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  • Writer's pictureConnie Chan

DeFi Protocol vanishes with $460K in rug pull.


DeFi Protocol vanishes with $460K in rug pull.
DeFi Protocol vanishes with $460K in rug pull.

SwirlLend, a lending protocol based on Layer 2 networks Base and Linea, has seemingly executed a rug pull, disappearing with an estimated $460,000 in user funds. According to reports, the project developer drained $290,000 from Base and $170,000 from Linea.

This incident is the second significant exit scam executed on the Base network in recent weeks, with a similar occurrence involving the Bald meme coin.

BALD, a meme coin inspired by Brian Armstrong, saw its value plummet from over $85 million to nearly zero after the unidentified developer removed liquidity from its main pool.


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DeFi Protocol vanishes with $460K in rug pull. SwirlLend Lending Protocol Has Been Rugged, PeckShield Confirms

On August 16th, PeckShield, a blockchain security firm, reported on X (formerly Twitter) that the SwirlLend protocol team had executed an exit scam, absconding with approximately $290,000 in user deposits on Base. According to PeckShield's on-chain analysis, the protocol's developer transferred roughly $289,500 worth of Ether and USDC tokens from Base to Ethereum, leaving about 92ETH on Base. Shortly after, PeckShield provided an update that SwirlLend had also been rugged on the Linea chain. The protocol's deployer transferred about $170,000 worth of ETH from Linea to the Ethereum network via Orbiter Finance, according to the security firm. According to data from DefiLlama, the total value locked (TVL) on the SwirlLend protocol has plummeted from nearly $770,000 to a mere $49.21.


Source: DefiLlama
Source: DefiLlama

As of this writing, SwirlLend’s digital presence appears to have been erased, as its social media platforms on X and Telegram have been deactivated. Meanwhile, the lending protocol’s official website remains inaccessible.


Another Setback For Base?

Base, a Layer 2 network on Ethereum created by Coinbase, has been in the news recently for various reasons. Unfortunately, the network has gained a negative reputation due to a series of exploits and exit scams. In addition to the BALD rug pull and the latest exit scam, some projects on the network have also suffered significant exploits.


For example, RocketSwap was recently hacked using a brute force method, resulting in the theft of $860,000 in user funds from the protocol. Security firms have stated that the attack was possible due to the protocol's private keys being compromised.


Similarly, LeetSwap, a decentralized exchange, had its liquidity pools exploited for $626,000 worth of crypto assets, causing a pause in its operations. Although some of the assets have been recovered, the DEX has not yet resumed trading.


On a positive note, Base opened to the public on August 9, 2023, and has since experienced steady growth, with over 100,000 daily users just two days after the mainnet launch.


Crypto Total Market Cap at $1.125 trillion | Source: daily TOTAL chart from TradingView
Crypto Total Market Cap at $1.125 trillion | Source: daily TOTAL chart from TradingView


Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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