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- These soft rugs can be hideous, where developers intend to build an environment of trust and false security.
- Polywhale was accused of a scam selling the tokens during the most recent crypto market crash.
- The protocol’s native token KRILL has now fallen to a low of $0.7 after rising to an all-time high of $7 during early June.
People who are well acquainted with the DeFi sector must be aware of the term ‘rug pull.’ This refers to the act of abandoning a protocol after removing liquidity from pools or vaults on decentralized exchanges. Soft rugs in the world of finance refer to dumping all the tokens and exiting the protocol instead of taking hold of the assets. Generally, they tend to vanish with the funds. Recently, these soft rugs have been causing tremendous affliction to the world of decentralized finance. The DeFi sector has faced several scams, attacks, and exploits; however, these soft drugs are recently growing in large numbers and are affecting the DeFi ecosystem.
Soft Rug Exit Scams on an Increase Once Again
These soft rugs can be hideous, where developers intend to build an environment of trust and false security at the same time to dump the tokens. In some cases, these are done so tactfully that the users won’t even get a hint of the unfair activities that are taking place. Recently, a handful of soft rug exit scams have been encountered by DeFi users. Polywhale, a Polygon-based yield farming project, was the most recent soft rug exit scam. The Polywhale team, in a Reddit post, announced that they would be halting all their work on the platform. After two days of the announcement, the users discovered that all the amount in their wallets had been cashed out.
Venus Declines any Possibility of Swipe Being a Soft rug Exit Scam
Polywhale was then accused of a scam selling the tokens during the most recent crypto market crash. The protocol’s native token KRILL has fallen to a low of $0.7 after rising to an all-time high of $7 during early June. Again, another soft rug scam involving Swipe rose into fame. Swipe developed Venus, the third-largest protocol on the Binance Smart Chain with $1.44B in total locked. Swipe announced that they were withdrawing from the protocol and the reason being their shortfall crisis in May.
Swipe was called out on Twitter by monetsupply.eth and was accused of being a soft rug. The tweet added that sound governance isn’t everything for lending protocols, but it is the only thing. The Venus community denied all allegations and confirmed that it was just a rumor. They also added that Swipe had handed over all their tokens which declines all accusations regarding it being another soft rug.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
