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May 11, 2021: FroNo! 🍨📉
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May 11, 2021: FroNo! 🍨📉

Scams, Hacks and Ponzis: $FROYO, $SHIBA, Rari, and Value DeFi

crv.mktcap.eth
May 11, 2021
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As long as there are highly liquid decentralized markets, there will be speculative frenzies, hacks, ponzis, and scams. Fortunately everybody in crypto has a pretty thick skin and knows it could all plummet to zero.

Recently we’ve seen no fewer than four questionable projects, here we review them in order of their impact on Curve users.

FROYO

$FROYO, the Fantom-based unauthorized Curve Fork, appears to have melted.

Yesterday the Fantom Community Alerts noted that a dev wallet appears to be siphoning money

Twitter avatar for @FTMAlertsFantom Community Alerts 🚨 @FTMAlerts
It was just brought to my attention that there have been some very large sells happening of @froyofinance $froyo at sushi swap for $FTM I have no further information as to what is happening. It does appear to be a dev wallet which is very concerning.
ftmscan.com/tx/0x9e3a052f0… 👇Fantom Transaction Hash (Txhash) Details | FtmScanFantom (FTM) detailed transaction info for txhash 0x9e3a052f0e744b6fabf953f8132916b1aa352bd26a2b3a11f6d8abf62f6162dd. The transaction status, block confirmation, gas fee, FTM, and token transfer are shown.ftmscan.com

May 10th 2021

11 Retweets42 Likes

Eventually the following response was issued from a developer at @BeefyFinance, which had once touted $FROYO

Image

The $FROYO one-man dev team has gone silent, not issuing a tweet since May 8 and abandoning their Telegram group. While technically it’s possible that the dev just went into the mountains for a few days without wifi, this means the most charitable possible interpretation is that it’s merely an awful project.

However most bets are that this is an outrightscam.

Twitter avatar for @defi_captainCaptain DeFi @defi_captain
$froyo was shady last couple of days, no sign of a living soul in their team. I got out this morning as i wasn't comfortable with grave silence from their end. $ftm

Fantom Community Alerts 🚨 @FTMAlerts

It was just brought to my attention that there have been some very large sells happening of @froyofinance $froyo at sushi swap for $FTM I have no further information as to what is happening. It does appear to be a dev wallet which is very concerning. https://t.co/q6dfO8BBbi 👇

May 10th 2021

2 Likes

The price of their $FROYO token has meanwhile plummeted.

There were plenty of signs that this project was either unsophisticated or fraudulent. Among other issues, they never even bothered to set up a redirect from http to https, ensuring many new users got an error page.

Arguably it’s also sketchy that the approval for depositing a single dollar defaults to 1e71 dollars, an amount that would make even the US Treasury Department blush.

If it indeed was a rug pull as commonly speculated, it was terribly unsophisticated. All they did was to mimic the successful Ellipsis airdrop, get a little goodwill from the community with claims of a free airdrop, and then sell off the airdrop for what appears to be about $70K worth of Fantom.

Incredibly, the protocol still has about $30MM sitting in it which has not been touched. A more sophisticated hacker might have targeted this money instead of the small money from the $FROYO pump and dump.

People grabbing a speculative airdrop only lost a few pennies thanks to Fantom’s low prices. Anybody who parked cash in these pools may be wise to withdraw and cancel all approvals.

Though it may not have been the world’s sophisticated scam, you still have to acknowledge that this frozen yogurt heist required some cold stones.

SHIBA

Twitter avatar for @FrankResearcherIgor Igamberdiev @FrankResearcher
1/8 In the past few days, meme token SHIB has been a source of high gas prices and incredible profits for some early adopters. Let’s take a look at some data to understand what’s going on👇
Image

May 11th 2021

100 Retweets365 Likes

Although this is not a purebred scam, the mania caused by the adorable but dogsh— $SHIBA token has bled into Ethereum in the form of absurd gas fees.

Twitter avatar for @lawmasterLarry Cermak @lawmaster
This dumbass token SHIB and all exchanges listing it really set a bad precedent. Now these new SHIB copycats are quite literally rekting Ethereum's gas fees. Look at the most recent blocks and transactions with the highest gas. It's all these meme tokens
Image

May 10th 2021

205 Retweets1,294 Likes

The bill for the hype came in at $89MM.

