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Yfdex.Finance (Yfdex), a new liquidity mining pool, has reportedly exit scammed, making off with up to $20 million of investors’ funds. The decentralized finance (Defi) project convinced people to hand over their life savings following just two days of aggressive marketing on social media, and then disappeared without a trace.
Crypto investor and analyst Cryptowhale on Thursday tweeted about Yfdex’s alleged dramatic plunder, a classic hit, and run. “Another day, another Defi scam!” the analyst ridiculed. “After promoting themselves on Twitter for 2 whole days, Yfdex has taken a total of $20M of Investors funds in their recent exit scam,” he added.
News.Bitcoin.com followed the breadcrumbs. A visit to Yfdex’s official channels on Telegram and Twitter showed that both accounts had been pulled down. The protocol’s website as well as its page on Medium, all of which were used to promote the project, returned an error message.
But much of the work had been done prior, in the past two days, to be exact. On September 8, Yfdex announced the pre-sale of its eponymous token, starting at 16:00 UTC, according to earlier screenshots posted by the Yfdex community on a Telegram discussion group, now a hotbed of regret following the alleged exit scam.
Yfdex, which touted itself as “a powerful player of industry (sic) that breaks down all barriers”, said the pre-sale was to last only four hours “until hard cap is reached… [and any] unsold tokens would be burned immediately.” For each ether (ETH), an investor would receive 12 Yfdex tokens, it added.
Within a few hours, a total of more than $20 million had been locked into the Yfdex protocol from thousands of investors. And that was it. Soon after, on September 9, the project completely disappeared from the radar, leaving investors facing financial ruin.
Cryptowhale expressed skepticism towards the whole economy of decentralized finance, telling his 33,000 followers on Twitter that: “99.99% of Defi tokens are scams, and will go this (Yfdex) route. Please be very careful if you are heavily invested.”
The news comes hard on the heels of another alleged fraud within the Defi space. Sushiswap anonymous founder was on September 5 reported to have exit scammed after converting all of his sushi tokens to ETH. The allegations later turned out to be false, as the founder transferred the coins to a known third party for supposed safe-keeping and transparency purposes.
Liquidity mining, the new craze in crypto economy, “is a community-based, data-driven approach to market making, in which a token issuer or exchange can reward a pool of miners to provide liquidity for a specified token.”
What do you think about the risk of fraud in Defi projects? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
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