MAG Token Slumps Over 90% As Magnate Finance Rugs Users for $6.4M

Magnate Finance, a decentralized lending protocol built on the Ethereum layer-2 scaling network Base, has rug-pulled its users for $6.4 million. All social accounts tied to the project have been disabled and deleted.

Rug pull is the process where the developers of a crypto project maliciously abandon the project and escape with investors’ deposited funds. In most cases, the bad players create an exit backdoor through which stolen funds can be easily and quickly moved. Many of such projects are often relatively new.

Magnate Finance Rugs Users for $6.4M

Magnate Finance was launched earlier this month. The rug pull was conducted through a price oracle manipulation by the project’s developers. According to the blockchain analytics platform DeFiLlama, a total of $6.4 million has been drained from Magnate Finance, bringing its total value locked (TVL) to $0.

MAG, the native cryptocurrency for the Magnate ecosystem, has plunged by over 90.5%. CoinStats data reveals that the token’s value is currently only a fraction of a cent.

The protocol’s official website is currently unavailable. Its social accounts on X (formally known as Twitter), Telegram, and other platforms, have been disabled.

ZachXBT Gave a Prior Notice

Some hours before the rug pull occurred, on-chain sleuth ZachXBT gave prior notice to the crypto community. Zach, who once survived a rug pull, stated that the deployer address for Magnate Finance is directly connected to a previous exit scam involving a project called Solfire, where $4.8 million was stolen.

Notably, this is not the first rug pull occurring on the Base network. Following its launch in early August, a so-called lending project dubbed SwirlLend conducted an exit scam, escaping with about $460,000 worth of customers’ funds.

Meanwhile, other rug pulls have occurred in the past few months. For example, the Arbitrum-based DeFi project Swaprum rugged its users for nearly $3 million in May. In March, another protocol built on Arbitrum conducted an exit scam, escaping with over $112,000 worth of assets.