With more and more DeFis launching on top of Polygon (MATIC), rug pulls are popping up here and there. Here is how scammers are getting ahold of investors' money.
Another day, another rug pull in DeFi corner
Today, June 5, 2021, Polygon-based decentralized financial protocol PolyButterfly vanished. Its website is shut down and its Twitter account and Telegram chats have been deleted.
Prior to this mysterious disappearance, it was revealed that the PolyButterfly code had a dangerous backdoor that allows the product team to remove customers' liquidity.
They did it. It happened.— Rugdoc.io (@RugSteemer) June 4, 2021
🚨 Polybutterfly finally rugged 🚨
0x0eA0eC93E0678AEAF02f107464769DfBBD8A388e this is the wallet they used.
Totally stolen: 600.35 ETH (over 1.5M $)@0xPolygon
I hope most of you pulled out your funds after our emergency 🆘 warning ⛔️
According to RugDoc DeFi transparency enthusiasts, scammers stole more than 600 Ethers, or over $1,500,000.
While the net amount of losses is nowhere near that of the largest DeFi rug pulls on Ethereum (ETH) and Binance Smart Chain (BSC), the activity of malefactors on Polygon has gained traction in Q2, 2021.
Most common fraud scenarios
After PolyButterfly's drama, the RugDoc team discovered three "potential" rug pull designs in several Polygon-based DeFis.
🚨🚨After Polybutterfly’s hard rug today, we found THREE MORE Rugs 🚨🚨— Rugdoc.io (@RugSteemer) June 5, 2021
1️⃣ ⚠️⚠️ Taba Finance can hard rug ALL BEP20 tokens. ⚠️⚠️
2️⃣ 🚨🚨Aura Finance can transfer LP to their own "rescue address”🚨🚨
3️⃣🆘🆘PolyWeed has no emergency withdraw. Unstaking fee can be 100% 🆘🆘
Namely, the Taba Finance team hard-coded an instrument that allows it to remove all liquidity from BEP-20 tokens.
The Aura Finance team can transfer LP tokens to a specific "rescue address," while PolyWeed DeFi implemented 98 percent withdrawal fees.
As such, the clients of this DeFi protocol can withdraw nothing but two percent of the funds locked into PolyWeed.
Every DeFi enthusiast should be super cautious when approaching staking experiments, "yield farming" and swaps in early-stage Polygon-based protocols.