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Key takeaways Polywhale Finance, the first yield farm on Polygon, abandoned the project and pulled out over $ 1 million in tokens. The team said they were quitting due to bad tokenomics and bad market conditions, a claim that others rejected. Community members describe the incident as a “soft carpet,” a fraudulent exit scam in which the founders of the project sell their own tokens in the marketplace. Share this article
Polywhale Finance, the very first yield farm on Polygon, was abandoned by its founding team amid allegations of carpet pull.
Polywhale: another scam leaving yield farming?
The team said in an official statement that they are moving forward due to the token bad economy and market conditions.
“We decided that we would no longer develop the project for several reasons,” the team wrote in its final note amid allegations of exit scams by members of the community.
Source: Telegram
Even though the team attributes its release to tokenomics, there are indications of malicious intent. Telegram’s official newsgroup has been removed, and there is a consensus among community members that the project was a potential scam.
Community members describe the incident as a “soft carpet,” a situation in which project founders abandon a project after throwing their own tokens into the market in exchange for stablecoins.
Polywhale Finance was launched in April 2021 by an anonymous team. It operated as a yield farm, offering its users a chance to generate incredibly high returns on their deposited funds.
Users can wager various tokens including Matic, Quick, and several other tokens to earn APRs of up to 1000% in the native token called Krill.
Daily reminder that most cryptocurrencies are fundamentally worthless and value is based on speculation. Be prepared to lose it all – as many people just did $ krill pic.twitter.com/Qtkb8mpiUl
– Liam Brennan (@LCBrennan) June 20, 2021
Until last week, Polywhale had a Total Locked-In Value (TVL) of over $ 100 million in cash pools as well as other unique asset pools.
But the team has recently started to drain funds from its treasury. A specific transaction shows the Polywhale team drained over $ 1 million from the project’s cash flow from their future development and sent them to their own wallet.
“They drained funds five days ago while announcing that they were going to add new development features, it’s not a simple shutdown, it’s an exit scam,” said a community member at CryptoBriefing.
Robust polywhale without hack. The developers said they were tired
– Majestic (@exoldier) June 20, 2021
Shortly after the team announced its release, the price of Polywhale’s native KRILL token collapsed from $ 1.5 on June 18 to $ 0.13 now, according to CoinGecko.
Polywhale isn’t the only recent Polygon scam. The continued craze for yield farming, large amounts of cash, and negligible fees have made the network a great place for crooks to thrive.
‼ ️‼ ️ The Polysa team has ABANDONED the project and SOFT RUGGED. Twitter is deleted, the TG group is dead. Please use emergency withdrawal to withdraw your funds if you are unable to pick up the hook (some users are reporting this issue) .https: //t.co/IkkwN3KbK2 pic.twitter.com/NrJEsitmmt
– Rugdoc.io (@RugDocIO) June 20, 2021
Over the weekend, two other smaller yield farms, Polycash Finance and Polysa Finance, performed soft carpet draws and threw native tokens at their users before taking down social media accounts.
Such incidents follow the high-profile and notorious collapse of Iron Finance, a proposed stable algorithmic coin on Polygon that suffered from a massive liquidity attack. Several commentators have alleged that the Iron Finance incident could also be the result of a raffle, similar to that of Polywhale Finance and others.
QuickSwap, a Polygon-based DEX, is helping the spread of suspected exit scams like Iron Finance and Polywhale. QuickSwap promoted both projects with massive cash reward programs, without doing due diligence in selecting their partners.
This news was brought to you by ANKR, our favorite DeFi partner.
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