Hope Finance Loses All Hope

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Hope Finance Twitter

Hope Finance is an ecosystem built on the Arbitrum network and its token $HOPE is dynamically adjusted relative to the price of $ETH, instead of being pegged to a stable coin. The team aimed to make $ETH the main medium of exchange on the Arbitrum network by providing a mirrored, liquid asset to $ETH. The project underwent two audits prior to launch and completed KYC by Audit Rate Tech. However, during the Genesis launch, funds were drained from the GenesisRewardPool contract, and it appears to have been a scam orchestrated by the project's team. The team approved the transaction preparing the rug, and faked KYC is not hard to come by. Therefore, the situation seems hopeless, and users should not get their hopes up.

This is a global/international case not involving a specific country.

About Hope Finance

"The $HOPE algorithmic token serves as the backbone of a rapidly growing ecosystem aimed at bringing liquidity and new use cases to the Arbitrum network.

The protocol's underlying mechanism dynamically adjusts $HOPE's supply, pushing its price up or down relative to the price of $ETH."

"Unlike previous algorithmic tokens, $HOPE is not pegged to a stable coin— it is instead pegged to $ETH. Hope Finance believes in the potential of the Arbitrum network, and has chosen to align its mission to both provide value to and derive value from $ETH's future growth. In addition to existing and future use cases such as ETH Pad, $HOPE aims to make ETH the main medium of exchange on the Arbitrum network: this will be achieved by providing a mirrored, liquid asset to $ETH.

One of the primary shortcomings of past algorithmic tokens has been a lack of use cases, leaving no good reason for somebody to want to use or hold them. In order to successfully maintain the peg in the long-run, the Hope Finance team will maintain a focus on innovation around enhanced functionality and use cases."

"We are presented on #Apeoclock! Hype hype hype!"

"Attention all Genesis investors! Ownership has been renounced, making it safe to deposit and refer friends to earn referral profit. Don't miss out on this opportunity!"

"Exciting news for crypto traders! Genesis starts in just 30 minutes, and we're thrilled to announce that leverage trading will be available during the genesis. Get ready to maximize your gains with $wETH and $HOPE trading on our platform!" #trading #DeFi #genesislaunch #yield"

"The project had two audits prior to launch, by Cognitos (the code passed despite auditors flagging two ‘major’ issues, neither of which related to the mechanism used to rug) and AuditRateTech (who appear to have deleted the audit report, although a KYC certificate still remains on their site)."

"HOPE FINANCE HAS SUCCESSFULLY COMPLETED KYC BY AUDIT RATE TECH."

"Funds were drained (~$800k in WETH and ~$1M in USDC) from GenesisRewardPool contract at launch."

"In preparation for the @hope_fin exit scam, a fake router was deployed in txn 0xf188.

The SwapHelper was then updated to use this fake router in txn 0xc9ee. This txn was approved by all 3 owners of Hope’s multisig 0x8ebd.

In txn 0x1b47, _swapExactTokenForTokens variable was set to wallet address, 0x957D.

When GenesisRewardPool.openTrade() is called to borrow USDC, GenesisRewardPool transfers WETH to TradingHelper to convert to USDC.

Instead of swapping, USDC was sent to 0x957D.

As the _uSDC address was deliberately left empty, the receiving address (0x957D) was passed to v2 and the swapExactTokensForTokens() transferred 477 WETH to 0x957D."

"SCAMMER!!!! HE SCAMMED COMMUNITY FOR 2 MLN DOLLARS"

"While the official story may be of a dev gone rogue, the tx preparing the rug was approved by all three accounts on the team’s multisig. And faked KYC is not hard to come by."

"For users, the situation seems…

Hopeless."

"It’s possible that this case will end in whoever is responsible being brought to justice…

But don’t get your Hopes up."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Hope Finance Loses All Hope

Date	Event	Description
February 19th, 2023 11:41:37 PM MST	Smart Contract Deployed	The original smart contract was deployed.
February 20th, 2023 10:31:47 AM MST	Exploit Transaction	The exploit transaction on the blockchain.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $1,860,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.