We Explain Here As To Why Rug Pulling Incidents Threaten The Future of Defi. We expose 12 Defi Con Artists.
Why are Defi con artists being exposed? What do they have to contribute to the future of Defi? Read all about it here.
The Defi Scene Currently
It has naturally seen many more investors moving funds to decentralised protocols as the ongoing hype about the abnormally high returns from Defi tokens. The total value locked in Defi protocols was nearly $11 billion as of October 10. Rug pulling incidents and outright scams now seem to be blighting this space despite this apparent endorsement of Defi.
Also, the fact is that on the growing popularity of those Defi protocols as well as exposing those facts that some devs and founders are wilfully engaging in practices that are harming the interests of the burgeoning Defi community was reported.
SBF’s Actions Were Not Approved by the Community
Thereby being accused of acting immorally was Sam Bankman Fried (SBF), who was the individual that took over the reins at SushiSwap in early September. As collateral for short selling other assets, the allegations stem from SBF’s use of FTT which is a centralised token. Reports suggest the matter will be resolved via a vote which ends October 14 as it has emerged that SBF’s actions were not approved by the community.
Critics are making the argument that if economically rational market participants such as SBF can take advantage of these tools in a way that the community doesn’t approve of as the immaturity of both the market and its users are revealed however before the vote is even closed.
Defending his actions, he is not only influencer getting panned or using a privileged position to enrich himself is SBF. Hereafter another prominent individual that has been criticised as the first for actively promoting Andre Cronje’s botched EMN even before it got hacked was Blue Kirby, the YFI fanboy. When the Defi token suffered losses in the past few weeks, secondly, Kirby faces accusations of dumping his YFI.
12 Defi Con Artists Exposed
Where influential individuals are caught acting contrary to the values they publicly espouse the complaints against SBF and Blue Kirby are just two of the many cases. Subsequently, it was known that Defi con artists are thereby not only exposed after making off with millions of dollars in investor funds in many cases. Listed below are some Defi projects or tokens thereby according to Boxmining newsletter that has turned out to be scams.
After collecting 2,500 ETH from investors, it was rug pulled. Finally, the Amplyfi.money team has also claimed that one of the devs compromised the wallet and was able to use a little-known vulnerability in the complier itself according to the message left on the website. They decided to terminate the project as it adds that devs are receiving a fair amount of threats.
Beer Garden Finance:
The founder holds over 50% of the token supply in his personal wallet according to the newsletter. They were banned from the Telegram group when the community was asked for more details such as a Github link for the project or timelocks for the tokens.
Burn Vault Finance ($BFV):
The team behind this protocol rug pulled as the newsletter says. It was also confirmed that no longer active was the Telegram account.
The project had a presale for $SBREE tokens which would then be swapped for $BREE, according to the newsletter. Minting 50,000 SBREE, one of the admin wallets exploited a backdoor in the SBREE token contract. It was observed that when at the expense of other holders, and soon after that the SBREE was converted into BREE and sold it on the market thus pushing down the price of BREE. For under 200 ETH, the 50,000 BREE was sold.
Staking may steal 1% of your LP tokens a the Boxmining newsletter says. One user is seemingly complaining about the 1% LP staking fee paid to developers on Twitter. Expressing disappointment that this fact had not been disclosed upfront was the user known as HuntingtheCoins.
Emerald Mine (EMD):
In this case, the user tokens that are worth nearly USD 2.5 mil that was supposedly locked under a smart contract were moved to another account according to the newsletter. Managing to stop the sale of 135,020 EOS was, fortunately, cryptocurrency exchange Changenow. Whereas here it represents what is only a tiny portion of the total amount of the funds stolen.
After investors deposited their funds in they found they were unable to withdraw due to falsified audit results. At the time of writing, the team has since disappeared and the website was down.
When you connect your wallet to the Minions Wallet site, Minions will access all your assets. The post was under investigation for alleged violation of posting rules according to the message left on Minions Farm’s page on Medium. At the time of writing the official website was also down.
Allegedly triggering simple permission granting and withdrawing tokens was the hacker according to a newsletter. There has been no activity on their Medium page as observed since September 23.
Allowing UniCat to keep control over users’ tokens even after they were withdrawn from the pool was a back door in smart contracts. Supposedly been stolen was around $200,000 worth of crypto
Creators of this token rug pulled and now cannot be located on social media according to a newsletter. On social media, similarly, it could not find any information on Unirocket.
Taking a total of USD 20 million of investor funds and disappeared was the project promoting themselves on Twitter for 2 days. In September, it was reported on Yfdex.finance scam.
Finally, those prospective Defi token investors are now seen as common methods and tactics that have been used by fraudsters to engineer theft of funds from the list. Once defrauded investors have no chance of recovering lost funds as there is no regulation and the fact that most of the tokens are issued by anonymous entities.
Concluding On Rug Pulling Threatening Defi
Continuing incidents of rug pulling will thereby hurt the belief that decentralised finance comes to be the panacea to the longstanding problem of financial exclusion. Doing this is the only way to maintain the public’s interest in Defi as influencers and community leaders should help fix these problems. From imposing restrictive rules that curtail further growth of the space, more importantly, such an effort could help stave off regulators.