The Scroll ecosystem has been plagued by controversy following the suspected rugpull of Essence Finance, a stablecoin project within the network.
Essence Finance’s stablecoin CHI has fallen more than 98% in the past 24 hours to $0.077 amid concerns that more than $20 million in collateral may have been stolen.
The last communication from the project was a tweet sent on September 11, further raising suspicions. Essence Finance’s audit report had previously been linked to FEI Protocol V2 and was under review in light of recent developments.
The sharp decline in CHI’s value and the apparent elimination of significant collateral funds have shaken investors. The Essence Finance incident adds to the growing concerns about security in decentralized finance (DeFi) as projects on layer-2 networks like Scroll continue to expand rapidly.
In the same week, Scroll, an Ethereum layer-2 network, released its highly anticipated SCR token via an airdrop. Despite the excitement, the airdrop received mixed reactions from recipients. According to an official blog post, Scroll allocated 5.5% of the total SCR supply, or 55 million out of a total of 1 billion tokens, to early contributors and users.
The distribution included 40 million SCR tokens for on-chain participants who earned 200 or more Scroll Marks, points awarded for engagement with the network. An additional 1% was shared equally among eligible wallets, while another 0.5% was distributed as bonuses for users who met certain criteria.
*This is not investment advice.