The decentralized finance (DeFi) project WhaleFarm, launched at the end of June, had all the characteristics of a legitimate coup, like a gigantic promise of profit and anonymity of the creators. Still, many people put in money without thinking twice. Result? Prejudice!
About US$ 2.3 million — R$ 11.4 million — of users’ funds were stolen on Tuesday (29) through an exit scam, known as rug pull (carpet pull). Twitter profile CryptoWhale was the first to publicize the case.
On Reddit, the r/WhaleFarm_Finance group administrator deleted his account after a user posted the image of the price of the collapsing project’s native token, with the caption “Hello Rug Pull Finance”.
In the chart below you can see that the price of the WhaleFarm Token went from $215 to $0.11 in less than an hour. Before that, the currency reached a peak of US$250 on Monday (28).
After looting the staking users, the project deleted all their social networks and the official Telegram group.
Promise of profit of 7,217,848% per year
Although these moves are not rare in the crypto environment, WhaleFarm stands out for its boldness. The first — and perhaps the main — signal to light the red alert was the promise of a profit of 7,217,848% APY (Annual Percentage Yield).
The millions of percentages in return would be obtained by staking various cryptocurrencies, such as BNB, BUSD, USDT, BTC, ETH, ADA, DOT and LINK, according to CryptoPotato.
“Only greedy pigs would invest in a project that promises 7,000,000% APY. And as always, the pigs are slaughtered,” wrote a user on Reddit.
A second factor that raises suspicion is the anonymity of the project developers. Unknown profiles, with no known person in the community or credible company behind them, can simply disappear after a scam—and that’s what happened.
WhaleFarm was launched on Thursday (24) on Binance Smart Chain (BSC), a network that accumulates projects without foundations and accused of scam, including Brazilian meme currencies, such as Vira-lata and Gatinho Finance.
The most famous rug pulls that took place at BSC this year were based on animal tokens, such as meerkat(Meerkat Finance) and turtle (TurtleDEX), which caused a loss of R$ 183 million to investors.