BaseBros Fi Disappears: DeFi Protocol Pulls Off Major Rug Pull by Deleting Website, Social Media
BaseBros Fi, a DeFi yield optimization protocol operating on the Base blockchain, has surprisingly disappeared, leaving investors speechless and their funds inaccessible. This project, which had promised its users lucrative yields, deleted its website and social media accounts-one of the first warning signals that raised questions about more than just the security of the funds, but rather trust in the sphere of decentralized finance.
BaseBros Fi’s Vanishing Act: What Happened?
It was observed on September 13, 2024, that BaseBros Fi deleted its existence online altogether. The website went black, and then their social media handles – X and Telegram – were deleted without any prior notice. It instigated panic among investors that had staked their funds into the platform with the hope of earning returns astronomically through the strategies promoted by BaseBros.
Further investigation showed that it wasn’t just a technical disappearance issue but a deliberate rug pull, in which the project operators had exploited an unaudited smart contract to drain user funds from the platform and make off with the assets.
BaseBros Pull Off $130,000 Heist
The unaudited Vault contract of the BaseBros team was attacked, and through it, nearly $130,000 in crypto assets were siphoned away by the attacker. These funds were quickly routed through Tornado Cash-a notorious cryptocurrency mixing service that has specialized in obscuring the source of transactions-thus complicating the process of tracing the stolen asset.
The BaseBros’ sudden disappearance came as a shock in the community. Before that, the project had been heavily advertised. It had gathered more than 2,000 followers on X and over 3,300 members on Telegram. This protocol positioned itself as one with high returns on investment, peeling off the rising popularity of the Base blockchain.
Audits and Oversights: Where Did It Go Wrong?
But perhaps one of the more concerning factors in the BaseBros incident was the way their audit process-or lack thereof-played out. While parts of the protocol had been audited with blockchain auditing firm Chain Audits, the critical Vault contract that lay at the heart of the rug pull had not been. Chain Audits added that only four of BaseBros’ contracts had passed inspection, while the Vault contract went without inspection.
This lacuna in implementation provided the very loophole that was used by the operators of BaseBros to manipulate the system and move the users’ funds off-platform, utilizing a backdoor in the unaudited contract. The fact that it had never been audited seriously questioned the transparency and security practices adopted in the DeFi space.
Confusion with Seamless Protocol: Mislabeled Contracts Cause Chaos
Immediately after the rug pull, initial reports got it wrong, reporting that another DeFi project, Seamless-which operates on Base blockchain-might have been responsible. The mix-up occurred because of the proximity of the name between BaseBros and Seamless. Some investors, during the early stages, had reason to worry that Seamless also somehow fell victim to the breach.
However, blockchain security firm Cyvers, after thorough investigation, confirmed Seamless was not compromised, the incident lay completely with BaseBros, and Seamless’ contracts and users’ funds were intact. The clarification indeed brought some relief, but the broader DeFi community had already suffered damage.
BaseBros Scam Aftermath: Lessons to Come for the DeFi Community
The BaseBros rug pull again accentuated the amount of risk that usually accompanies investment in decentralized finance. With no higher central authority that could regulate or secure a particular platform, investors are very often left to the mercy of malicious operators. A prospect of high returns is usually combined with too little auditing, making many users believe in miracles and unable to see the dangers that might have been hidden in unaudited contracts.
This is not some sort of isolated case; there have been plenty of scams over recent years within the DeFi space, with many following this particular pattern. Rug pulls alone this year accounted for more than $765 million in losses, taking advantage of the lack of regulation and oversight on decentralized platforms.
Despite the risks, many investors, especially the newer ones blinded by greed for a quick profit, continue to flock to DeFi. Security experts are decidedly unimpressed, though. Blockchain security firms like Chain Audits and Cyvers recommend investing only in projects that have been extensively audited by independent teams and should be looked at suspiciously when offering suspiciously high returns with little to no transparency.
A Deeper Dive into Crypto Scams and Rug Pulls
The rug pull by BaseBros is the latest in a long line of cryptocurrency scams that have hit the market. This year, the crypto space has seen a significant increase in hacking and theft, with total funds stolen in the year reaching $1.58 billion mid-year. That marks an 84% increase from the prior year, showing the ongoing issues of security in the industry.
Of those, rug pulls have been proliferating. Many of these scams involve newly minted tokens that live less than one day, as popularly known, “one-day rug pulls.” The tokens are hyped, investors pour in money, and then overnight, they’re gone with nothing.
Decentralized exchanges and newly minted DeFi protocols are still fair game to hackers. According to a report from Chainalysis, in 2024 alone, hacking incidents have increased 2.8%. Using unaudited smart contracts remains one of the most notorious methods by scammers, which has been seen in BaseBros.
How Japan’s Crypto Sector Is Fighting Back
The very reason for cyberattacks has caused one of the most major blows within the past years in Japan, which was quite involved in the market of cryptocurrencies. The breaches in Mt. Gox and Coincheck brought down investor confidence, with much stricter regulations henceforth imposed on the crypto industry within the country.
However, exchanges like bitFlyer continue to be vulnerable to very sophisticated threats such as phishing, social engineering, and AI-generated scams. These, in turn, have fought back with a series of hardening techniques, working with law enforcement and deploying expanded security solutions to protect users’ digital assets.
As such, despite these efforts, the industry remains vulnerable, and the consequences from incidents such as the BaseBros rug pull only work to heighten concerns around the safety of investing in decentralized finance.
