DeFi Exit Scams Surge in May: Uniswap DAO Rejects Fee Proposal & Jimbos Protocol’s Bounty Offer

DeFi exit scams scene, tension-filled atmosphere, dusk lighting, Uniswap DAO members in conference room, rejected fee proposal on table, Jimbos Protocol bounty poster displayed, coins representing lost funds, top 100 DeFi tokens ascending, subtle cyberpunk aesthetic, mood of financial uncertainty and recovery.

May was a month filled with exit scams in the decentralized finance (DeFi) world, with over $45 million lost to these incidents, while exploits on DeFi protocols racked up less than half that amount over the same period.

Uniswap DAO rejected a plan to charge liquidity provider fees as Uniswap token holders, citing tax concerns. The proposal would have allowed Uniswap’s governing body to receive a percentage of the fees currently going to liquidity providers.

Jimbos Protocol has offered an $800,000 bounty to the public as talks with the hacker failed. The protocol’s team extended the bounty offer to the public, inviting anyone who could help catch the exploiter or recover the funds to claim the reward. The Fantom network has started paying developers to generate gas fees, and another popular DeFi protocol, PancakeSwap, has entered the GameFi space.

The top 100 DeFi tokens had a bullish last week of May, with most of the tokens recovering from two weeks of bearish pressure. The total value locked in DeFi protocols also rose above $50 billion again.

A June 1 report from Beosin revealed that total losses from rug pulls and scams reached over $45 million across six incidents in May. Meanwhile, 10 attacks on DeFi protocols netted just $19.7 million. The amount is an almost 80% decrease from April, with losses from these types of exploits declining for two months.

On June 1, a proposal to enable protocol fees for the Uniswap decentralized exchange (DEX) failed, potentially allowing liquidity providers to continue to earn all revenue from swaps, according to the proposal’s official webpage. It narrowly failed, with 45.32% of votes going to the “no fee” camp and 42.34% voting to charge liquidity providers one-fifth of the fees they receive from users. Another 12.3% voted to enact a fee charge of one-tenth, with 0.04% voting to charge one-sixth.

DeFi platform Jimbos Protocol offered 10% of the exploited funds to the general public after giving the hacker several days to respond to a deal. On May 28, the Arbitrum-based DeFi app was exploited, resulting in a loss of 4,000 Ether (ETH). After taking advantage of the lack of slippage control on liquidity conversions, the exploiter was able to swipe assets worth around $7.5 million at the time.

A new program from the Fantom Opera network team will pay developers for the gas fees they generate from users, according to a May 31 announcement. Specifically, the “Gas Monetization Program” will pay eligible developers 15% of the total gas fees their apps generate. Six Web3 apps have already been approved for the program, including ParaSwap, Beethoven X, Stargate, LayerZero, WOOFi, and SpookySwap.

Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most tokens trading in the green. The total value locked in DeFi protocols rose above the $50 billion mark.

Source: Cointelegraph

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