Binance smart chain platform Meerkat has lost $31 million worth of BNB tokens in a scam known as “rug pull”.
Meerkat is a DeFi project operating on the exchange. And this loss has led many DeFi customers to question the security of other protocols. The incident occurred around 9 am UTC when the Meerkat team regarded it as an exploit.
However, they went further to exclude all their social channels, and many people suspect that they have also liquidated & pilfered Meerkat user funds.
Meerkat is a fork of Yearn Finance, and it hasn’t lasted more than a few hours before this incident occurred. According to what on-chain transactions show, a particular address upgraded the protocol’s deployer contract to permit it to liquidate vault holdings.
While users are making complaints about their losses on Binance’s community channels, the exchange hasn’t made any official statement about the incident.
However, the users believe that Binance can track down the miscreants using its privacy-preserving tool, such as Tornado Cash.
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Implications of Meerkat Incident
There is an ongoing concern over security amongst BSC users. The fear is justified due to the incidents that have been happening in the protocols.
For instance, Yield lost all the funds in its stablecoin Dai vault last week. After the exploit, the team stated that the incident occurred as a result of Yearn code flaw.
According to the blog, the team of Yearn developers immediately patched the flaw, but other projects may be exposed too.
Many Ethereum DeFi protocols engage in forking, but Binance Smart Chain has taken it to another level. Now, many staple Ethereum DApps and art projects operate exactly like Binance. This means that all the attack vectors that led to a hot summer for Defi protocols are likely to resurface again.
Even though forking and centralization pose a huge risk for DeFi protocols, the BSC cheap transaction attracts many Ethereum Devs. Many of them, including the 1inch team, Harvest Finance Hacker Steals $24 Million From Liquidity Pools on Harvest Finance team, Sushiwap, and Value DeFi teams, are already moving to the chain.