The developers of one of the leading DeFi projects on the Polygon network, called Polywhale Finance, sold all of their project tokens and announced the termination of development.
Polywhale Finance users accuse the developers of a “soft exit scam”, when the founders of the project do not directly steal tokens and user funds, but sell their tokens and make a profit without caring about users.
In their message, the developers write that they will not continue the development of the project. They cite the poorly designed tokenomics of Polywhale Finance, negative market outlook and competition from other projects as the reasons. The project group in Telegram was closed almost immediately after the announcement of the termination of development.
However, users believe that the developers simply attracted the audience in order to make a profit in a fraudulent way. So, disgruntled community members created a group called Polywhale Rugged, where the sticky message reads:
“Attention! Almost all tokens were transferred from the project storage wallet to the developers’ wallet and 1.04 million tokens were withdrawn from there. ”
As of June 9, there were about 5 million tokens in the project’s storage, but at the moment their number is 1.6 million. As one of the users noted, the developers withdrew funds within five days.
“This is not just a project closure, this is an exit scam!” – said one of the members of the Polywhale Finance community.
The DeFi Polywhale Finance project was launched in April 2021 by an anonymous group of developers. This is a profitable farming project that attracted users with extremely high earnings – the annual income, according to the developers, could exceed 1,000%.
After the exit scam, the project token fell by 93% from $ 1.5 to $ 0.13. Following Polywhale Finance, similar actions were taken by Polycash Finance and Polysa Finance, but the scale of these projects is much smaller.
In late May, Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), said the DeFi industry posed new challenges and risks for investors.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
