Members of the decentralized finance (defi) community are upset with Yearn Finance founder Andre Cronje over the mishap with Cronje’s secret Eminence (EMN) project. The Eminence protocol gathered $15 million before the project was ultimately hacked before the official launch.

According to a recent blog post published on Medium, a group of defi community members plan to sue Yearn Finance founder, Andre Cronje, and fork YFI as well. As news.Bitcoin.com recently reported, there’s been a lack of trust in Cronje’s work since an undercover project that didn’t even launch was drained for $15 million in funds.

The project was called Eminence (EMN) and after the incident, Cronje said he was lying low from social media.

“We are crowdfunding capital to finance a lawsuit against Andre Cronje, Kirby and Banteg over the EMN scandal on behalf of the victims,” explains the blog post written by the group dubbed ‘EMN Investigation.’ The team added:

Andre Cronje, the founder of Yearn Finance, hyped a surprise launch. Eminence Finance contracts were deployed by the Yearn Finance deployer, and Andre tweeted and retweeted as liquidity flowed in.

The investigation team says that Kirby, the head of communications at Yearn Finance, gave instructions on how to leverage the contracts and promoted Eminence prior to launch.

The group also accuses the Yearn Finance developer, Banteg, of “selling tokens bought from the contract to Uniswap right until the contracts were hacked.”

“The hacker drained the entire $15 million that had been locked up in liquidity by using a flash loan exploit,” the EMN investigation team detailed. “The hacker then returned $8 million to Andre, and was misappropriated.” The seething blog post is also filled with screenshots, tweets, and market charts that aim to bolster the group’s argument.

The investigation group is asking for ETH donations to

In the past 72 hours, Yearnfinance (YFI) surged by 58% after dropping to as low as $12,260 at a few exchanges. 

Three factors that may have catalyzed the sharp rebound are: YFI had become deeply oversold, lead developer Andre Cronje’s deep commitment to the project and the ever expanding use cases for YFI within a large ecosystem.

YFI was deeply oversold

Over the past month DeFi tokens endured a brutal correction which saw the value of many DeFi tokens drop by 40%-70%. The sell-off appears to be primarily led by corrections in Bitcoin (BTC) and Ether (ETH) but now that BTC has turned $11K to support, traders are watching to see if YFI and other tokens will continue to rise higher.

YFI/USDT daily chart. Source: TradingView.com

As Cointelegraph reported, the strong fundamentals of the top DeFi projects was a hint that the market was oversold.

At the time data showed that revenues of most DeFi protocols were actually increasing while token prices fell sharply, indicating that they are likely below fair value.

Revenue change versus token price change of major DeFi networks. Source: Twitter.com

Yearn.finance, as an example, has been on the cusp of releasing the second version of its vaults.

Typically, major product launches and updates would cause the underlying token to rise but the overall weakness in the DeFi market caused YFI price to drop lower throughout September and October.

The total value locked across Yearn.finance products is also hovering above $900 million. This indicates that almost $1 billion worth of capital has been deployed across the Yearn.finance platform.

Total value locked in Yearn.finance. Source: Stats.finance

Andre Cronje assures the community he is not leaving

In the past week there have been rumors that lead developer, Andre Cronje, is leaving the Yearn.finance project after hackers managed to siphon

The Ethereum based decentralized finance (DeFi) protocol Hippo Finance launches the first community governed hedge fund for anyone interested in investing in crypto farming tokens safely.

  • Team Hippo aims to set a new industry standard for DeFi farming protocols, as a result, all the code will be audited by two independent security firms before launch.
  • Hippo Finance is powered by a three token ecosystem, designed to provide farming operations that are sustainable and incentivizes holding HIPPO tokens long term.
  • Users decide how the decentralized hedge fund is spent through transparent on-chain voting: burn, invest in another project, or distribute as dividends.

London, October 9, 2020 – Hippo Finance, a liquidity mining platform on Ethereum, today announces the launch date of its community governed DeFi hedge fund. Users will generate returns from staking HIPPO tokens in various farming pools, along with growing the decentralized hedge fund which token holders decide to use as a collective.

