{UPDATE} This article was updated after the disastrous first harvest which LAVACAKE.finance held. The native token LAVA dropped 99.8% leaving investors in bits and pieces. The devs managed to cash out, although we specifically warned about such potential actions. Read on to see what was LAVACAKE about and how they managed to scam investors.
The world of DeFi is going stronger than ever, with many new projects arising every now and then. The sad part is that many unprofessional projects surface at the same time, painting a bad image for the DeFi world. Be it scam projects or unprofessional teams who don’t know what they are doing, there is definitely a good number of bad projects which crypto users should avoid. LAVACAKE.Finance is one particular project that is planning for its very first “Harvest”. Is Lavacake a good investment? Is this a good yield farm to consider?
What is LAVACAKE.FINANCE?
Lavacake.finance is another Yield Farming platform, that prides itself on being “The next generation yield farm on Binance Smart Chain”. They are also an Automated Market Maker, in the sense that they provide liquidity. Having said that, users can participate in staking liquidity pools in order to earn the LAVA token. What sets LAVA aside is that they claim to have anti-whale measures, a harvest lockup, and a transfer tax.
In case there was an attack on the front-end, the devs put in place an emergency withdrawal system, that allows users to withdraw their tokens by direct integration with the MasterChef contract (https://bscscan.com/address/0xfbfae2D489Bb649C7f33d9812b2Dcf17E9bb279C#writeContract). On the other hand, this would immediately remove all the rewards earned.
Why might LAVACAKE Fail?
In the LAVACAKE contract code on Github, there appears to be an exception for the “Anti-whale” system, which the company prides itself on. As explained previously, the anti-whale forbids any user to dump more than 0.01% of the token total supply. On the other hand, there is an exception for certain wallet addresses from the “Anti-whale” restriction. So the company gave an exclusion for certain wallets to be able to dump more than “normal people”. This means that the Anti-whale system is useless, and only in the hands of the owners themselves!
This clearly appears in the commit code line 1150 and 1151 in figure 1 below.
How did the Company handle this Concern?
Lavacake.finance has a Telegram group with well over 38K members. When asked about the above exception to the Anti-Whale system, no one was able to answer the question for several hours. People also started to feel the heat when no one was even replying to the question, or some users (whose username is long so they get mistaken for admins) answer in a very broad answer, failing to address the issue. If the event of dumping on harvest day DOES happen, the price of LAVA can fall from the current price of $10K all the way to $50 or even less, as seen in other projects.
Is LAVACAKE a Good Investment?
After addressing the issue on the Telegram group, the person got blocked by the admins, until the CMO unblocked him and answered his question. They basically claimed that the excluded wallets are devs wallet, masterchef wallet, and fees wallet. We at CryptoTicker have been monitoring the project closely and found many red flags, and we had to share them with the community. This would definitely raise more awareness, so that the events of Iron.Finance don’t happen again. The wallet addresses to be watched are the following addresses that devs claim are the exception to the Anti-Whale system:
- Dev address: 0xAc395eD94ddf317c8Bb9Ca966B1eb3ee98AF87eB
- MasterChef address: 0xfbfae2D489Bb649C7f33d9812b2Dcf17E9bb279C
- Fees address: 0x77931e5E5F89f9164D9100329A9b2656b0ACD63B
For us over at CryptoTicker, we will monitor if the first harvest day goes smoothly as planned. Our Chairman did in fact buy in and has already a whooping USD 1.2 Million worth of LAVA harvested. We will be able to see if this project withstands good investors or bleak into rug-pulling.
{UPDATE} During the first Harvest, the Token COLLAPSED!
Looking at how the countdown on the homepage kept refreshing, you can directly sense something wrong. In fact, after the first Harvest, the Token which was priced around USD 12k fell all the way to USD 0.4! All the devs cashed out leaving investors to dust.
Conclusion
Definitely watch out from this project. Heavy dumping occurred on their harvesting day. We at CryptoTicker warned about such a malicious move and advised our community to stay away from such a bad project.
LAVA old Stats pre-dumping:
– Total LAVA Supply: 227,299
– Total LAVA Burned: 717
– Market Cap: USD 2.4 Billion
– Total Value Locked: USD 17.1 Million
– Max transaction amount: 22.80 LAVA
– Transfer tax: 7.5%
LAVA current Stats post-dumping
– Total LAVA Supply: 222, 738
– Total LAVA Burned: 14,506
– Current Market Cap: USD 3.2 Million (-99.8%)
– Total Value Locked: USD 3.8 Million
– Max transaction amount: 23.73 LAVA (JOKE)
– Transfer tax: 7.5%
Stay Ahead, Stay Updated
Rudy Fares
