zkSync-Powered Merlin DEX Loses $1M in Public Token Sale Despite ‘Audit’: Investigating the Security Breach

Theft of $1.1 Million Worth of Cryptocurrency at Merlin’s Public Sale of MAGE Tokens

A new decentralized exchange, Merlin, was reportedly exploited for over $1.1 million during a public sale of its mage (MAGE) tokens. Exploiters were able to drain $850,000 worth of USD Coin (USDC) from Merlin, along with some other relatively illiquid tokens. The attackers seemed to have control of the liquidity pool and were able to easily drain the funds, indicating that it was not a complex or sophisticated exploit. The theft occurred during the three-day public sale of MAGE tokens, where Merlin was offering attractive yields without a hard cap. Developers had announced that $MAGE would begin trading at $45 with an $850,000 market value, and the total amount raised would determine the final price of tokens for all users.

The attack happened despite Merlin undergoing an audit conducted by blockchain security firm CertiK. The audit concluded that there were “No Critical Findings,” as per CertiK’s website data. As of Wednesday’s Asian morning hours, Merlin’s developers have not issued any statement regarding the funds drain.

Crypto Twitter Hype Over Attractive Yield Offered on Deposits

A project offering attractive yields on deposits generated hype among Crypto Twitter users. The project was not named in the news report, but it is likely to be a DeFi protocol. Yield farming, a popular DeFi trend, involves providing liquidity to the protocol’s smart contract in exchange for rewards in the form of tokens. This enables investors to earn passive income on their holdings.