September 9, 2020
A coin that tries to prey off the success of Yearn.finance (YFI) was launched last week.
Labeled as “Soft Yearn” (SYFI), the Ethereum-based crypto asset was launched in the foundation of imitating the price of 0.0003 YFI by rebasing a mechanism popularized by Ampleforth (AMPL). As stated in the project’s website:
“Soft Yearn is an adaptive cryptocurrency that will expand or contract its supply automatically. A soft pegged currency is tied to another currency. When a soft pegged currency has a significant difference from the main currency’s price, the contract or expansion algorithm will converge the market price to the pegged price.”
The cryptocurrency experienced immediate success.
Chartex, a uniswap price tracker, has recorded the coin rallying around 1,000% in the two hours after its launch. At $190, the coin had a market capitalization in millions, notwithstanding its launch just hours earlier.
However, a day after its launch, SYFI has crashed by over 99.9% to under a cent; because of this, the coin has to become the butt of all the jokes on Twitter as millions of dollars’ worth of wealth has disappeared instantly.
The reason for this was that there was a bug in SYFI’s rebasing mechanism that allows an anonymous user to obtain a hefty sum of coins while on a rebase to SYFI = 0.0003 YFI, after that those coins have sold to the pre-base price. Aside from that, a different bug rebased the coin to the target price incorrectly.
These bugs resulted in taking away with 740 Ethereum, lately valued at around $250,000 regardless of whether he only put up about $200 worth of ETH as starting capital.
Now that the user has revealed himself and made a confession, he tells the story of what has happened and what is coming soon.
Anonymous user turned $200 into $250k in Ethereum confesses
Early on September 6, a user from Twitter with the handle “Amplify” has released a 30-part Twitter thread that reveals that he pulled off the imaginable.
“I am the person who sold $SYFI on uniswap at the same time as the Rebase. Or, I am the person who exploited the rebase bug in $SYFI.”
He later identifies himself as someone with a small crypto account, not reaching $5,000. Someone who experimented in the arbitrage, stocks, Robinhood, and many other investment venues got into what exactly happened during that fateful day.
Amplify further explains that he has found SYFI through Telegram groups; this is where users frequently “ape” into coins with perceived inherent value for exponential profits. He then stumbles across SYFI, where he claimed that he instantly made 200% of one ETH by buying the coin when it listed on Uniswap, afterward marketing the top.
Because of its ICO, SYFI was heavily promoted through an Ethereum-based platform named Bounce, was sold out within a minute, as mentioned by some users.
The Soft Yearn team prepared for the coin’s first rebase a day after its launch on Uniswap.
Amplify has expected the coin to hypothetically rally after the rebase took place, but then decides to buy back in with 0.5 ETH.
When the rebase happened due to the bug mentioned earlier, he was offered the chance to sell his sudden influx of SYFI coins for 740 Ethereum, again treasured at around $250,000.
When he took the opportunity, the chances are that other users were likely looking at the same thing as he was, but didn’t pull the trigger:
“I didn’t know what would happen or where this fantastical made-up number in ETH would come from… Now, looking back. This was going to happen regardless. If I didn’t push that transaction through with 500 gwei, someone else would have (and likely did) with 490 gwei.”
As of recent reports, Amplify succeeded, he has drained the liquidity from Soft Yearn pool, he leaves most users with coins worth practically nothing.
He didn’t specifically say that he would be returning the funds; the user has been kind in his replies. He pledges to replace some of the funds to users who held SYFI or liquidity benefactor tokens at the rebase time. He furthered that he will be contributing some of the capital to Gitcoin funding of his selection.
SYFI’s next step
Taking a reputational blow, SYFI intends on moving forward with a re-launch of the coin.
In a recent Discord post, they wrote:
“The Soft Yearn team is devastated by this event. We understand everyone’s frustration and anger, please bear with us while we work on sYFIV2 to fix things. Although this was a major setback, we believe we can come back stronger as we initiate our migration plan.”
It is worth noting that a project trying to accomplish a similar feat to Soft Yearn, the Chainlink-focused Soft LINK, having a mere $1.3 million market capitalization three weeks after its launch.
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