New $5M exit scam fears as DeFi grows on Base with 1inch Network launch

1inch Network has announced its expansion to Base, a Layer-2 Ethereum scaling solution incubated by renowned crypto exchange Coinbase.

This strategic move aims to offer 1inch users access to deeper liquidity, lower transaction costs, and higher speeds, further enriching their trading experience.

However, the news comes as a warning regarding an impending exit scam by Magnate Finance was issued earlier today by user ZachXBT on X.

Magnate Finance exit scam fears.

Magnate Finance, with a Total Value Locked (TVL) of over $6.4 million on Base, is suspected to be linked to a previous exit scam involving Solfire that resulted in a $4.8 million rug pull in January 2022. The deployer’s address for Magnate Finance has been identified as the same as that linked to the Solfire scam, as reported by CertiK Alert.

Certik reported that within an hour of ZachXBT’s tweet, Magnate Finance seemingly vanished, removing its website and social media accounts. This raised further suspicions about the project’s legitimacy.

However, the plot thickened when it was revealed that the deployer account had manipulated the price oracle provider. This action enabled them to drain $5.3 million of liquidity by providing fake collateral, according to CertiK.

Further, CertiK reported that before this alleged exit scam, the project had peaked at a TVL of $6.4 million. Furthermore, $2 million USDbC, 946 ETH (approx $1.56 million), $1.3 million DAI, and 247 WETH (approx $408k) were drained from the project, further exacerbating the situation.

1inch opens liquidity for Base.

1inch Network reported on Aug. 24 that the 1inch Aggregation Protocol and the 1inch Limit Order Protocol have been deployed on Base to the delight of its co-founder, Sergej Kunz.

He expressed confidence in Base’s potential, particularly with the backing of a dominant player like Coinbase, and lauded the shared philosophy of broadening blockchain adoption to the subsequent billion users.

Built as an Ethereum Layer-2 scaling solution,…