Kannagi Finance, a revenue aggregator system based on zkSync Era, was reported to have carried out a rug pull, resulting in significant losses for its consumers.
Kannagi Finance on Trial for Rug Pull, $2 Million in User Losses Observed
MistTrack, a cryptocurrency tracking company, alerted to the occurrence, which revealed that proceeds from the Kannagi Rug were channeled to Tornado Cash in a transaction involving 600 ETH, worth nearly $1.13 million at current market values.
As the community reels from the aftermath, the project’s native token KANA, has seen a steep drop in value. The once-thriving protocol’s total value locked (TVL) has plunged from $2.13 million to almost zero, totaling a stunning $2 million in user losses.
Kannagi Closes Twitter Account
Kannagi Finance‘s confidence was rapidly replaced by fear as word of a likely rug pull spread. According to DefiLlama, a DeFi TVL aggregator, the project’s developers allegedly stole over $2 million in user funds and then fled without a trace. The protocol’s official website appears to have died, and attempts to contact the protocol via social media, including the official Twitter account, have been futile, raising concerns of an exit scam.
Lack of Transparency in Kannagi
Kannagi Finance claimed before its introduction that it would deliver a distinct experience from other yield farming protocols, promising consumers the best yield and trading fee benefits via its KANA tokens. Despite the fact that the protocol was audited on June 6 by SolidProof, an audit agency linked with Germany-based Make Network, the smart contract code remained closed-source and unverified. This lack of openness has harmed the project’s credibility, as users question the audit’s veracity.w
About Kannagi
Kannagi Finance, a DeFi protocol based on the Ethereum Layer 2 network scaling solution, zkSync, launched just a month ago with the lofty ambition of giving high-interest rates on stablecoin deposits and loans. Because of its capacity to bring popular DeFi functionalities to the platform, the project quickly acquired traction within the zkSync community. The allure of high returns with cheap fees/slippage attracted a huge number of investors, resulting in the protocol’s TVL reaching $2.22 million on July 24.
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