New Concerns About $5 Million Exit Scam
Date: 2023-08-25 Author: Karina Ziganova Categories: IN WORLD
1inch Network has announced its expansion to Base, a layer 2 Ethereum scaling solution built by renowned crypto exchange Coinbase.
This strategic move aims to offer 1inch users access to deeper liquidity, lower transaction costs and faster speeds, further enriching their trading experience.
However, this news came as a warning about an upcoming exit scam by Magnate Finance, which was released earlier today by user ZachXBT on X.
Concerns about Magnate Finance exit scam.
With over $6.4 million in total value (TVL) locked in at base, Magnate Finance is believed to be connected to a previous exit scam involving Solfire that resulted in a $4.8 million crash in January 2022. The address of the Magnate Finance deployer has been identified as matching an address associated with the Solfire scam, according to CertiK Alert.
Certik reported that within an hour of the tweet, ZachXBT Magnate Finance appeared to have disappeared, deleting its website and social media accounts. This raised additional suspicions about the legitimacy of the project.
However, the plot thickened when it was revealed that the deployer account was manipulating the price oracle provider. According to CertiK, this action allowed them to drain $5.3 million of liquidity by providing fake collateral.
In addition, CertiK reported that prior to this alleged exit scam, the project had peaked at $6.4 million in TVL. In addition, $2 million, 946 ETH (about $1.56 million), $1.3 million DAI, and 247 WETH (about $408k) were withdrawn from the project, further exacerbating the situation.
1inch opens up liquidity for Base.
On August 1, 24inch Network reported that 1inch Aggregation Protocol and 1inch Limit Order Protocol have been deployed at the base to the delight of its co-founder Sergey Kunz.
He expressed confidence in Base's potential, especially with the backing of a dominant player like Coinbase, and praised the overall philosophy of expanding blockchain adoption to the next billion users.
Built as an Ethereum Layer-2 scaling solution, Base promises increased security, stability, and scalability to support decentralized applications (dApps) and the Ethereum Virtual Machine (EVM) environment, but at a reduced cost. However, as the situation with Magnate Finance shows, DeFi is still subject to malicious human actions.
According to the 1inch Network announcement, projects deployed on Base can benefit from the integration of Coinbase products and simple fiat ramps, potentially enriching the Coinbase user ecosystem.
Since its public launch on August 9, Base has seen impressive adoption, with active users surpassing the 100,000 mark. In addition, the number of daily transactions has come close to that of popular Optimistic Rollup scaling solutions such as Optimism and Arbitrum.
By using the Base extension, 1inch users can access another Tier 2 solution with lower transaction fees, faster speeds, and additional liquidity.
The list of protocols available directly through 1inch on Base is exhaustive, including Uniswap v3, Balancer v2, SushiSwap v3 and more. Users can visit the 1inch Help Center for detailed guides on how to use 1inch on different networks.
Growth in baseline acceptance.
Notably, the surge in Base transactions coincides with a recent speech by Coinbase CEO Brian Armstrong. In an Aug. 23 post on X, formerly known as Twitter, Armstrong pointed to Friend Tech, a decentralized social app, as a critical driver of Base's growth and adoption.
The development and hype around the Friend Tech platform may have contributed to Base's significant transaction volume, Armstrong said.
Less than two weeks after launch, Friend Tech has recorded a total volume of over 43,064 ETH (equivalent to over $70 million) across 1.8 million transactions, according to Dune Analytics.
Base also gained notoriety after the launch and alleged pug pull of the BALD token last month. In addition, other DeFi platforms have had issues at Base, including RocketSwap and SwirlLend, which have suffered hacks and carpet pulls, respectively, totaling more than $1 million.
It has been a tough start for DeFi on Base. However, the introduction of key DeFi platforms such as 1inch hopes for the legitimacy and security of the network in the future.
The 1inch token is currently trading up about 3% to $0.24, down 20% from the last 30 days.
