Skip to content
Warning: do not try and emulate this.
Soft Yearn is a copy of Yearn.Finance protocol with a minor twist. SYFI will auto adjust its supply automatically through a process called "rebasing". This allows for a fine tuning of supply/demand in accordance with current market dynamics.
Here is an example:
You hold two SYFI valued at $100 each. The total value of this is $200.
Rebase event is set to occur. At this time, your two SYFI will become two thousand valued at $.01 each. This rebasing changes the base denomination of valuation.
You now have two thousand SYFI valued at .01 cents each. Same value.
Here is what actually happened:
1. The trader bought 0.5 ETH equivalent of SYFI prior to the rebase.
2. The rebase event occured, and two SYFI became 15 551 equivalent.
3. The price on uniswap did not update with the rebase event.
4. The user chose to sell his 15 551 SYFI at the equivalent price to when he had 2 SYFI.
5. This drained 740 ETH from the liquidity pool, effectively pulling the rug out from the entire SYFI market and resulted in Soft Yearn going to $0.
Intentions, Capitalization, and an Example..
If this individual did not capitalize on this bug, then someone else would have. Considering this was an unaudited code, it calls into question if it was intentional. Did he discover how the devs were planning on exit scamming? Regardless of the outcome, it was an inevitable outcome within the context of project/code design.
I do not think that this an event that can be recreated. It was one hell of a trade, but now it has been aired in public. Rebased currencies will be under intense scrutiny, and maybe (just maybe) defi projects will have increased levels of auditing prior to launch - but this seems like wishful thinking.
This adds to the long long list of DEFI exit scams/rug pulls/going to 0 that have been occurring recently. If you do not understand the logistics of risk behind your investment, or have a throughout understanding of what "can go wrong", then you have no place investing in it.