The security of DeFi, especially the FTM ecosystem, has been shaken because the “Toomfolk” project seems to be the best place for fraud to thrive. Even after investigating, what looks like a safer project can turn out to be a scam.
Recently, Pulse DAO has become rugged. Reportedly, their own developers disagree, and KYC may not be enough to hold this person accountable.
Toom fork and rug pull
According to Chainalysis data, in 2021 DeFi Ragpur acquired over $ 2.8 billion in cryptocurrencies, accounting for 37% of all cryptocurrency fraud revenues of the year, compared to just 1% in 2020.
High-risk models, often called FTM-based TombFork, are ideal for pulling rugs and continue to fall into many investors.
Pulse was a project that allowed users “Create your own prediction market for something.” They launched the token model with the promise of “rewarding all participants fairly and at the same time increasing the resilience of the network.”
Pulse DAO was a toom fork. Toom Fork, based on Toom Finance, is a stablecoin project with an algorithm that pegs tokens to another coin (originally FTM).
In the case of Toom Finance, they say “You can create mirrored liquid assets and move and trade without restrictions. ”
Pulse DAO rug
The rug is Confirmed According to Rugdoc.io, the project was at risk of mishandling governance and had previously warned that a contract was required to be fully audited by a trusted auditor. They emphasized the following risk vector:
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Not KYCed by RugDoc
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Currently, there is no reliable audit
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Liquidity is not locked in RugDoc
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Not multisig. Due to the governance risks mentioned above, it is highly recommended that your project use the project with a community member or a trusted third party as the approver.
Then they found it 4243 FTM has now been removed from the project by the contract owner. They seem to have drawn almost all of the liquidity of the project.
“appear Toomfolk has its own governance risks. Therefore, it is important to abandon the contract and introduce KYC before joining the company. “
However, RugDoc overlooked Pulse DAO running KYC on ApeO Clock, which is not secure enough and this is a very important detail that investors should take into account. Is KYC enough? See below for more information.
About five days ago, PulseDAO said via Discord that there was a problem with the cross-chain bridge, but nothing more. Since March 13th, all accounts and websites have been down or deleted.
I don’t have much information running around, but I’ve stripped screenshots of messages from the team. This is one of the excuses they gave.
But even Ape O’Clock, the platform used for KYC, was confused.
The team quoted a person named “Ready to kill the project” and “DAOKing”. He is clearly a YouTuber who signed a contract with Pulse DAO and reviewed it in the video. This YouTuber claims that they used him as a scapegoat and he was actually one of their biggest owners and became rugged as well.
He lists his wallet in a recent video and you can see the movement on FTM Scan. Some users say he doesn’t, but it’s unclear if he owns another wallet. However, he seems to be actively working with Ape O’Clock to investigate pulls and take action.
So far, the whole project looks like a rugged developer.
The PulseDAO Telegram channel claims:
The team also said it was investigating the “attack”, modifying the website and taking responsibility.
The reason they also removed the Discord channel and Twitter is “Encouragement, support, and optimism are not FUD or discouraging comments while they are successful in restoring service.
When you want to take responsibility, deciding to remove all major sources is a very strange choice.
Also, the rug pull pattern Point out an unsustainable model: Toom Fork.
Some are quickly discovered as hard pulls. That is, the developer used a malicious backdoor to code the token.Some are soft pulls, which means that the project will be dumped.
Related Readings | Competition for Truth: Phantom vs. Phantom. Rekt, what went down
Why KYC wasn’t important
If the project has KYC, many investors check the safe, but the Pulse DAO example shows its weaknesses.
Here are some of the reasons why it doesn’t make a difference:
- Recovering from cryptographic theft from some countries can be difficult or even impossible.
- Authorities may not investigate smaller crypto projects.
- Scammers may not even be held accountable in some countries as the rug pull falls into the gray area.
The user wondered, “How do you expect the entire DeFi to develop and grow if safeguards are not set?”
FTM price
Fantom (FTM) has fallen 5.50% in the last 24 hours and is trading at around $ 1.08 on the daily chart. Coin has experienced fear from investors due to the withdrawal of major developers. The Foundation claims that this does not affect their plans.
Related reading | Why Phantom fell 22% after leaving the key person
