It’s now clear that many decentralized finance (DeFi) participants are starry-eyed, expecting to make huge returns in new protocol, while neglecting the possible risks involved. Probably due to FOMO (Fear of missing out), DeFi investors sent about $15 million to an uncompleted DeFi protocol, Eminence. These funds were reportedly drained within a few hours by hacker(s).
DeFi protocol, Eminence loses $15M in a hack
Initiated by Yearn Finance’s Andre Cronje, Eminence is an uncompleted DeFi protocol being established to serve as an “economy for a gaming multiverse.” On Monday, Cronje hinted on the DeFi protocol in a tweet. Cronje informed on the current development stage for Eminence protocol, just before he retired to bed. Many investors in the decentralized finance industry took the whole message as a FOMO.
Profit-hungry investors flooded the DeFi project depositing about $15 million into Eminence, despite it not yet being ready for launch. A hacker allegedly took advantage of the uncompleted project, draining all the funds deposited into Eminence, according to Cronje. Later on, the hacker returned $8 million of the funds to Cronje after he learned of the incident.
2/x 3. These contracts, nor the ecosystem are final, yesterday alone you will notice I deployed 2 separate batches of the contracts, this is my usual “test in prod” process— Andre Cronje (@AndreCronjeTech) September 29, 2020
4. We started releasing some of the art teasers to showcase all the different clans in the game on twitter
The development today shows the extent of risk DeFi investors are ready to make in order to gain massive returns. Despite Cronje explaining that the project hasn’t been finalized, investors could still jump on it. This concedes with the recent survey from CoinGecko that most people in DeFi, especially in yield farming, cannot read smart contracts and the risks involved in them.
Meanwhile, Cronje noted that the Yearn treasury would help to refund investors their stolen capital.