Arbix Finance knocked down – Since the arrival of decentralized finance (DeFI) , the number of cryptocurrency scams has increased tenfold. Now you have to be even more careful than before. Certik has identified a new one on the Binance Smart Chain (BSC).
SPOTTING CRYPTOCURRENCY SCAMS
In the crypto universe, and in particular in the DeFi branch , there are more and more hacks and scams using cryptocurrencies . The security protocols becomes a factor increasingly present. The integrity and rigor of smart contracts is therefore now an essential point when creating a new project.
“In the blockchain world, code rules and applies the logic of transactions. Code implementation, however, is untrustworthy and may contain bugs that lead to vulnerabilities. As an example (…), take a look at the DAO exploit that resulted in a $ 150 million hack. “Ronghui Gun, co-founder of Certik
However, in recent months a slew of new DeFi projects have emerged. This shows that it is no longer mandatory to be a code genius to develop your own protocol. This brings up the question of knowledge and therefore the legitimacy of the developer (s) in order to avoid security breaches or worse, direct scams .
THE ARBIX FINANCE SCAM PINNED BY CERTIK
Arbix Finance is a Yield Farming protocol . You are going to deposit an amount of cryptocurrency into a liquidity pool . But in most cases, this safe in which you deposit your cryptocurrency belongs to a protocol . This is why it is important to have as much information as possible about the holders of the protocol .
This is what happened with Arbix Finance . This Tuesday, January 4, Certik communicated via its Twitter account to warn its users that Arbix Finance was a rugpull [scam specific to decentralized finance] and that they should absolutely not interact with the project.
“Arbix Finance has been identified as a rugpull. Privileged functionalities appear in the identified smart contracts. The team is currently investigating it. DO NOT interact with the project. “
The Certik company found several reasons for qualifying the project as a rugpull. In particular, the fact that the development team itself allocated 4.5 million protocol tokens . These tokens were then dumped [term used to define an extremely rapid sale of the token]. In addition, a hacker managed to drain $ 10 million from the liquidity pools.
Unfortunately, scams of this type are very common in the field of decentralized finance and the overall loss due to this type of scam is estimated to be over $ 7.7 billion. A Chainalysis report seems to indicate that rugpulls are the source of 37% of all scam revenue in 2021. We will recall in particular that of the OHM AnubisDAO fork where investors lost for a total of $ 57 million.