Rug-Pulled on the Latest YFI Clone, Soft Yearn (SFYI), After Rebase Gets Exploited
YFI, the governance token of Yearn Finance, is the most popular DeFi token, which currently has the highest value of $21,465 and is dubbed a “cash generation machine.”
Since its launch in mid-July, many copycats of this popular DeFi token have emerged, such as CREAM, Wifey, YFII, YFL, and others.
The latest knockoff has been Soft Yearn (SFYI), the adaptive yield-stable currency, which merges Yearn.Finance and Ampleforth. “As DeFi flourishes, the demand for YFI will increase exponentially. SYFI has a direct growth relationship to the prominent YFI token,” reads the website.
Being a soft pegged currency, whenever SYFI has a significant difference form the main currency’s price, the contract or expansion algorithm will converge the market price to the pegged price.
Ampleforth birthed based-finance, but it hasn’t been a success — elastic-finance means the supply of the token changes, and so does the number of tokens held by an investor.
Also, rebases have led to the collapse of the projects. It was last seen with YAM, which found a bug in its rebase function resulting in its crash.
But on Monday, the price crashed 100% from its peak of $174 last week to $0.00040, as per CoinGecko.
The crash happened due to what happened during the rebase period.
“During our first rebase at 8:00 UTC, September 3rd, 2020, a malicious actor bought 2 SYFI, and timed the adjustment of their token holdings with a Uniswap sell. During the transaction, the rebase applied, but Uniswap price remained unchanged, thus, the perpetrator's sell was amplified to the extent of wiping out most of the liquidity provided in the Uniswap pool. The rebase itself was also incorrect. The YFI rate per SYFI was not streamlined properly,” shared the SYFI team on its Telegram.
1/ Take it as you will:
I am the person who sold $SYFI on uniswap at the same time as the Rebase.
Or, I am the person who exploited the rebase bug in $SYFI.
Or, I am the malicious actor who pulled the rug on innocent chads.
— Amplify (@A_mplify) September 7, 2020
The team behind the project is now offering a “very large sum” of ETH as a bounty who can identify and apprehend the wrongdoer.
Last week, they did a presale and raised 400 ETH with a supply of 60,000 SYFI, double of YFI. However, unlike YFI, which is completely decentralized, but much like an ICO, they distributed portions of the token supply to the team and for marketing.
However, like the YAM project, they aren’t going anywhere and are planning a migration. They are also proposing to recreate the SYFI token, airdrop the number of tokens they had before the rebase, add at least 250 ETH to the initial liquidity pool, and fix the rebase mechanism.