The decentralized finance ecosystem has been plagued by a variety of known scams and exploits for some time, another known as the “soft rub”.
Those who have been working at DeFi for some time will be familiar with the term “rug bridge”. It usually refers to the abandonment of a project by insiders or developers who drain liquidity from pools or vaults on decentralized exchanges and disappear along with the funds.
A related loophole to affect the emerging financial landscape is the “soft rub,” where a project’s founders simply dump their own tokens and exit the venture, rather than taking control of users’ assets.
In some cases, a soft rug is more insidious as developers go out of their way to build trust as well as create a false sense of security while attempting to hide the dumping of tokens. If done cleverly enough, users may not even know they’ve pulled the short straw.
There have been quite a few incidents in the DeFi scene over the past week where there have been allegations of soft rug exit scams.
The team at PolyWhale, a polygon-based produce farming project, announced that it will stop working on the platform on Reddit. Post on 20 June. Two days later, token holders learned that the project’s Treasury wallet had been emptied.
As reported by Cointelegraph, Founders of Polywhale Finance were accused of pulling soft rugs By selling your tokens during the latest crypto market price collapse. The project’s native token, KRILL, has fallen from a high of $0.17 earlier this month to $0.17.
neglectful Another claimed soft rub was reported involving Swipe, which developed the Binance smart chain’s third-largest protocol, Venus.
On June 22, the founding team behind the BSC-based money market and stablecoin protocol announced that they were avoiding the project. Uniswap community member @MonetSupply accused the team of being soft on Tuesday.
For Lending Protocol, sound governance isn’t everything, it’s the only thing https://t.co/MDVMrw7I4y
— monetsupply.eth (@MonetSupply) June 22, 2021
However, members of the new Venus community denied the allegations, claiming that it was just a rumor and that the Swipe team had handed over all their tokens.
The incident is not taking its name to stop Venus native XVS token It was trading near $34, down 40% since the same time last week. According to CoinGecko, XVS is down 87% from its all-time high of $147 on May 10, changing hands to $19.28 at the time of writing.