Polywhale Team Jumps Ship Amid DeFi Rug Pull Accusations

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In Brief
  • Polywhale team makes off with $1 million.

  • Treasury wallet was emptied by developers.

  • KRILL tokens collapse to 99.9% from all-time high.

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The Polywhale decentralized finance (DeFi) protocol has been shut down with the team selling off their tokens in what appears to be the latest rug pull.

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The Polygon-based yield farming project initially announced that it would be ceasing work on the platform in a Reddit post on June 20.

The team cited a number of reasons for pulling the plug on Polywhale including a failed tokenomics model, the massive market slump, competition “destroying them,” low rewards from linked DeFi protocols, and even personal health issues.

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“We do not want the project to die, hence trying for so long but it’s taking its toll on our mental and physical health. So we are giving it one last chance by offering it up to the community.”

$1M DeFi exit scam

The official Telegram group and the project’s Twitter page have been locked or deleted and the community had started to suspect a rug pull or exit scam.

This message had been posted on a new “Polywhale Rugged” Telegram group:

“ATTENTION: THE TREASUREY WALLET HAS BEEN DRAINED ALMOST ENTIRELY INTO THE DEV WALLET AND then 1.04 MILLION REDEEMED FROM THERE,”

One specific transaction confirms that that the Polywhale team drained over $1 million from the treasury and sent the tokens to their own wallets.

The poster elaborated that this is the treasury wallet which was sitting at 5 million tokens on June 9. Members of the community monitoring the treasury wallet were banned from the group with posts deleted after pointing out that it had gone down to 1.6 million tokens.

The team behind the embattled project made off with 1.04 million in USDT leaving those that had held on to the KRILL tokens with virtually nothing.

Polywhale was launched in April 2021 by an anonymous group to offer yield farming on the layer 2 aggregator, Polygon. Polywhale had a last reported total value locked of $4.2 million according to the platform dashboard.   

KRILL tokens no more

The protocol’s KRILL token surged to over $180 in late April after the platform was launched. Prices tanked to around $5.50 by the beginning of June according to CoinGecko, and alarms should have been sounding.

KRILL is now lulling at the bottom of the DeFi ocean at $0.13 following the rug pull – 99.9% down from its peak.

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Martin has been covering the latest developments on cyber security and infotech for two decades. He has previous trading experience and has been actively covering the blockchain and crypto industry since 2017.

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