$2b Rugpull on Polygon - Iron Finance
As you may know (since it has been discussed on LeoFinance Discord for quite a long time) Iron Finance had released new farms/vaults on Polygon. These vaults yielded in TITAN and sold them to autocompound your initial investment which is IRON and USDC. IRON, backed by USDC and TITAN is supposed to be pegged to $1.
However, after TITAN rose to close to $60 in the last couple of days, the APRs went crazy. People were acting like gorillas and buying into it. Iron.Finance TVL went up as high as $2 billion USD. Even crossed it at one point. However, starting this morning, TITAN started to drop... all of sudden for a whopping... 100% loss.
As you can see from the chart, it's a relatively stable drop. So... I delved in deeper.
https://polygonscan.com/address/0xc70652ee438f4a3c234b568fc35f9d918f21e62c#tokentxnsThis address... was doing something interesting. After further research, a conclusion was made.
IRON, as previously mentioned, is a stablecoin backed by USDC and TITAN. When someone buys IRON, they can "redeem" it for TITAN and USDC. approximately 75% in USDC and 25% in TITAN. This address I shared above found a way to exploit this. Starting with quite a sum, the address started buying IRON for cheap (0.98) and minted TITAN. Sold it for a profit (since the amount is big, like $100k, he was able to move the market) by doing this, he not only got 75% of his USDC back, he also got 25% in TITAN, which he sold for more USDC. Then even continued buying more and more IRON and repeating this.
Every single transaction, he was profiting about $3-10k (depending on TITAN price) while causing the TITAN price to drop.
So... why did this not help IRON peg? Because FUD and ultimate bot.
Iron.Finance team could have prevented this by disabling the redemption system or adjusting its fees to make sure the bot does not profit. Or disabling it altogether while implementing a fix. However, they did not.
So what happened?
RUGPULL.
The devs wanted everyone to withdraw their liquidity, so that they can start claiming "oh no, we were hacked", "we were exploited" when it was something completely preventable.
Thankfully, I was nearly the first in, and one of the "mid" ones out. I had faith that IRON would recover its peg. Alas, it did not. I am still in profit so this whole flustercuck just ate into my profits. But it's sad for those who lost quite a lot. Both in TITAN and in IRON.
Posted Using LeoFinance Beta
