DeFi faces another scam in the face of airdrops

DeFi industry has attracted several over the past year with its tremendous potential. Many considered that the sector could disrupt our mainstream banks. However, rug pulls, scams, and hack like events seem to have snatched the true potential of the industry. The sovereign fallout of the rug-pulled YEAR token  has offered an acrimonious ending to a commendable 12 months of growth for the DeFi industry.

Scams won’t stop in the DeFi industry

EtherWrapped, a project that is designed to offer a yearly summary of users Non-Fungible Tokens (NFTs) activity, launched a little over eight hours ago to palpable fanfare within the cryptocurrency community. The official website detailed that they planned to airdrop YEAR tokens based on quantitative engagement statistics in the user’s MetaMask wallet.

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The airdrop was based upon the user’s number of transactions, volume traded and gas fees among others. Notably, upon verification on EtherScan, a number of well-regarded developers and engineering experts assessed. One of them observed the presence of a function titled _burnMechanism. However, the devs concluded that the error was harmless by the seemingly amateur creator.

However, later it is revealed that the creator of the project had maliciously planted the flaw to administer the “revokeOwnership” function. Meanwhile, those who connected their wallet and received the airdropped token witnessed their asset soaring in value, and fueled by the alluring propensity of FOMO.

Malicious players used airdrop FOMO

The actions of interacting with the contract or claiming the token would not result in losses. Rather, the ensuing investment into the project on DEXs in the DeFi industry. According to data from EtherScan, the malicious entity was able to launder 59.7 ETH coins. Notably, the total scammed amount was worth $225k. Additionally, Uniswap V2 contract registered $6.8 million in daily trading volume.

Web3.0 grants us power

The latest incident does highlight the critical importance of reviewing and verifying the authenticity and contractual diligence of newly formed smart contracts. Indeed, it comes prior to connecting Web3.0 wallets.

It is notable that decentralization is often in the form of financial distribution. Indeed, it is one of the fundamentals of the ecosystem. In contrast, the previous iteration of the internet curtailed power to centralized Silicon Valley behemoths. Indeed, the ecosystem no doubt promises to grant power to the people.