Twitter avatar for @RyanBerckmansRyan Berckmans @RyanBerckmans
Yesterday, ethereum did $89M in transaction fees, the most ever in one day. That's an annual run rate of $32.5B in fees. EIP-1559 is estimated to burn ~70% of fees and would have burned $62M in ETH yesterday. EIP-1559 launches in a little over two months.

May 11th 2021

270 Retweets1,491 Likes

For some time, the best place for some traders to acquire the $SHIBA token was UniSwap. The speculative frenzy drove a lot of WSB types to hammer the Ethereum network trying to grab their discount $DOGE.

In fairness, there may be other factors driving the high gas prices, but it’s still comical the sheer number of rugpulls at play here.

For one, there’s the rugpull of centralized exchanges continually delisting coins with high volumes. Amateur traders constantly return to try and kick the football.

Twitter avatar for @bneilujJulien Bouteloup @bneiluj
people repeatedly get screwed over by the same people over and over. But they seem to love it and it's amazing to watch. Robinhood did exactly the same with Gamestonk and today 3 months later they are stopping people from selling DOGE. Brilliant.
Image

May 9th 2021

120 Retweets576 Likes

There’s the rugpull risk inherent to $SHIB itself, which has an appalling Gini coefficient.

Finally there’s the rugpull of all the hardcore builders in the space, working diligently to create the future of finance, only to see their net worth eclipsed by assorted breeds of dog coins.

Twitter avatar for @mcvetpantsVthor-McVetPants ⓥ👖 @mcvetpants
Me for the last 5 years: “No crypto currencies aren’t all scams. There’s some great fundamental projects that are growing and achieving real world adoption and will lead the next bull market” 2021 bull market: “Buy $DOGE and $SHIB!!! To the moon!” 🤦‍♂️ 🤦‍♂️🤦‍♂️🤦‍♂️🤦‍♂️🤦‍♂️🤦‍♂️ #VeChain $VET

May 11th 2021

1 Retweet32 Likes
Twitter avatar for @CL207CL @CL207
somewhere someone with 10 iq bought GME calls, and then rotated to DOGE, and now has retired.

May 9th 2021

100 Retweets1,549 Likes

If you expect more hype cycles like this, you may want to just invest in Ethereum. Nobody can honestly say they’re wise enough to know which random dog coin will actually have legs. Yet when the mania clogs the traditional exchanges, Ethereum is the only network that can support the demand.

Yes, it may be obnoxious that in the short term, the free market values dog coins over DeFi. Fortunately Ethereum basically has the surge pricing mechanisms in place to keep the network traffic moving at any level of demand (both before and after 1559). It simply requires you the trader to judge whether or not your ape move is more valuable than scooping up doggie bags at 400 gwei.

RARI

On the more heartwarming side, the kids at RARI fell victim to a more traditional hack but thankfully bounced back.

4K ETH drained in the blink of an eye.

Twitter avatar for @Fiskantes🃏Fiskantes 1(3,3)7 @Fiskantes
Looks like @RariCapital ETH pool in @AlphaFinanceLab got exploited for >4k ETH. Another harsh weekend. $RGT down >30%, $ALPHA only 5%, since the exploit affects Rari. Observing the team handle crisis events like this tells a lot about the project, so watch closely.

banteg @bantg

The hacker has left a base64-encoded message saying rari=REKT alpha=ok # saved rari 6m https://t.co/WQpiPksDOX https://t.co/ruMH8Wam5s

May 8th 2021

17 Retweets132 Likes
Twitter avatar for @bantgbanteg @bantg
The hacker has left a base64-encoded message saying rari=REKT alpha=ok # saved rari 6m
etherscan.io/tx/0xa8a6b9911…
Image

May 8th 2021

158 Retweets682 Likes

Fortunately, the team was very transparent and upfront, providing a playbook for how to react to such events.

Twitter avatar for @jai_bhavnaniJai Bhavnani @jai_bhavnani
Today was a hard day for the Rari Community. The protocol suffered an exploit and saw an attacker steal over $10m from the REPT pool. I'll have a blog post coming soon with my final thoughts / plan here but I thought it was best to share something sooner.

