{"id":282497,"date":"2021-06-24T07:49:49","date_gmt":"2021-06-24T04:49:49","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/beware-of-soft-rugs-a-growing-menace-in-decentralized-finance\/"},"modified":"2021-06-24T07:49:49","modified_gmt":"2021-06-24T04:49:49","slug":"beware-of-soft-rugs-a-growing-menace-in-decentralized-finance","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/beware-of-soft-rugs-a-growing-menace-in-decentralized-finance\/","title":{"rendered":"# Beware of \u2018soft rugs\u2019 \u2014 a growing menace in decentralized finance"},"content":{"rendered":"

“# Beware of \u2018soft rugs\u2019 \u2014 a growing menace in decentralized finance <\/strong>”
\n<\/p>\n

The decentralized finance ecosystem has been plagued by a variety of known scams and exploits for some time, with yet another coming in the form of what is known as a \u201csoft rug\u201d.<\/p>\n

Those that have been dabbling in DeFi for some time will be familiar with the term \u201crug pull\u201d. This general<\/a>ly refers to the abandoning of a project by insiders or developers who remove liquidity from pools or vaults on decentralized exchanges and disapp<\/a>ear with the funds.<\/p>\n

A related malfeasance to plague the emerging financial landscape is the \u201csoft rug\u201d which is where a project\u2019s founders simply dump their own tokens and exit the venture instead of taking control of users\u2019 assets.<\/p>\n

In some cases, a soft rug is more insidious with developers going out of their way to build trust and a false sense of security at the same time as attempting to disguise the dumping of tokens. If done cleverly enough, users may not even know they\u2019ve drawn the short straw.<\/p>\n

There have been a couple of incidents in the DeFi scene over the past week where soft rug exit scams have been alleged. <\/p>\n

The team from Polywhale, a Polygon-based yield farming project, announced that it would be ceasing work on the platform in a Reddit<\/a> post<\/a> on June 20. Two days later, it was discovered by token holders that the project\u2019s treasury wallet had been emptied.<\/p>\n

As reported by Cointelegraph, Polywhale Finance’s founders were accused of pulling a soft rug by selling their tokens during the latest crypto market price collapse. The project\u2019s native token, KRILL, has collapsed to $0.17 from a high of $7 at the beginning of this month.<\/p>\n

Related:<\/strong> <\/strong>Pulling the rug: DeFi investment hype fuels rise in crypto exit scams<\/em><\/strong><\/p>\n

The Defiant<\/a> reported on another claimed soft rug involving Swipe, which developed Binance Smart Chain\u2019s third-largest protocol, Venus.<\/p>\n

On June 22, the founding team behind the BSC-based money market and stablecoin protocol announced<\/a> that they were bailing from the project. Uniswap community member @MonetSupply accused the team of a soft rug on Tuesday.<\/p>\n

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looks like flagship @binance<\/a> project @VenusProtocol<\/a>\u2019s core team (@Swipe<\/a>) pulled a soft rug<\/p>\n

for lending protocols, sound governance isn\u2019t everything, it\u2019s the only thing https:\/\/t.co\/MDVMrw7I4y<\/a><\/p>\n

\u2014 monetsupply.eth (@MonetSupply) June 22, 2021<\/a><\/p><\/blockquote>\n