The ecological project party ran away before the airdrop, and zkSync became a rug chain?

The long-awaited star project Ethereum L2 ZKsync is finally going to issue tokens. Today, the community is full of users sharing the amount of ZKsync airdrop tokens. As of the time of writing, the pre-market trading market ZK on Whales is temporarily reported at $0.9. It is reported that the airdrop share of early users is 3.675 billion ZK tokens, accounting for 17.5% of the total.

In order to obtain airdrops, users have to interact diligently with the ZKsync ecological project. However, just a few days before the coin issuance, a project owner took advantage of the main network upgrade to abscond with the funds, adding another rug army to ZKsync.

User fundraising was locked, and the project owner untied and ran away

This time, the rugged project is GemSwap, a decentralized trading platform on ZKsync, and the team behind it is called Gemholic.

Last year, Gemholic raised 921 ETH on ZKsync. However, due to the technical differences between ZKsyncs Era network and the Ethereum mainnet at the time, Gemholics fundraising method when it was launched on ZKsync was to directly copy the Ethereum contract code. Due to the lack of sufficient testing of the ZKsync architecture differences, the transfer() function in the Gemholic contract generated fees exceeding the gas limit on ZKsync, resulting in passive lock-up of the raised funds.

Eden Au, director of research at The Block, noticed the issue and tweeted, “A project on ZKsync raised 921 ETH ($1.7 million) in a token sale, but the funds are forever trapped in a smart contract. The Transfer() function works on Ethereum and other EVM chains, but not on ZKsync.”

At that time, ZKsync officials quickly responded to this dynamic. And later proposed a solution, In this case, we found an elegant solution that can solve a wider range of problems related to gas fees. It will require minimal changes to the gas non-metering of the protocol, but allow full recovery of funds.

Gemholic was also quick to make a commitment, writing on its official Twitter account, “We understand that many people have lost confidence, but we still believe that the ZKsync team can get things done. We need everyone to trust us. Once the agreement is finalized, we will launch marketing activities and project pre-release. We will also refund excess payments.”

However, the tweet is now only available in the web archive. After being able to withdraw funds from the ZKsync mainnet, Gemholic deactivated his Twitter account.

More than a year later, the value of the 921 ETH raised by Gemholic has tripled to more than three million US dollars. On June 7, ZKsync started the mainnet upgrade. In the v24 version, ZKsync added a function that allows the transfer() function to be called normally when gas is not specified to improve compatibility with Ethereum.

This adjustment brought opportunities to the Gemholic project. Users who participated in Gemholics fundraising thought they had waited for the day of repayment, but unexpectedly witnessed another runaway project on ZKsync.

The community discovered that Gemholic withdrew 921 ETH from the project contract the day after the V2 upgrade and bridged to the Ethereum mainnet. Subsequently, screenshots circulated in the community showed that Solomon, the founder of Gemholic, deleted all TG group messages, and the Gemholic official Twitter account was also deleted. It is obvious that the project party ran away with the money after unwinding.

ZKsync already has a “Rug chain” tag?

The incident aroused the anger of the community. NSerec, the founder of zkMarkets, directly tweeted, Today, $3.5 million was stolen by Gemholic. The company has been falsely promising to refund investors for a whole year, but committed fraud after the funds were finally unlocked.

In fact, there are more rugged projects on ZKsync than just Gemholic. The community even calls ZKsync a rug chain.

On April 13, 2023, a suspected Rug Pull occurred in the ZKsync ecological project SyncDex Finance. According to the relevant page information, users have pledged a total of more than 100 ETH and 98,444.8 USDC in the project. Its official social platform and Discord channel have been closed after the doubts spread.

Less than a month later, a meme project called SHIBERA on ZKsync was accused of a Rug Pull. The project’s official Twitter account was deactivated, and the liquidity pool on SyncSwap was also withdrawn. Before the Rug, SHIBERA had announced that it would conduct an airdrop.

The rugged incident that left a deep impression on the community came from Kannagi Finance, a well-known DeFi project on the ZKsync Era. In July last year, the projects TVL plummeted from US$2.13 million to only US$24 overnight, and its official Twitter account was soon cancelled.

Just two weeks ago, the ZKsync ecosystem lending platform xBank Finance was also suspected of a Rug Pull. It is reported that the TVL (total locked value) of the protocol has been close to zero, and its official Twitter account has been frozen, unable to obtain the latest progress. Previously, xBank Finance has been one of the more active DeFi projects in the ZKsync ecosystem.

At present, the ZKsync team has not made a clear statement on the user fund recovery plan. In this GemSwap incident, it may be quite difficult for users who suffered losses to recover the transferred funds. In the previous project rugs, ZKsync has not taken any effective actions.

The ZKsync airdrop was seen as a “big deal” by the community, but these rugged projects also serve as a constant reminder to users in the crypto community that there are not only “treasures” in the exploration of the on-chain world, but also dark risks that exist at any time.

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