DeFi liquidity undertaking MoonSafe is caught in a sea of controversy at current. Not solely do outstanding crypto personalities allege the undertaking is a scam, however an evaluation of its code by Obelisk reveals deceptive claims about how liquidity supplier (LP) tokens are secured.
LP tokens are minted and despatched to the liquidity supplier’s tackle as proof of offering liquidity. They have utility and worth and are sometimes used to yield farm and subsequently multiply good points from the preliminary act of offering liquidity. However, in response to analysis by Obelisk, MoonSafe LP tokens are accessible by the founders.
“One of the main issues with the whole project is that while users are lead to believe that the Liquidity Provider tokens (essentially the receipt for having provided liquidity) are in fact locked and inaccessible from the founders, the exact opposite happens.”
Suspicions Over MoonSafe Heighten
MoonSafe good points since its inception hit 11,500% at its peak. But a sequence of occasions have since tanked its value. The main concern pertains to allegations that the undertaking is a rug pull, solely to line the founders’ pockets.
Source: MOONSAFEUSD on coingecko.com
A whitepaper evaluation highlights a number of inconsistencies, akin to obscure statements on the lock and burn course of and different pink flags, together with a roadmap that doesn’t transcend 2021.
“SafeMoon was advertised as “anti-rugpull” and as having its liquidity locked for four years… And to this present day the web site of the undertaking stays very ambiguous as to how the locks and burns occur.”
Obelisk audited the MoonSafe code, which revealed extra causes to be cautious. They allege charges for offering liquidity are directed to a pockets managed by the developer. To tackle this, Obelisk recommends included a further step to divert these funds to a wise contract with predefined community-centric capabilities.
“To mitigate risks, SafeMoon ownership could be transferred to a smart contract that could be programmed to handle funds securely only using predefined functions. This would be a particularly important factor in terms of security and trustlessness.”
Of extra vital concern is the extent of management held by the devs when it comes to setting the share quantity of charges of every transaction. Meaning, it’s potential to set the charges they obtain, from customers including liquidity, to 100%.
Obelisk states that their code evaluation exhibits a situation conducive to a rug pull.
“This is particularly worrisome as the developers could essentially pull out the liquidity and market sell against any other liquidity provider with the coins that they had received from reflection fees from users. This is the perfect conditions to pull the rug under the users feet.”
CEO Describes Last Night’s AMA as a “Shambles”
In an try to handle neighborhood issues, MoonSafe builders hosted an AMA on Twitch final evening. The video has since been deleted, and by the seems to be of it, so has the corporate’s Twitch channel.
Social media feedback describe it as a farce. One Reddit user mentioned the agency failed to handle any of the issues neighborhood members have.
“So the developers just held AMA where nothing was answered except they had a rapper there who talked about Porsches.”
CEO John Karony described the AMA as a shambles and opted to go stay himself. But it’s unclear the place that occasion passed off, or even when it occurred.
