JUNE 2021




"Caramel Swap is breaking through the yield farm platforms on Binance Smart Chain by offering real usage for NFT on Yield Farming." "Our Candy Shop-shaped cards will have great attributes, that can give tremendous advantages for their holders." "A marketplace and a gamification system for them will soon be implemented. With all of it, our investors will have the opportunity to be pioneers in the revolution on the DeFi market."


"With a large roadmap and plans to increase the scalability of DeFi by reducing the availability of constant rugpulls through a decentralized exchange made of ethics to benefit developers and investors."


"Our project was created with the purpose of distinguishing itself by maintaining a close relationship with investors, giving constant attention to the community and seeking to offer what was most important to it."


"When users put their tokens into liquidity pools and stake their LP tokens in a farm, they put their crypto tokens in a bank. But this time the bank is a protocol created by someone anonymous. Especially users that move between the high-APY yield farms are at risk."


On "June 16th, multiple farms their native tokens were exploited all the way to $0.00. KetchupSwap, Lokum, YBear, Piggy, CaramelSwap. Sadly enough GoCerberus and Garuda were exploited as well." "A major exploit has affected multiple BSC farms by driving their native token prices to 0." "Cerberus, Garuda, KetchupSwap, Piggy, CaramelSwap, and a few more projects got exploited at the same time, because of mishandling of tokens with transfer tax."


"Most of the yield farms use a trusted contract called a MasterChef, which is used even by PancakeSwap themselves to distribute rewards. The problem is that the MasterChef was never designed for all these special tokens, it was designed specifically to receive rewards for LP tokens."


"But, yield farms kept popping up and adding non-LP tokens and everything was fine. Until recently tokens with a transfer fee became more popular. Most of our tokens have a transfer fee as well, it’s how we can have our tokenomics. But the problem is that the MasterChef was not designed for this."


"Due to the design of the masterchef if you stake 100 tokens (with a 5% transaction fee) in a MasterChef, you are still able to withdraw 100 tokens from the MasterChef. But due to the transfer fee, only 95 tokens actually arrived in the contract."


"Due to the inner workings of the Masterchef, once user balances grow larger then the total token balance in the pool, they effectively get a multiplier on their rewards. Anyone that was still in the Garuda pool was getting way larger harvests then they should."


"In the masterchef, the rewards per staked token are actually calculated by dividing the pool emissions by the total tokens in the contract." "[I]f there is 1 token remaining in the masterchef, the rewards per token are equal to the total emissions of that pool. So what happens in our previous case when there may only be 0.001 token in the pool and users still have a balance of thousands of tokens? Their harvests are thousands of times larger then what they should be."


"After discussing with our engineers, we thought about a method to ‘whitehat’ these funds and had actually started developing and deploying the contracts for this (essentially they would use the referral method above to mint a large amount of tokens). Although we believed we would have been able to secure these funds given a bit more time, we were not able to deploy and execute the whitehat contract our devs developed within time and at some point we were informed that it was ‘too late’. A very stressful call where everyone on the team was doing everything they could became silent. We did what we could. Sadly enough so many other projects today were vulnerable to the same exploit. It is a novel exploit and nobody was ready for it. We did our absolute best to salvage the remaining funds."


"The exact value that hackers stole is still unclear. However, hackers may have gotten away with an amount equal to the market cap of these projects."


"For a long time, we have been dedicated to meeting the wishes and expectations of our users, following the guidelines and time of the community. But unfortunately, we were not successful in following this strategy. We made mistakes, especially when trying to advance too many resources that needed more time."


"Unfortunately, we ended up losing our original development path, which over time was fatal to the health of the project. We've been working without any kind of profit for months, ALL CARAMEL TEAM, and we can't continue this way."


"The fees have not been enough to pay the team, much less to do the marketing we would need to overcome this phase."


"Unfortunately, we have reached an untenable point, with a lot of FUD, complaining and impatience. In the same way that we made afair release, without anticipation, let's finish the project in a fairway."


"As sad as it is, wa are asking for all assets to be removed from the Caramel Swap platform. It will not be shut down so that everyone has the necessary time (do this as soon as possible)."


"We are very grateful to everyone for the journey we lived together and for the countless good times. We would also like to apologize from the bottom of our hearts to all the good investors who are here, those who have always supported the team and who have given us strength."


"Thank you very much and we wish you all the best!"

CaramelSwap was made based on the PantherSwap smart contract. All funds were stored in a smart contract hot wallet. This contract had an error in the way deflationary tokens were handled, which caused extra rewards to be released.


All investors lost their funds as the hacker cashed out and the price of the token plummeted to zero. The CaramelSwap project attempted a relaunch with a partial compensation for all affected users in a new token. The project was run for a few months and later abandoned. At the moment, the site, Reddit, and Telegram remain. However, Twitter and Reddit accounts have been deleted. Investors undoubtedly face large losses which they will not recover.


Hot wallets should either not store customer funds, or be insured fully.


Check Our Framework For Safe Secure Exchange Platforms

Sources And Further Reading

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