What Happened: The creators of Shiba Inu (CRYPTO: SHIB) have launched a new DeFi platform called ShibaSwap that will act as a decentralized exchange (DEX) and facilitate token swaps.
1 Billion dollars #TVL (Total Value Locked) in a single day!
— Shib (@Shibtoken) July 7, 2021
The ShibaSwap DEX has amassed over $1.54 billion of Total Value Locked (TVL) in a little over 24-hours since its launch, but some DeFi experts have raised concerns over the safety of the project.
DeFi Safety, an initiative that reviews the processes and transparency of various crypto projects, gave ShibaSwap a score of just 3% in its review, saying in a tweet that the protocol was a prime example of “what absolute negligence looks like.”
ShibaSwap is up with a devastating 3% score. If you are looking for a prime example of what absolute negligence looks like in a protocol, look no further than this. Zero Transparency. You are putting your money in a black hole. https://t.co/dUzU0vvCHW @ChrisBlec @ShibArmy #DeFi pic.twitter.com/QG3ykYakdt
— DeFi Safety (@DefiSafety) July 7, 2021
DeFi analyst Chris Blec also took to Twitter to highlight that all the funds locked in ShibaSwap could be drained by one Ethereum (CRYPTO: ETH) account.
� Yesterday, it was noticed that all funds in ShibaSwap could be drained by 1 Ethereum account.
ShibaSwap then switched ownership to a new Gnosis multisig with unknown signers & fresh addresses.
The problem: it’s possible to create a multisig and own all the keys yourself. pic.twitter.com/wSN1yOB2Qn
— Chris Blec (@ChrisBlec) July 7, 2021
“Hundreds of millions of dollars in tokens could disappear at any moment in the current state should the developer choose,” said developer Joseph Schiarizzi in a medium article explaining how ShibaSwap developers could steal all funds.
Price Action: SHIB is down nearly 80% from its all-time high of $0.0000388, last seen on May 11.
The price of the token surged by 14% immediately after the launch of ShibaSwap on July 6 but has since fallen in value considerably.
SHIB was trading at $0.00000792 at press time, down 8.16% over the past 24-hours.