A new DeFi project presents an opportunity for investors to become early adopters and reap the rewards of taking such a risk. On the other hand, things can go sideways and an exploit can quickly put an end to any tender hopes and dreams. Now, as a section of the Fantom community struggles to get out without getting hurt, here’s what you need to know.
Call the ghostbusters!
Fantasm Finance, introducing a “Fractional-Algorithmic Synthetic Token” pegged to 1 Fantom [FTM] on Fantom Opera, saw a hacker exploiting its FTM collateral reserve. Later, the hacker took more than 1,000 ETH – roughly $2,620,546.31 at press time – and moved it into Tornado Cash, a mixer that makes it harder to trace the origin of crypto assets.
— PeckShieldAlert (@PeckShieldAlert) March 10, 2022
At press time, the Fantasm XFTM [XFTM] token had lost 98.06% of its value in 24 hours, and was worth just $0.02743. It was once worth $1.82. Meanwhile, Fantasm FSM [FSM] was trading at $4.37, having plunged by 70.65% in a day.
However, considering that the Fantasm Finance project only launched on 28 February this year, the early exploit triggered rumors among some investors about the project being a rug pull.
However, for its part, Fantasm Finance tweeted an apology and said that it was looking to publish a post-mortem of the incident. In the meantime, it warned investors to redeem their XFTM and leave liquidity pools immediately.
Adding to the confusion, Fantasm also announced that some of its collateral had been exploited by a white hat hacker. No doubt many will be waiting to get their hands on the technical post-mortem report.
we apologize for the exploit event which just happened.
A Post Mortem with compensation options will be published by tomorrow. We are analyzing the exploit right now.
Most sincere apologies once again.
— Fantasm Finance (@fantasm_finance) March 9, 2022
Feeling a little spooked?
While the exploit led to XFTM and FSM hemorrhaging value, it seems that FTM investors got spooked as well. At press time, FTM was trading at $1.27, having plunged by 10.51% in the last 24 hours. Looking at exchange supply, we can see a rise in the number of FTM coins leaving wallets and coming to the exchanges. This is a strong sign of sell-offs.
The Fantasm exploit comes days after the Fantom community suffered a shock, when Andre Cronje and Anton Nell, two senior Fantom Foundation execs, announced that they were leaving DeFi.
Nell’s following announcement about 25 apps being terminated also triggered panic selling from 6 March. Cronje had previously written about his frustration with the DeFi community and its quick rich culture.