The DeFi bubble continues to impress minds and wallets and thus sometimes misleads investors. The Yfdexf.Finance liquidity pool project turns out to be a scam. Its creators have disappeared with 20 million dollars in cryptocurrency.
More than ever investors must be careful before committing crypto-currencies in new DeFi projects. The lure of gain remains a bad adviser. In recent months, protocols associated with governance tokens, but not audited, have seen their value soar.
More discreet, Yfdexf.Finance is nonetheless a scam. As Zycrypto reports, its directors disappeared with the funds committed by investors. In the end, the theft has been estimated at 20 million dollars.
To attract investment in crypto-currency in its protocol, the cash pool project conducted advertising campaigns. Yfdexf.Finance was thus able to make itself known to potential investors on Twitter and Telegram.
This promotion on social networks enabled the DeFi project to raise no less than 20 million dollars in two days. But as financial advisor and trader CryptoWhale pointed out in a recent tweet, Yfdexf.Finance was nothing but a scam.
Now more than ever, he urges investors to be cautious. According to him, most DeFi tokens turn out to be scams. SushiSwap could have met a similar fate.
Its anonymous founder Chef Nomi took nearly 12 million dollars in Ethereum and Sushi tokens before he walked out the door. He has since returned and apologized as you can read in our article.
The protocol Sushiswap has now finalized its migration towards more decentralization. Its management is no longer in the hands of a single person. This week, a board of 9 members was formed. Eventually, all decisions will be subject to a decentralized process.
SushiSwap is trying to avoid any further scandal and protect investors from such scams. However, this is not the case for a certain number of other decentralized finance projects.
Investors as always have to stay very vigilant in such young and volatile markets that draw in so much money. The lure of incredible returns has led certain foolish investors in very costly traps and more than ever, making your own research is invaluable and irreplaceable.
Decentralized Finance is bringing levels of hype and quick money making around blockchain technology at a rate that is probably only equaled by ICO’s of 2017. At the time already, generous investment by individuals looking to make quick money were already perfect terrain for scams and sadly history is repeating.
Contrary to what Cryptowhale says, I doubt 99% of DeFi projects are scams but the rule for investors still holds, better safe than sorry.