The Ethereum Layer-2 lending venture Magnate Finance has vanished with $6.5 million in what appears to be a classic rugpull.
In Brief
Magnate Finance, based on the Ethereum Layer-2 infrastructure of Base, has successfully executed a rugpull, making off with $6.5 million.
Blockchain detective ZachXBT was the first to raise alarms about a potential rugpull after spotting a significant and sudden increase in the total value locked (TVL) in Magnate Finance, suggesting possible tampering of smart contracts.
In a dramatic twist, Magnate Finance has erased its entire social media presence along with all communication channels.
According to blockchain security experts, Magnate Finance has carried out a rugpull, disappearing with $6.5 million from users. Peckshield .
ZachXBT , a well-known on-chain sleuth, first posted A community alert was issued on X (formerly Twitter) concerning the likelihood of an impending rugpull event.
ZachXBT noticed a startling spike in Magnate Finance's TVL, which raised red flags about potential smart contract abuse on the platform.
ZachXBT linked the deployer's address to the previous Solfire exit scam that involved a theft of $4.8 million.
This exit scam was confirmed by Peckshield, which tracked a sudden decline of $6.4 million in Magnate Finance's TVL.
Peckshield’s investigation revealed that the project’s developer had directly manipulated The oracle provider liquidated all holdings, and the culprit behind the fraud redirected approximately 1.34 million $DAI to a new wallet along with around $1 million in illicit gains to the BNBChain. bridged Shortly after the scam, Magnate Finance eliminated all digital footprints, including its official website and communication platforms like Telegram. Before doing so, they altered their X (Twitter) biography to accuse ZachXBT of violating the smart contract.
Moreover, the lending platform hinted that there might have been a mutual agreement to split the stolen funds between parties involved.
In an update, they responded to an ongoing thread and modified their bio accordingly.
Earlier this year in March, Kokomo Finance, a lending protocol on the Optimism network, executed an exit scam as well, running away with $4 million in user deposits. They adopted a strategy similar to that of Magnate Finance, promptly shutting down their website and disappearing from social media.
Base, an Ethereum Layer 2 (L2) platform supported by Coinbase, has been grappling with issues following recent vulnerabilities. On August 1st, LeetSwap, the network's leading decentralized exchange (DEX), suffered an attack.
Crypto lending protocols haven't escaped this upheaval either. For example, Exactly lost more than $12 million worth of ETH due to a bridge exploit. an exploit that affected its liquidity pools.
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