How does it work?

Hippo Finance is powered by a three token ecosystem: HIPPO, Angry Hippo (aHIPPO), and Dark Hippo (dHIPPO). Each token has its separate use case which compliments each other through staking to form a powerful positive feedback loop. The Hippo tokenomics are designed to distribute all value captured by the protocol back to investors through community governance. Ultimately the mission is to provide a secure long-term farming platform for crypto investors with plans to scale onto Polkadot.

Once launched, the liquidity mining programs and hedge fund management will work as per the following diagram.

Users stake HIPPO tokens individually to earn aHIPPO as rewards, or can provide HIPPO/ETH liquidity on Uniswap to enjoy a x1.5 multiplier. Additionally, aHIPPO/ETH LP tokens can be staked to farm dHIPPO tokens. Stakers will earn 75% of rewards, 20% goes to the fund contract, and 5% is allocated

Yearn.Finance is managing a leadership transition right now and appears to be doing so effectively.

Andre Cronje, the prolific coder and creator of Yearn, said he’s quit the project – and decentralized finance (DeFi) altogether – out of frustration with its realities. 

“I’m not building anything at all anymore,” he told CoinDesk over Telegram on Oct. 1. “I do it because I’m passionate, but if people are going to use my test environments, then lose money, and then hold me liable, it means there is 0 upside and only risk for me.”

Yearn.Finance is the leading robo-adviser for yield in DeFi and the progenitor of the “fair launch” concept that has proved so powerful this summer. However, when users piled into a smart contract he was building in late September that wasn’t ready, got hit by an exploit and then blamed Cronje, that proved too much for the developer.

This is a complicated piece of news for a reporter to share. Cronje told CoinDesk of his decision over Telegram on Oct. 1, but then asked us not to report it. This falls outside of the typical protocol for reporters and sources (“off the record” has to be stipulated up front), and yet we also appreciate that Cronje felt himself under enormous stress. Thus, we held off reporting.  

So we’ve sat on the news, in something of a dilemma, because we were struggling to balance respect for his wishes and the public interest in knowing whether a revered creator is still around. Word has begun to trickle out about Cronje’s move, however (including denials from others involved in Yearn), and the community has begun to sense his absence. It is no longer in the public interest to withhold this information.

While Yearn is clearly not directly comparable to Bitcoin, we think

The recent $200 million hack of Singapore-based major cryptocurrency exchange KuCoin has been making headlines, but the difference between this attack and others in the past has been the hacker’s blatant utilization of everyone’s favourite new crypto frontier – DeFi (decentralized finance).

The KuCoin hacker must have had a lightbulb moment after the crypto media outlet Cointelegraph published the piece Regulatory risks grow for DeFi as a ‘money laundering haven’ not two weeks ago. Bing!

Generally it seems that the true innovation occurring in financial service is happening in DeFi. Imagine redesigning all financial products from scratch? The possibilities are endless. With $1 Billion locked into DeFi at the beginning of 2020, the figure has been increasing rapidly, currently standing at close to $10 Billion – a 10x increase. This is a very young sector with most of the operators not exceeding even 9 months. Mistakes are being made.

As is often the case, these innovations come with a whole lot of compliance risks – such as zero KYC/AML requirements for users on decentralised crypto-lending platforms. No safeguards are put on transaction monitoring so even proliferation financing sanctions can be breached by back-street uranium bargain hunters. 

The lack of these basic safeguards leaves this quickly growing sphere at risk from the influence of bad actors and the majority of these DeFi projects would be treated as money laundering schemes if held to the same level of centralised VASPs – exposing some of the great teams involved in the space to the risks of being party to money laundering and terrorist financing. 

The KuCoin hacker flew that flag when he/she took $millions in Synthetix tokens to the largest decentralised exchange (DEX), Uniswap and another DeFi swap provider, KyberSwap. And the KuCoin event is not the first