CaramelSwap

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CaramelSwap

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.

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

About CaramelSwap

"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!"

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 - CaramelSwap

Date	Event	Description
June 16th, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

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 is unknown.

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?

General Prevention Policies

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

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.