Within the Scroll ecosystem, a stablecoin project has sparked suspicions of a potential rug pull after its value dropped an alarming 98% in one night. The project in question, Essence Finance, saw its stablecoin CHI collapse from a value backed by over $20 million in collateral to just $0.077 in the past 24 hours. This drastic drop, combined with the project’s last communication on September 11, has heightened fears among investors.
Essence Finance Under Scrutiny Amidst Possible Rug Pull
Essence Finance’s sharp decline has rattled the Scroll ecosystem and DeFi communities, particularly as concerns mount over $20 million in collateral that appears to have been siphoned away. Essence Finance had previously released an audit report linked to the FEI Protocol V2, which is now facing increased scrutiny. This event has not only shaken investors but also raised new questions about security within Layer-2 networks like Scroll as DeFi projects continue their rapid expansion.
In the same week, Scroll—an Ethereum Layer-2 network—launched its anticipated SCR token through an airdrop, receiving mixed reactions from participants. According to a Scroll blog post, the network allocated 5.5% of the total SCR supply, or 55 million of the 1 billion tokens, to early contributors and users.
Distribution included 40 million SCR tokens for those who accumulated 200 or more points, known as Scroll Marks, through network interactions. Additionally, 1% was equally divided among eligible wallets, and 0.5% was reserved as a bonus for select participants who met specific criteria.
With Essence Finance’s recent crash and Scroll’s airdrop rollout, this week underscores both the high potential and risks within expanding Layer-2 DeFi ecosystems. For investors, Essence Finance’s collapse serves as a reminder of the security challenges in decentralized finance. Stay tuned with Turkish NY Radio for more updates on this unfolding story.
