The latest trend in Decentralized Finance (DeFi) is copycat projects where the code from a reputable project is literally copy and pasted and slightly modified. An excellent example of this is SushiSwap, a hastily built project that netted $1.4 billion of total value locked before the developer dumped the entire dev fund and made a quick $13 million, collapsing the market.
Yet another copycat project is Soft Yearn (SYFI), which simply copied and pasted the code from popular DeFi project Yearn.Finance and modified it a bit. Apparently the one modification is that the token supply contracts and expands automatically, and in this one modification a serious code bug arose.
Indeed, one of the biggest problems with the DeFi frenzy in recent weeks is that new projects are launching with unaudited code, and despite not being thoroughly vetted these projects are gaining tremendous amounts of investments. This is leading to spectacular failures like the collapse of YAM.
Back to Soft Yearn, a crypto user who had been heavily involved in DeFi, often staying up through the night to buy and sell at the exact right time, hit the jackpot.
This user purchased two Soft Yearn (SYFI) for $200 right before the rebase, with a rebase being when a DeFi project’s token supply is altered. The rebase had a bug however, and the two Soft Yearn (SYFI) turned into 15,551 Soft Yearn (SYFI) worth 740 Ethereum (ETH), equivalent to $250,000.
The crypto user who encountered this couldn’t believe their eyes, and only had seconds to respond, since they realized if they waited until the next block this bug would disappear. They submitted the transaction and got the Ethereum (ETH) to their shock, and became rich, after years of barely making a living from crypto trading.
Although this was a major win for this crypto user, that transaction drained Soft Yearn’s (SYFI) liquidity and the project collapsed, causing everyone else involved to lose 100% of their money.
Soft Yearn released a statement on this situation, and called the crypto user who hit the jackpot a malicious actor, and offered a bounty.
Essentially, Soft Yearn tried to claim that they were hacked, when in fact it wasn’t the crypto user’s fault at all, and the crypto user did not perform any hacking, but rather it was Soft Yearn’s fault for not properly vetting their code.
Thus, another DeFi tragedy has just occurred with the rapid boom and bust of Soft Yearn, but out of this tragedy comes a miraculous story of a crypto trader turning $200 into $250,000 and going from poverty to wealth, which is the dream of every crypto trader.