How one crypto dev built a $7.5 billion 'active' DeFi ecosystem
Decentralised finance (DeFi)
Modified Date:- Published Date:-Categories: Cryptocurrency
How one crypto dev built a $7.5 billion 'active' DeFi ecosystem
The McIlho brothers, founders of Solana's leading cross-chain stablecoin exchange, Saber Protocol, allegedly used multiple pseudonymous developer profiles to pump and counterfeit US$7.5 billion of Total Value Lock (TVL) on the Solana blockchain. are doing.
An investigation by CoinDesk revealed that Ian and Dylan McIlho collectively misrepresented themselves to identify 11 independent developers who were working on different projects. In doing so he created the illusion of an active developers community on the Saber protocol, thereby artificially stimulating investment demand for it and the entire Solana ecosystem.
Ian McIlho, coding as 11 independent developers, created a vast web of interlocking DeFi protocols that estimated the value of double the billions on the Saber ecosystem. In turn, the TVL on Solana temporarily increased, which became a problem because DeFi treats the TVL as a barometer for on-chain activity. By posing as collective developers, Ian McIlho was able to artificially increase Solana's TVL to US$7.5 billion of Solana's US$10.5 billion TVL.
As the TVL of the DeFi platform grows, so does its liquidity, popularity, and utility, making it an important metric for investors. In an unpublished blog, McIlroy acknowledged the creation of the false TVL, writing: “If an ecosystem is built by a few people, it doesn't seem that authentic.
In response to CoinDesk's investigation and the effects of increased TVL, crypto data website DefiLlama has changed the way TVL is presented. By turning off its default performance of the protocol's double-count crypto-assets, it has reduced the TVL of some blockchains to billions of dollars. As a result, users have to activate the double-counted value manually. Solana has been in the news for the wrong reasons for some time now.
Last month, Solana-based liquidity protocol Crema Finance suffered a US$8.7 million hack involving Solana-based lending platform, Soland. Just a few weeks ago, Soland voted to terminate whale accounts in order to reduce risks to the Solana network.
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