- Yearn.finance Founder Andre Cronje has accused social actors of an EMN token hack.
- Defi tokens are not the same as stocks.
- LBI is an experiment project, said Yearn.finance Founder
Yearn.Finance founder Andre Cronje has blamed social actors for creating a story around EMN token that caused rational actors to become involved in Eminence (EMN). The blame comes after a group of investors sued him over the $15 million EMN hack.
Prior to this, hackers targeted a smart contract vulnerability in Eminence, an upcoming gaming project built by Cronje. Over $15 million EMN tokens were stolen in the process and $8 million was deposited back into Cronje’s wallet.
EMN an “Economic Exploit”
In the blog, Cronje elaborated that EMN was an economic exploit, and that the code functioned as designed. The contracts went through normal testing cycles and were at stage 5, and on that day alone, he had deployed ~2 different versions.
Therefore, Cronje suggests he did not mishandle the EMN project’s economic exploit, which he insists to be functioning well. Rather, social actors are to blame for creating a story around EMN that made rational actors react.
Although people treat them like stocks, in Defi, tokens are a coordination mechanism. Possession of tokens should signal that one wants to become a contributor and not a bystander.
Meanwhile, Cronje has found himself at the center of yet another experiment gone wrong: Liquidity Income (LBI). This is Cronje’s latest experiment that was rolled out on October 13 as an “unfinished product meant for research purposes.”
Despite a formal announcement of the project, users proceeded to deposit ETH into this unaudited contract. Unfortunately, users who had entered with large amounts of ETH acquired some losses.
@HsakaTrades tweeted a story of a 1,000 ETH buyer. The user purchased a little over $322,000 of the new LBI tokens and then sold his coins for $20,000.
— Hsaka (@HsakaTrades) October 14, 2020
However, Cronje blamed people that confused price with functionality. The Yearn.finance founder highlighted LBI as the perfect example where people bought it off Uniswap, inflating the price — something that a rational actor that understood how the system worked should never have done.
Despite the project being an experiment and speculations that it won’t be used in the future, Cronje says LBI is working as intended. Moreover, he will use it to create a real-world example of how such templates function.