In the realm of decentralized finance, trust is paramount. However, Coinbase’s Base Layer-2 network has recently faced a series of unfortunate events, casting shadows over its reliability. Our in-depth analysis delves into the recent breaches and scandals that have shaken its foundation.
The Magnate Finance Exit Scam: A Blow to Trust
A few weeks after a shocking $23 million rug-pull involving the BALD token, Coinbase’s Base Layer-2 was hit again. Once seen as a trustworthy entity, Magnate Finance performed an exit scam, depriving users of a staggering $6.5 million.
Security experts from PeckShield have unveiled the underlying tactics. They allege that Magnate Finance resorted to manipulating the price oracle of DAI and wETH to orchestrate this massive heist. Consequently, their total value locked plummeted dramatically, from $6.51 million to $14,000.
ZachXBT, a prominent on-chain investigator, shed light on some alarming discoveries. The platform’s website has gone dark, and its Telegram community has disappeared. Delving deeper, ZachXBT linked the deployer’s address to the notorious Solfire $4.8M exit fraud.
The Solfire Saga: An Earlier Betrayal
In January 2022, the crypto community was abuzz with revelations about Solfire.Finance. This platform, now synonymous with deception, defrauded users of over $3 million. In a move echoing Magnate Finance, Solfire promptly vanished, erasing its digital footprint.
Branding itself as an avant-garde lending and borrowing platform, Magnate’s tokenomics boasted of Layer-2 revenue sharing and a novel interest rate model. Such promises, however, now appear hollow in light of recent events.
With the introduction of its Base Layer-2 network, Coinbase ignited the development of myriad decentralized applications. While Base’s mission was noble – to forge a scalable, user-centric Ethereum network – it unwittingly opened Pandora’s Box. This platform soon became fertile territory for malicious actors seeking unsuspecting prey.
Encryption AI serves as a grim reminder. This project, hailed for its potential, left a trail of devastation with a ruthless $2 million rug pull.
A Sea of Deceptive Tokens on Base: Solidus Labs’ Findings
But that’s not all. In its investigative report, Solidus Labs unveiled over 500 dubious tokens waiting in the wings before the blockchain’s launch. The study further revealed a concerning detail: about 300 tokens had hidden functions, enabling unchecked coin minting.
Moreover, another 70 smart contracts concealed transaction fees, while over 60 were cunningly crafted honeypots.
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