Swaprum recently fell victim to an exit scam, commonly known as a rugpull, resulting in the loss of $3 million worth of ether (ETH) tokens. This incident has sent shockwaves through the cryptocurrency community, highlighting the need for increased security measures and vigilance in the fast-paced world of decentralized finance (DeFi).
Swaprum, operating on the Ethereum layer-2 network Arbitrum, garnered attention for its enticing offerings. The exchange boasted high farming rewards, low swapping fees, and the potential to earn up to 100% annual percentage yield (APY). These features made it an attractive platform for investors looking to capitalize on the booming DeFi market.
The rugpull was brought to light by blockchain security firm Peckshield, which discovered that approximately 1,628 ETH, equivalent to around $3 million, had been drained from Swaprum’s liquidity pools. The exit scam occurred in the late hours of Thursday, catching users off guard and causing significant financial losses.
Upon closer examination, blockchain security platform Beosin revealed that the perpetrators had implemented a backdoor function within the Swaprum smart contract. This backdoor function enabled the theft of liquidity pool tokens staked by users. By exploiting the add() function, the scammers successfully drained the liquidity pool, siphoning off funds for their own benefit.
The Aftermath and Plummeting Token Value
The repercussions of the rugpull were severe, particularly for Swaprum’s native token, SAPR. The token’s value plummeted by a staggering 99%, with SAPR trading at a mere $0.000022, down from its previous price of $0.147 before the rugpull. CoinMarketCap data indicates that the token’s 24-hour trading volume also experienced a significant decline, reaching a meager $83.
As users sought answers and accountability, they discovered that Swaprum’s social media accounts on platforms such as Twitter, GitHub, and Telegram had been deleted. This disappearance further compounded the suspicion surrounding the rugpull and left affected users with limited channels to voice their concerns or seek recourse.
The Swaprum rugpull stands out as one of the largest exit scams to occur on the Arbitrum network. It surpasses the notorious exploit that targeted DeFi protocol Hope Finance, which suffered a $2 million loss in February. In that incident, a Nigerian hacker allegedly deployed a fake router on the platform, taking advantage of vulnerabilities to perpetrate the theft.