In brief

  • A DeFi application lost $31 million a day after launch.
  • Some within its community claim that the whole thing was a "rug pull" scam.

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Just a day after launching on the Binance Smart Chain, decentralized finance project Meerkat Finance today put out a message saying that hackers stole $31 million from the wallets. However, investors think that something is afoot: They think that Meerkat’s developers have made off with the cash. 

The yield farming protocol put out a message this morning that someone had raided its wallets, according to a report from The Block. Shortly thereafter, someone drained the project’s vaults of $31 million of funds—13.96 million in Binance’s stablecoin, BUSD, and a further 73,000 BNB, Binance’s crypto, worth about $17.4 million. 

Since then, the project’s Twitter account and website went offline and its founders are unreachable. This has sparked allegations of fraud. “This may be the largest fraud project on the Binance Smart Blockchain,” tweeted Wu Blockchain, a prominent Chinese crypto blogger. 

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A Binance representative told the exchange’s Chinese Telegram channel that it’s investigating the alleged rug pull and linked to a community support page, reported The Block. Decrypt has reached out to Binance and will update this article with any response.

Binance Smart Chain is Binance’s proprietary blockchain. Critics say that it’s centralized, and thus not in the ethos of the technology’s commitment to decentralization since Binance can rollback transactions on the chain. However, if Meerkat Finance turns out to be a rug pull, that could turn out handy to investors who just lost their money to the one-day-old smart contract. 

While Binance puts out this fire, it must also put out several more to fight back against allegations that many of the projects on its network are Ethereum copycats. Musical Beats, an alleged copycat version of the Ethereum NFT project EulerBeats, also abruptly shut down earlier this week not long after initially launching.

BSC developers would be wise to avoid copying everything from Ethereum, which has also weathered its fair share of rug pulls and Ponzi schemes. 

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