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Gigantic scam? That's how massively Solana's ecosystem was inflated

 


A huge network of DeFi protocols under false identities and billions of double-counted US dollars: The ecosystem of the Solana blockchain is said to have been artificially inflated. This is reported by the news medium Coindesk .


At the center of the scandal are two brothers, the Macalinaos. They are said to have built eleven interlocking protocols on Solana - under false identities. Among them two of the most popular: Saber and Sunny.


Logs brought great growth to Solana

During the all-time high, these two DeFi protocols accounted for 7.5 of the $10.5 billion Total Value Locked (TVL) from Solana’s DeFi system. Plenty of money is said to have been "double counted" between the two protocols. The real value was thus artificially inflated. According to Coindesk, both projects have now lost 97 percent of their TVLs.


"I came up with a plan to maximize Solana's TVL: I would build logs that are stacked on top of each other so that a dollar can be counted multiple times," writes one of the two brothers in a blog post obtained by Coindesk. This was never released, but two inside sources confirm its authenticity.


Saber was a stablecoin exchange. Sunny was a so-called yield farm. You could earn up to 30 percent interest there by storing tokens if you used the brothers’ complicated DeFi network.


They praised their own projects

The Macalinaos created their eleven protocols under pseudonyms. They pretended that these were developed by "friends" or "friends of friends". "If an ecosystem is only developed by a few people, it doesn't look as authentic," explains one of the brothers in his blog post. "I wanted it to appear like a lot of people were building on our protocol instead of shipping 20+ disjointed programs as one person."


With the different identities, they mutually praised the protocols they invented themselves on social media. They promoted the launch, shared thinkfluencer tweets of their own, and praised each other for inspiring us to build on Solana.


Solana in trouble for months

The Macalinaos announced that they would build on the Layer 1 blockchain Move in the future. This is managed by Aptos Labs, former meta developers. The Group's Diem project , which was canceled in 2021, serves as the basis . Aptos Labs is valued at $1 billion and raised $200 million in a funding round, including by Andreesen Horrowitz, Coinbase Ventures and FTX.


Solana has been struggling with difficulties for months. The network has crashed several times this year . Critics see the reason for this as a design flaw . The company behind the blockchain is also  facing a class action lawsuit . The accusation: illegal sale of securities.


At the same time, the blockchain still has prominent support: FTX founder Sam Bankman-Fried considers Solana to be one of the most undervalued projects. However, he himself owns an unknown amount of SOL tokens.

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