Skyward Finance Falls For $3.2 million
In today's edition of YIYL, (You Invest, You Lose) we had back to the ever-failing DEFI space, as the projects left over from the bull market fight for the remaining liquidity, there is now also a set of players reviewing these services to see if there could be ways to backdoor into those funds.
Many of these projects were created during a time of speculation and when you create a project in that climate, you tend to skimp on security and safety processes. This is evident by the number of hacks we've seen in the last few months.
I also think that a percentage of these hacks are self-inflicted, a way to access customer funds and exit scam without having to take the blame and blaming a "3rd party" for your obvious failures. If you blame a "hacker" and pretend to go through the process of recouping funds or offering to pay users in inflation while you take the real cash, why wouldn't you do it?
Since none of these projects are decentralised, I can't see how every person in this space would be altruistic when they could easily nab a few million for very little work.
While bitcoin is built on proof of work, shitcoins are looking to avoid work at all costs and rather profit off of the work of others, by creating an endless series of rent-seeking merry-go-rounds.
So near and yet so far
Skyward Finance is a project based on the NEAR blockchain, aiming to help users with initial token distribution (ICO's). Skyward Finance allows you to buy unregulated securities hoping that once the project launches you would have gotten in early enough to dump your token once these projects are added to exchanges with a lot more liquidity.
We are in no short supply of shitcoins and having a platform to launch more shitcoins just seems like a total waste of resources but to each their own, if people want to gamble on digital penny stocks by all means, but there is only going to be one winner, well two, the house and the project.
In some cases, there is a third winner, and that third winner profits by stealing from projects capable of suckering in others. The predator becomes the prey and the shitcoin food chain continues to eat at each other until only a few are left.
This seems to be the case with Skyward Finance, as reports surface that the project's treasury was drained of 1.1 million NEAR (~$3.2 million) after a hacker discovered a vulnerability in the project's smart contract.
Crypto exploit research group Rekt wrote,
"The fact that it took over a year for anyone to find this relatively simple exploit is remarkable." and questioned, "Was this incident an honest, albeit simple, mistake? Or a planned ejector seat?"
This is always my question if the project isn't flash loaned attack and its a compromise of keys or the contract, I think you should always consider those close to the project when looking for suspects, I am not accusing anyone, I am just thinking from a logical point of elimination.
The project was unusually frank in its announcement, writing on Twitter that the hack had "render[ed] the Treasury and the $SKYWARD token effectively worthless...
We recommend users to withdraw their funds safely where they can and for the community to no longer interact with Skyward."
https://twitter.com/skywardfinance/status/1587947957789331457
Now that is a sound of a team that has given up and knows their time is up, I think that the bear market really shows who the tourists are and who can do the economic calculation, and manage their funds securely.
It's always amazing to see how these projects that offer seemingly nothing are sitting on funds that any traditional business would love to have, and would put to far better use in generating goods and services.
Talk about the price
Since the news broke the token has been dumped hard, this could be a combination of the hacker trying to get out as soon as possible but according to reports, the Hacker got Near tokens, not their native token, unless, that NEAR tokens were used to do market making for the Skyward Finance native coin.
Alternatively, it could simply be people thinking it's time to get the fuck out while this thing hasn't hit zero and are willing to accept any price for their tokens, who the fuck knows or really cares?
The price has been ripping down from $12 to $0.89, its all-time low was $0.56 since the hack, so it really has been taking quite the bashing with a 99% loss.
While this drop in price is painful, the reality is that 10 months ago in January this token was trading at $100 so reverting to below a dollar has to have rekt quite a few people on the way down.
Again, another lesson in why you shouldn't muck about with shitcoins, and hopefully a few learn their lesson.
Sources:
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