• Magnate Finance, a lending project on Base, has conducted an exit scam and drained the protocol of about $6.5 million.
• This is not the first rugpull to occur on Base, as BALD and SwirlLend have also been exploited in similar manners.
• This article offers tips to avoid becoming a victim of these kinds of scams in the future.

Magnate Finance Exit Scam

Magnate Finance is the latest project to have pulled an exit scam on Base, draining the protocol of an estimated $6.5 million according to blockchain security firm PeckShield. The exploit was performed by manipulating the price oracle for DAI and WETH tokens on the protocol. Following this exploit, the project’s developers have erased their social media presence and their website is no longer accessible.

Previous Rugpulls

This is not the first rugpull to occur on Base in recent months; BALD and SwirlLend were previously victims of similar scams, which cost investors millions of dollars collectively. On-chain sleuth ZachXBT had warned investors of this rugpull just two hours before it was reported by PeckShield, linking it to previous rugs like Solfire ($4.8 million) and Kokomo Finance ($5.5 million).

What Is a Rugpull?

A rugpull occurs when project developers suddenly abscond with user assets or dump their holdings on investors, driving down its price into a death spiral. These scams are prevalent in crypto space but tend to thrive more when there is hype around a certain asset or network – as we’ve seen with Base’s rapid growth over recent months – making it attractive for bad actors looking for opportunities to exploit unsuspecting users with little risk involved for them personally.

How To Avoid Being Scammed

Rugpull projects typically appear out of nowhere with anonymous developers, low liquidity that’s often unlocked (allowing them easy access), token supply concentrated with only a few wallets associated with them, and often haphazardly put together websites seemingly designed only as cover-ups until it’s too late for anyone to do anything about it once they scam off with funds collected from unsuspecting users who believed they were investing in something legitimate . To protect yourself from these kinds of exploits: be wary when engaging projects offering high returns; investigate any anonymous developer team; research thoroughly any project you’re considering investing your money into; pay attention if there are signs that liquidity has been unlocked; check token supply distribution (and double check if most token holders are anonymous); and finally never invest more than you can afford to lose .

Conclusion

Rug pulls continue to plague networks like Base as its popularity continues growing . However , following these tips should help you stay safe while searching for investment opportunities .