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The DeFi yield farm’s creators allegedly redeemed over $1 million in tokens when the Treasury wallet was depleted on Monday.
Developers of Polywhale Finance, a leading yield farm on the Polygon network, have abandoned the project in what appears to be an elaborate exit scam worth over $1 million, cryptocurrency news outlet Crypto Briefing reported Monday.
Polywhale Finance’s founders have been accused of committing a “soft rug” exit fraud by selling their tokens amid the recent crypto market price drop. Polywhale Finance claimed inadequate tokenomics, a bad market forecast, and competition as the main reasons for folding in a Telegram channel dedicated to the project. However, some of the community believe the hurried withdrawal was motivated by malice.
To begin, the Polywhale Finance official Telegram channel has been permanently closed, with community members becoming persuaded that the enterprise was fraudulent. Disgruntled members of the community have subsequently formed a new Telegram channel named “Polywhale Rugged,” with the pinned post reading:
ATTENTION: THE [TREASURY] WALLET HAS BEEN DRAINED ALMOST ENTIRELY INTO THE DEV WALLET AND then 1.04 MILLION REDEEMED FROM THERE.”
According to a member going by the moniker “Exceptional.” the Treasury wallet held 5 million tokens on June 9. Earlier in the day, a member of the community with the name “SK” saw that the Treasury wallet had shrunk to just 1.6 million. He was afterwards barred from the chatroom and his message was removed.
“As of 12am UTC that wallet now has ~$200,000 in it, with 1.4 million being transferred to the devs wallet at around 1655 UTC,” the message states.
Polywhale Finance claims to have more than $3.6 billion in total value locked throughout the whole platform on its website. An unknown group began the produce farm in April 2021.
Polygon has swiftly become one of the most popular DeFi protocols in the crypto world. According to Cointelegraph, during the peak of the DeFi boom in May, Polygon registered 75,000 new active users in a seven-day period. Last month, the 1inch Network extended to Polygon, increasing the aggregator’s liquidity sources. In the meanwhile, Ren stated in May that it has established a bridge to Polygon for seven major cryptocurrencies, including Bitcoin (BTC) and Dogecoin (DOGE).
Polygon was one of the fastest-growing projects during the bull market, having renamed from Matic Network in February 2021. Polygon’s token, which continues to trade under the symbol MATIC, is ranked 16th by market capitalization with a total network value of $7.6 billion.