Dex Screener boost practices highlights the risks for crypto traders when engaging with boosted tokens. While the crypto platform provides valuable tools to track and analyze real-time data across blockchains and decentralized exchanges, its boost system raises ethical concerns according to the latest report. Retail investors are advised to approach boosted tokens with caution and prioritize due diligence before investing.