DeFi platform Kokomo Finance disappears and stirs fear among crypto community
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Decentralised finance (DeFi) platform Kokomo Finance has disappeared from all social networking platforms. This has stirred fear and concern among the crypto community.
Kokomo was a platform that allowed users to borrow crypto without a credit check. It also allowed the trade and borrowing of BTC, ETH, Tether, and USDC. The disappearance is being suspected of a "rug-pull" scam. Investors who linked their funds to the platform could be in trouble if it is an exit scam. A total of $4 million is at risk.
A rug pull scam is in which a project or a cryptocurrency is launched and abandoned after roping in enough capital. The scammers will abscond with the loot. In crypto scams, rug pull is the most common costing over $2.8 billion to the crypto community in 2021 alone.
Blockchain research platform CertiK tweeted about a potential rug pull scam over the weekend after the native KOKO token plunged by 95% overnight. Soon, the Twitter, Discord, and Telegram accounts of the platform disappeared. The deployer of KOKO may have tweaked and reset the reward speed for investors who staked their tokens in the lending protocol. The borrow function also suddenly paused.
According to FX Empire, Kokomo's smart contract audit showed that the owner of the KOKO token had a one-time allowance to mint 45% of the maximum supply to a random address. The open-source and non-custodial lending protocol platform was built on the Optimism Layer-2 blockchain built by Ethereum developers.