Imagine you are without family, friends or any human touch and you have this chessboard. What would you do? You'd try to play the game from both side of the table. Now imagine if I give you the million dollar funds in the crypto contract and tell you to make exit without sounding like a rug pull. How would you do it? Here's where fund stealing scam comes into the play.

So like my regular posts, this post too is going to put on a light on a pattern of a scam where you will find out how scam happens with crypto. Today let's take an example of one of the token which turned out to be a scam in a creative way.

Uranium Finance Story

Let's take the example of the uranium finance, where they had around 50 million funds in their DeFi. And they made a claim that funds were clean from their contract. Now who would you blame? Let's create a fictional hacker or the security people who found the exploit in the chain and decided to scam. Usually such type of the companies have their own people taking it out the funds and selling it in the market.

This happens very much systematically. Where the money moves to the rogue account and it goes to the exchanges through the swaps and then the funds get moved to the unknown crypto account which too gets swapped and then funds taken out. By the time the exchanges can do the connections it is going to be too late and everything as a proof would be wiped out.

So How is the template working?

Basically you create a product then get people to invest into that product and then have people ready to steal that product through some form of the hack. Which is going to make things a bit difficult to extract for the consumers. They can't even blame you back for anything lost in the funds. It's an exploit by hacker. Hacker that is placed by the same company.

Mt.Gox had the same issue, but they decided to come back to market because they realized crypto is more fun when you can serve people legit way and have them taxed more at exchange level. This is something you should learn and take note of especially in case of those rogue DeFi projects and the exchanges who happen to host them.

In Short...

You create a DeFi and token to be a good guy. And then create an exploit and take the funds out by being a hacker. So you play the chess as a white and dark, both sides. So does that mean we should stop investing into DeFi? I don't think so. DeFi, CeFi and other methods that are coming out for the finances on crypto have some flaws and it all comes down to trust.

If you have seen the signs of anything becoming rug pull and having low transparency, then it is going to bite you. There is no way you can fix that in near future as it involves some intuition, facts and trust. You choose what to do with the same based on that combination. There is no fix for such type of the things, those who designed to make a scam will turn it into scam.

You have to literally see the signs of it being scam by taking the risk sometimes.

Apparently some DeFi's are scams. Some are not. We just get lucky in most cases.

Just understand the fact that if they blame hacker or exploit, they are the scammers.