May 8th 2021

42 Retweets494 Likes
Twitter avatar for @JackLipstoneJack Lipstone 🏎 @JackLipstone
I know It's Sunday, but in 1.5 hours at 5 PM PT, we will be hosting a town hall to discuss the future of @RariCapital in our Discord and I hope to see you there. It's been a rough 24 hours for us all but we are all here for the long-term with our fantastic community 🙏

May 9th 2021

1 Retweet56 Likes

Their solution involved reallocating capital from the team to bail out those affected, and converting the organization into a DAO a bit earlier than expected.

Twitter avatar for @TetranodeTΞtranodΞ @Tetranode
TL:DR 1. @RariCapital $RGT going to become a DAO 2. @RariCapital team allocation $$$ going to DAO 3. Reimbursement proposals followed by vote the next step forward Decentralization was inevitable, the hack just accelerated evolution Life finds a way...

Jai Bhavnani @jai_bhavnani

It's been a long couple days. But this is going to be the first step in the path towards making everyone whole again. Let's talk more about what the DAO can do with these new resources in our community call at 5pm PT today (located in our Discord). https://t.co/NCWFPfxkNJ

May 9th 2021

17 Retweets283 Likes

The response mostly earned plaudits along the way:

Twitter avatar for @ricburtonRic Burton 🇬🇧 ‣ 🇺🇸 🦇🔊 @ricburton
I have no deep insight into what has happened to @RariCapital What I will say is that @jai_bhavnani, @JackLipstone, @transmissions11, @davidslucid @hexamesh and the Rari team come across as great people who are all here to build DeFi for the long term We should support them ✊

May 8th 2021

8 Retweets194 Likes

Hilariously, the hacker cheaped out on gas fees.

Twitter avatar for @andy8052andy @andy8052
What is currently stopping the @RariCapital hack is the hacker skimped on gas fees and has a stuck transaction LMAO
etherscan.io/tx/0x9039c93cc…

May 8th 2021

99 Retweets743 Likes

For more details on the hack:

Twitter avatar for @RektHQrekt @RektHQ
Young blood and new money. After a quick break for lunch, it was the turn of @RariCapital to get rekt. $15M in ETH gone, taken by a serial attacker. This attack came from across chains. rekt picks up the case.
Rekt - Rari Capital - REKTDeFi / Crypto - Young blood & new money. Rari Capital has fallen victim to a serial attacker, who came from across chains to drain the Rari Capital pool, removing $10 million worth of ETH.rekt.news

May 8th 2021

43 Retweets187 Likes
Twitter avatar for @FrankResearcherIgor Igamberdiev @FrankResearcher
1/7 Rari Capital lost a lot of funds as a result of a complex exploit, right? However, things are far from simple, and we witnessed the first cross-chain exploit, so let’s see how it went👇
Image

May 8th 2021

198 Retweets713 Likes

Value DeFi

Finally, a quick note on Value DeFi, an organization that leaks money like a Silicon Valley VC. This time they dropped another $11MM, after twice before losing similar sums. This one hardly affects the Curve community, so we won’t go into much depth, except to link a few other resources.

Twitter avatar for @RektHQrekt @RektHQ
2 for 1, that’s @value_defi: The first protocol to feature twice on the rekt leaderboard. Ten million dollars lost due to basic mistakes by the team, yet the native token $VALUE barely dumped at all. Swindle or slip-up? You decide.
Rekt - Value DeFi - REKT 2DeFi / Crypto - 2 for 1, that’s Value DeFi - The first protocol to feature twice on the rekt leaderboard. First seven million, and now ten million dollars taken, as Value DeFi gets rekt cross-chains.rekt.news

May 6th 2021

20 Retweets83 Likes
Twitter avatar for @FrankResearcherIgor Igamberdiev @FrankResearcher
1/8 Another weekend with a DeFi exploit on BSC, and this time the AMM called vSwap from @value_defi is in trouble. About $11M was stolen today from non 50/50 pools, in addition to $6M already lost this week as a result of contract reinitialization. Let’s see what happened👇
Image

May 8th 2021

128 Retweets426 Likes

For more info, check our live market data at https://curvemarketcap.com/ or our subscribe to our daily newsletter at https://curve.substack.com/. Nothing in our newsletter can be construed as financial advice. Author is a $CRV maximalist, owns a little $ETH and $DOGE, but no $SHIBA.

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