Kannagi Finance on zkSync Rug Pulls Users, Steals $2.13 Million

Kannagi Finance, a liquidity aggregator on the zkSync Era platform, has reportedly executed a rug pull, absconding with $2.13 million in total value locked (TVL).

Kannagi Finance on zkSync Rug Pulls Users, Steals $2.13 Million

According to Wu Blockchain, Kannagi Finance has deleted its website and social media accounts, making off with all user funds.

The value of the KANA token on the SyncSwap DEX has plummeted to zero.

Impact on zkSync Era:

zkSync Era, one of the most anticipated Layer-2 platforms, has been attracting significant liquidity as users flock to test new products in hopes of future airdrops. The zkSync team has previously stated that an airdrop is expected in early 2024.

However, the platform has also become a target for scams and security breaches. The most recent notable incident before this rug pull was the Era Lend exploit, resulting in a loss of $3.4 million.

As per DefiLlama, zkSync Era's TVL is approximately $164 million, having peaked at nearly $200 million in mid-July. The majority of liquidity is concentrated in DeFi projects such as SyncSwap, Mute.io, iZiSwap, and Maverick Protocol.

To put this into perspective, zkSync Era ranks as the third largest Layer-2 Ethereum platform by TVL, trailing only Arbitrum and Optimism.

The Aftermath:

The rug pull by Kannagi Finance serves as a stark reminder of the risks involved in DeFi and the importance of due diligence. Users are advised to be cautious and keep abreast of the latest security measures and updates from the platforms they use.