The ‘craze’ in decentralized finance (DeFi) seems not to be calming as many projects keep launching into the industry, some with unaudited codes. Recently, a DeFi trader unintentionally leveraged a bug in a DeFi protocol, which skyrocketed his $200 initial investment to $250,000. He admitted this in a tweet on September 8.
Faulty project returns huge profit for DeFi trader
As the DeFi trader explained in a series of tweets, he realized the sudden profit from the Soft Yearn (SYFI), which happens to be a clone version of the popular DeFi project, Yearn.finance. SYFI cryptocurrency runs with a rebasing mechanism, which automatically adjusts its supply in accordance with the market demand. Unfortunately, this led to the protocol’s flaw.
Having already bought 2 SYFI tokens on Uniswap for 0.5 ETH (i.e., $100 each at the time) amid the FOMO hovering around the project, the tokens suddenly increased in number at a point. The DeFi trader explained that it was a UI bug, as the tokens’ price on Uniswap wasn’t adjusted in line with the rebase. Luckily for him, he was able to sell the tokens, although he initially thought the transaction won’t be successful.
The tweet reads:
“I am staring at the uniswap UI with bated breath when the 2 $SYFI turns into 15,551, and subsequently the price quote for these tokens being over 740ETH. My immediate thought is: This is a UI bug, it’s going to bait me into sending a transaction I know will fail because of insufficient output amount.”
The disaster in running unaudited projects
Those sell-offs may have drained all the liquidity in the pool. Additionally, reports note that the token drastically dropped in price amid the incident, which perhaps affected the protocol development team, including the project’s investors. The DeFi trader added:
“I did not have any intent to hurt anyone. I did not want the $SYFI team to fail. There was never any malicious intent here. I saw an opportunity, or trade if you will, and I took it.”
