DeFi whales exploit the protocol when it is launched

Saddle Finance: DeFi whales exploit the protocol when it is launched

  • The whales made huge profits by arbitrating on Saddle Finance.
  • The Saddle protocol is a clone of Curve Finance.
  • The first liquidity providers will probably have lost their funds.

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Within a day of its launch, the latest decentralised finance protocol, Saddle Finance, has already been exploited by whales arbitrating to make the most profit.

The DeFi Saddle Finance protocol was launched on 20 January, with the aim of mitigating the problematic spread between Crypto Genius stable coins and wrapped or tokenised cryptographic assets. Within hours of its launch, however, whales had taken advantage of the new protocol by arbitrating for huge profits.

The blog Rekt broke the chronology of events in its critical analysis, which began with the following statement:

„Any investor who supported Saddle Finance values profit over progress. Why finance a fork without innovation? »

Six-figure profits

As BeInCrypto reported on 20 January, Saddle Finance, a fork of Curve Finance, uses the Synthetix DeFi protocol via a system of „virtual synthesizers“. This system is designed to allow large transactions with minimal slippage between the assets it supports. These currently exist in the form of stablecoins and wrapped Bitcoin (wBTC) versions.

Clearly, the virgin platform was ripe for picking and Saddle Finance had already acknowledged that „some of the first transactions were executed with high slippage“ within minutes of its launch.

According to the blog Rekt, users who deposited in Saddle Finance within an hour of its launch will never get as much money out as they put in.