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Beware of Rug Pulls: An Overview of the Kokomo Finance (KOKO) on Optimism Incident

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On March 27, it was reported that according to the monitoring of Beosin EagleEye security risk monitoring, early warning and blocking platform under the blockchain security audit c

Beware of Rug Pulls: An Overview of the Kokomo Finance (KOKO) on Optimism Incident

On March 27, it was reported that according to the monitoring of Beosin EagleEye security risk monitoring, early warning and blocking platform under the blockchain security audit company Beosin, Kokomo Finance (KOKO) on Optimism had a rug pull. The deployer of Kokomo Finance (KOKO) first deployed a contract cBTC (0x1e02e6a5b549eead726ebcce64a54215196760e2), and then called_ SetRewardSpeed and suspend borrowing. Next, the attacker changed the contract implementation of the cBTC to a malicious contract (0x05b2957591a4d1334b230f8c56fd62ddee17b52e), calling the 0x804edaad method of the cBTC contract to transfer 7010 soWBTCs from to 0x5c8db6eea11896065ec7dcfc67f458c54ccf7bff. The attacker eventually replaced 7010 soWBTCs with 141 WBTCs. Eventually, the attacker replaced 7010 soWBTCs with 141 WBTCs.

The loan agreement on Optimism Kokomo Finance has a Rug pull

**Introduction**
Cryptocurrency is a relatively new technology that is gaining popularity among investors worldwide. With the emergence of decentralized finance (DeFi), investors can participate in a wide range of financial services without intermediaries. However, the emergence of DeFi has led to the emergence of various security challenges, including rug pulls. Rug pulls are a form of DeFi scam where the developer or the project team absconds with investors’ funds.
On March 27, Beosin EagleEye security risk monitoring identified a rug pull at Kokomo Finance (KOKO) on Optimism. The deployer of Kokomo Finance (KOKO) first deployed a contract cBTC and then called SetRewardSpeed and suspend borrowing. The attacker later changed the contract implementation of the cBTC to the malicious contract and transferred 7010 soWBTCs to 0x5c8db6eea11896065ec7dcfc67f458c54ccf7bff. Eventually, the attacker replaced 7010 soWBTCs with 141 WBTCs.
In this article, we will discuss how the Kokomo Finance (KOKO) on Optimism rug pull occurred and what investors can do to protect themselves against rug pulls.
# How the Kokomo Finance (KOKO) on Optimism Rug Pull Occurred
The Kokomo Finance (KOKO) on Optimism rug pull was a complex DeFi scam that affected many investors. The scam began when the deployer of Kokomo Finance (KOKO) deployed a contract called cBTC. This contract was supposed to allow borrowers and lenders to interact with each other to provide and receive loans. After deploying the contract, the deployer called SetRewardSpeed and suspend borrowing. This action suspended borrowing on the platform, and investors could no longer deposit funds.
Next, the attackers changed the contract implementation of the cBTC to a malicious contract. This malicious contract transferred 7010 soWBTCs to 0x5c8db6eea11896065ec7dcfc67f458c54ccf7bff. The attackers eventually replaced 7010 soWBTCs with 141 WBTCs. This action led to the loss of investors’ funds.
# Protecting Yourself Against Rug Pulls
The emergence of DeFi has led to the emergence of various security challenges, including rug pulls. Investors must take extra precautions when investing in DeFi projects to avoid rug pulls. Here are some tips for protecting yourself against rug pulls:

Conduct thorough research before investing

Before investing in any DeFi project, you should research the project thoroughly. You must understand the risks involved and evaluate the credibility of the project team. Check if the project team has a track record of producing genuine returns for their investors.

Invest only what you can afford to lose

Investing in cryptocurrencies can be risky. As such, it is advisable to invest only what you can afford to lose. You should not invest your life savings in cryptocurrencies or any other risky financial products.

Use reputable exchanges

Investors should use reputable exchanges when buying and selling cryptocurrencies. You should opt for exchanges that have a good track record of security and transparency. It is also advisable to use decentralized exchanges as they are less susceptible to hacks.

Check smart contract code

Investors should check the smart contract code before investing in any DeFi project. This action will help you identify any potential loopholes that attackers can use to steal your funds. You can use tools like Etherscan to verify the contract code.

Diversify Your Investments

Diversification is vital when investing in cryptocurrencies. You should not put all your eggs in one basket. Instead, spread your investments across different cryptocurrencies and DeFi projects.
# Conclusion
The Kokomo Finance (KOKO) on Optimism rug pull is a sobering reminder of the risks associated with investing in DeFi projects. Investors must conduct thorough research before investing in any DeFi project. They must also invest only what they can afford to lose and use reputable exchanges when buying and selling cryptocurrencies. Checking smart contract code and diversifying investments are other ways to protect yourself against rug pulls.
# FAQs
Q1. What is DeFi?
Ans. DeFi stands for decentralized finance. It is a financial system that operates without intermediaries, such as banks or brokers.
Q2. What is a rug pull?
Ans. A rug pull is a form of DeFi scam where the developer or the project team absconds with investors’ funds.
Q3. What should I do if I fall victim to a rug pull?
Ans. If you fall victim to a rug pull, you should report the matter to the relevant authorities and seek legal redress.

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