Ethereum’s first L-2 solution, Arbitrium, has come under the spotlight after newly launched DEX ArbiSwap is suspected to have sidelined users by removing over $100,000 from the platform’s liquidity pools.
In the last 24 hours, ARBI tokens have fallen from $1.5 to a fraction of a cent at press time. On-chain data also sheds light on the rogue developer’s action.
It revealed that around 1 billion fake tokens were minted and then exchanged for USD coins [USDC] and then for about 69 ethers [ETH].
Reportedly, the fact that the liquidity pools were largely under the control of developers may have made it easy to shut up shop and escape.
For these new ones, liquidity pools refer to the token pairs held by smart contracts on decentralized exchanges, with developers initially occupying both sides of a token pair.
As of the early hours of Thursday morning in Europe, only $4 million was available on ArbiSwap, according to blockchain data from DEXTools. After the service launched in February, its total value quickly grew to $4.4 million [TVL].
Users’ immediate interest in ArbiSwap was likely sparked by DEX, which was offering ARBI holders 100% of all earnings generated on their platform in exchange for their ARBI holdings.
The above action is a classic rug pull: developers set up a working decentralized finance application, use social media to promote it, then create a token and list it on a decentralized exchange [DEX].
The developers shut down the deal, reducing liquidity and disappearing after investors bought the tokens in hopes of a profitable investment.
The action of another Ethereum NFT project triggers rug pull claims
After earning more than $5 million in ETH in last year’s coin, Friendsies, an Ethereum NFT project by venerable art team FriendsWithYou, has made a major announcement.
The team behind the Ethereum project recently announced that they would “stop” any future ambitions for the project before reportedly removing their Twitter account, prompting claims of a “carpet train.”
Currently, some community members are making a plan to take over and continue the project.
The now-deleted tweet thread read: “As the creators of the project, we decided it would be better to stop [Friendsies] and all future digital items for now.
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