The Vulnerability of BNB Chain to Rugpulls

BNB Chain has unfortunately earned the unenviable title of being the “preferred target for rugpulls,” as highlighted in a report by bug bounty platform Immunefi. Over the span of seven years since its inception, a staggering $1.64 billion has been lost to various hacks and rug pulls on the BNB Chain. Of this amount, $1.27 billion has been attributed to hacks, with the remaining portion linked to rug pulls.

A rug pull is a deceitful scheme where a project is created with the sole intention of siphoning off deposited funds before abruptly abandoning the project altogether. The report delves into 228 cases of rug pulls, amounting to losses of $368 million. The most significant incident was the $40 million DeFiAI rug pull in November 2022.

In stark contrast, Ethereum, the second-largest blockchain and the leading smart-contract platform, has experienced losses totaling $3.6 billion. However, only 4.4% of these losses are attributed to rug pulls, according to the report.

Immunefi points out that the primary reason for BNB Chain’s vulnerability to rug pulls is the prevalent use of forked code by developers. Additionally, the allure of “get-rich-quick” schemes often draws in the BNB Chain community.

Despite these challenges, there has been a decline in losses over the past year due to strategic hard forks such as ZhangHeng, Plato, and Hertz aimed at addressing network vulnerabilities. This year, the losses have further decreased, with only $38 million lost year-to-date.

Furthermore, BNB Chain has been a target for various exploits and hacks. Notable incidents include the $200 million loss due to price manipulation of the Venus Protocol’s native token in 2021 and the $80 million loss suffered by DeFi protocol Qubit Finance after a hack on the QBridge in 2022.

As of the time of publication, BNB Chain had not responded to an email requesting comment.