Blur Finance (BLR), a DeFi altcoin project, has dropped close to 100 percent in a short period of time. The drop appears to be due to a “rug pull”. At least, blockchain research and security firm PeckShield thinks so. Here are the details…
PeckShield issues rug pull alert on this DeFi altcoin project
Blockchain security firm PeckShield issued an alert to Blur Finance this morning. The company tweet states that BLR went down due to “rug pull”. Blur Finance’s Twitter account appears to have been deleted. It is also thought that about 600 thousand dollars were stolen through the BNBChain and Polygon networks.
While BLR was a cryptocurrency that saw $ 0.0704 in the last 7 days, it retreated to $ 0.0005906 as a result of 98.95 percent depreciation. Interestingly, the BLR recorded its all-time high on August 4, 6 days ago, according to data from CoinMarketCap. It is unlikely to see record levels in this market where many cryptocurrencies are suffering.
At this time, global legislation for cryptocurrencies has not yet been created. As a result, many investors have fallen victim to fraud. Therefore, it is always recommended to do due diligence before investing in any crypto project.
Why is rug pull popular that users should pay attention to?
“Rug pull” is a type of fraud that has been observed lately, especially in the field of decentralized finance (DeFi). The ease of scams may be the reason why it’s so popular. According to the report on fraud by crypto analytics platform Chainalysis, creating new tokens on Ethereum or another Blockchain and listing that token on decentralized exchanges (DEXs) or peer-to-peer markets for crypto traders is a fairly simple process.
Code audits are important for security. Because it evaluates any new code in terms of errors, quality standards determined by the organization. According to a report by London-based Elliptic, malicious developers can more easily introduce “bugs” or flaws without evaluating the code in smart contracts, creating “backdoors” to steal user funds and exit scams.
A common feature of rug pull scams is that a new crypto project has low liquidity, meaning it is difficult to cash out the coin or asset. Experienced crypto traders avoid entering projects with little liquidity due to volatile prices and the risks of price manipulation. The first step in preventing rug pull is to thoroughly research the crypto project before investing. So, “doing your own research (DYOR)” is a must to avoid such scams.
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