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.
SwirlLend Lending Protocol Has Been Rugged, PeckShield Confirms
On Wednesday, August 16, blockchain security firm PeckShield confirmed – via a post on X (formerly Twitter) – that the team behind the SwirlLend protocol executed an exit scam, making away with roughly $290,000 in user deposits on Base.
PeckShield’s on-chain analysis reveals the protocol’s developer bridged about $289,500 worth of Ether and USDC tokens from Base to Ethereum, and the deployer reportedly has about 92ETH of the loot left on Base.
Barely minutes later, PeckShield posted an update, stating that SwirlLend has also been rugged on the Linea chain. According to the security firm, the protocol’s deployer bridged about $170,000 worth of ETH from Linea to the Ethereum network via Orbiter Finance.
The total value locked (TVL) on the SwirlLend protocol has collapsed from nearly $770,000 to a mere $49.21, according to data from 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, an Ethereum Layer 2 network built by prominent crypto exchange Coinbase, has been in the headlines for all kinds of reasons in recent weeks.
Unfortunately, the network has seemingly developed a negative reputation after a series of exploits and exit scams. Besides the BALD rug pull and this latest exit scam, Base has also seen some projects on its network suffer significant exploits.
For instance, RocketSwap recently fell victim to a “brute force hack”, which saw $860,000 of users’ funds stolen from the protocol. According to various security firms, the attack was possible due to the compromise of the protocol’s private keys.
In a similar situation, decentralized exchange LeetSwap saw its liquidity pools exploited for $626,000 worth of crypto assets, leading to a pause in its operations. Although some of these assets have been recovered, the DEX has yet to resume trading.
On a positive note, Base opened its doors to the general public on the 9th of August, 2023. The network has since been experiencing steady growth, exceeding 100,000 daily users only two days after the mainnet launch.
Crypto Total Market Cap at $1.125 trillion | Source: daily TOTAL chart from TradingView
Featured image from Outlook India, chart from TradingView
Source: https://bitcoinist.com/base-defi-protocol-460000-rug-pull/