As you may know (since it has been discussed on LeoFinance Discord for quite a long time) Iron Finance had released new farms/vaults on Polygon. These vaults yielded in TITAN and sold them to autocompound your initial investment which is IRON and USDC. IRON, backed by USDC and TITAN is supposed to be pegged to $1.
However, after TITAN rose to close to $60 in the last couple of days, the APRs went crazy. People were acting like gorillas and buying into it. Iron.Finance TVL went up as high as $2 billion USD. Even crossed it at one point. However, starting this morning, TITAN started to drop... all of sudden for a whopping... 100% loss.
As you can see from the chart, it's a relatively stable drop. So... I delved in deeper.
https://polygonscan.com/address/0xc70652ee438f4a3c234b568fc35f9d918f21e62c#tokentxns
This address... was doing something interesting. After further research, a conclusion was made.
IRON, as previously mentioned, is a stablecoin backed by USDC and TITAN. When someone buys IRON, they can "redeem" it for TITAN and USDC. approximately 75% in USDC and 25% in TITAN. This address I shared above found a way to exploit this. Starting with quite a sum, the address started buying IRON for cheap (0.98) and minted TITAN. Sold it for a profit (since the amount is big, like $100k, he was able to move the market) by doing this, he not only got 75% of his USDC back, he also got 25% in TITAN, which he sold for more USDC. Then even continued buying more and more IRON and repeating this.
Every single transaction, he was profiting about $3-10k (depending on TITAN price) while causing the TITAN price to drop.
So... why did this not help IRON peg? Because FUD and ultimate bot.
Iron.Finance team could have prevented this by disabling the redemption system or adjusting its fees to make sure the bot does not profit. Or disabling it altogether while implementing a fix. However, they did not.
So what happened?
RUGPULL.
The devs wanted everyone to withdraw their liquidity, so that they can start claiming "oh no, we were hacked", "we were exploited" when it was something completely preventable.
Thankfully, I was nearly the first in, and one of the "mid" ones out. I had faith that IRON would recover its peg. Alas, it did not. I am still in profit so this whole flustercuck just ate into my profits. But it's sad for those who lost quite a lot. Both in TITAN and in IRON.
Posted Using LeoFinance Beta
I put my trust in Cubfinance and dont mess with a lot of the other stuff.
DeFi is certainly a wild world and one must be very careful. Glad you were able to make it out okay. Many were not I am sure.
Posted Using LeoFinance Beta
Me2 buddy!
CUB is the long-term game.
Sometimes when I'm talking about all this stuff with others I start to feel kind of culty. There are so many people out there ultimately dedicated to whatever pet project they’re into we seem to almost have that vibe but this is a great example of why.
Leo has been transparent, honest and dedicated while rug pulls are happening left and right. Our loyalty is deserved.
Yikes even Polygon that's suppose to be a more regulated blockchain to prevent such things.
Posted Using LeoFinance Beta
I got out quick enough luckily.
This is hardly even an exploit. It was just taking advantage of the softness of IRON's peg.
Posted Using LeoFinance Beta
What a shame. These exploits are getting so common!
Posted Using LeoFinance Beta
too many defi platforms appearing with no security or at least security one can trust. DEfi is still a new thing is currently evolving. Those who just jump here and there for gains only, mostly lose the most.
I'm not sure I feel that sad for them but hopefully they've learned their lesson now. It's not a game to play if you don't know what you're doing.
Just out of curiosity . . . could you have seen those figures which show the exploit, a couple of days ago?
Posted Using LeoFinance Beta
From what I understood, no. It started yesterday.
!ENGAGE 10
Posted Using LeoFinance Beta
ENGAGEtokens.Hmm, in the end everyone is trying to make money. And most people don't do it like the one-person behind the wallet that took big advantage of a weak peg.
So yes, I do feel sorry for them who lost a lot.
Posted Using LeoFinance Beta
IRON is up to its peg now, at least it looks that way.
Posted Using LeoFinance Beta
No it's not.
Thanks for the correction. When I looked earlier at coingecko it showed a $0.99, so I assumed it was back at the peg. When I saw your notification I checked the price again and this time it shows $0.71. And also that Iron suffered from a bank run, and that all liquidity providers are asked to remove their liquidity. That message was not there when I checked the first time.
Posted Using LeoFinance Beta
The same thing happened in Viking swap, the token hit the high point which was $64 and fell for a rugpull, I think $60 is a standard price for these frauds?
Posted Using LeoFinance Beta
I've been watching the conversations in LeoFinance's about various defi, and people jumping in and out of them. Occasionally I consider jumping into to some of them. Mostly, I've just watched.
All the new tech is a gamble, congrats on getting out of this one while you were still in profit.
Posted Using LeoFinance Beta
Looks like poly is becoming the rug pull chain of note that’s the second one this week! It’s sad but at the same time is so entertaining
Any chances of getting this one going again? Don't really like exchanges and right now people might be craving to get some HIVE, so I can blast all over the place telling all the Ethereum guys, how cheap they can buy HIVE if they use BSC, plus tell them about cubfinnnance and get them dizzy with why we don't even care because we don't pay any fees =)