Merlin Labs, a decentralized finance (DeFi) yield optimizer built on the Binance Smart Chain, abruptly revealed today that it has seized operations.
The announcement follows an over $300k exploit on the protocol earlier in the day and caused the price of the token to drop from around $15 to $0.2 at the time of writing. At its peak, Merlin Labs had over $100 million worth of assets locked in its vault with users able to deposit BSC-based liquidity provider (LP) tokens to earn higher yields.
For the record, the project has suffered three exploits within the space of two months, despite claiming that its code has been audited by three independent security companies, notably including Certik. Merlin Labs is a fork of the more popular yield platform, Pancakebunny, which was also hacked last month.
A pinned message on Merlin Labs’ Telegram channel notes the recent exploits as the primary reason why the protocol is shutting down.
Most of you have heard that we have been exploited by a technical flaw within our code. Whilst the development team has engaged an external independent security auditor at every step of our code of development, it has been communicated that this was an oversight by both parties.
The message continues:
This time our development team, with honest tears, shared with us that they did not feel comfortable keeping the project going and felt too inexperienced to provide our community with a safe space.
Worth noting that users who deposited LP tokens in Merlin Labs finance could still withdraw their funds with no losses other than earned yield. However, investors who deposited the project’s native token to earn over 400% APY yield are the major losers.
Merlin Labs (MERL) Token Price Dumps
Following news of the earlier hack, the price of the MERL token had dropped by 50%, moving from $15 to $6 within the space of a few hours. However, the latest announcement that the project will be shutting down dealt another blow to the token’s price. MERL has dropped by over 98% as investors head for the exits.
Your crypto deserves the best security. Get a Ledger hardware wallet for just $79!