The world of DeFi is going stronger than ever, with many new projects arising every now and then. The sad part is that many unprofessional projects surface at the same time, painting a bad image for the DeFi world. Be it scam projects or unprofessional teams who don’t know what they are doing, there is definitely a good number of bad projects which crypto users should avoid. LAVACAKE.Finance is one particular project that is planning for its very first “Harvest”. Is Lavacake a good investment? Is this a good yield farm to consider?
What is LAVACAKE.FINANCE?
Lavacake.finance is another Yield Farming platform, that prides itself on being “The next generation yield farm on Binance Smart Chain”. They are also an Automated Market Maker, in the sense that they provide liquidity. Having said that, users can participate in staking liquidity pools in order to earn the LAVA token. What sets LAVA aside is that they claim to have anti-whale measures, a harvest lockup, and a transfer tax.
- Anti-Whale: Most crypto traders fear whale activities, that usually affect token prices whenever they sell heavily. This dump is due to a huge transaction of the total supply on the sell-side. In Lavacake, the developers claim that they put in place a system that will reject any transaction that is more than 0.01% of the total supply. This eliminates any heavy dumping that might occur.
- Harvest Lock-up: To prevent farming arbitrage bots that harvest and dump directly for quick profits, Lavacake Finance uses a timelock harvest system to limit the frequency of harvesting. For now, harvest periods are set for 24 hours only, while farming takes 6 days.
- Transfer Tax: Every transaction that happens on the platform will be subject to a 7.5% transfer tax. They also recommend setting a slippage of 8% to buy LAVA on Pancakeswap V2 or other AMM exchanges.
In case there was an attack on the front-end, the devs put in place an emergency withdrawal system, that allows users to withdraw their tokens by direct integration with the MasterChef contract (https://bscscan.com/address/0xfbfae2D489Bb649C7f33d9812b2Dcf17E9bb279C#writeContract). On the other hand, this would immediately remove all the rewards earned.
Why might LAVACAKE Fail?
In the LAVACAKE contract code on Github, there appears to be an exception for the “Anti-whale” system, which the company prides itself on. As explained previously, the anti-whale forbids any user to dump more than 0.01% of the token total supply. On the other hand, there is an exception for certain wallet addresses from the “Anti-whale” restriction. So the company gave an exclusion for certain wallets to be able to dump more than “normal people”. This means that the Anti-whale system is useless, and only in the hands of the owners themselves!
This clearly appears in the commit code line 1150 and 1151 in figure 1 below.
How did the Company handle this Concern?
Lavacake.finance has a Telegram group with well over 38K members. When asked about the above exception to the Anti-Whale system, no one was able to answer the question after 24 hours. People also started to feel the heat when no one was even replying to the question, or some users (whose username is long so they get mistaken for admins) answer in a very broad answer, failing to address the issue. If the event of dumping on harvest day DOES happen, the price of LAVA can fall from the current price of $10K all the way to $50 or even less, as seen in other projects.
We at CryptoTicker have been monitoring the project closely and found many red flags, and we had to share them with the community. This would definitely raise more awareness, so that the events of Iron.Finance don’t happen again. The wallet addresses to be watched are the following addresses that devs claim are the exception to the Anti-Whale system:
- Dev address: 0xAc395eD94ddf317c8Bb9Ca966B1eb3ee98AF87eB
- MasterChef address: 0xfbfae2D489Bb649C7f33d9812b2Dcf17E9bb279C
- Fees address: 0x77931e5E5F89f9164D9100329A9b2656b0ACD63B
Conclusion: Should you Buy LAVACAKE?
If you like gambling and don’t mind losing money in case things turn sour, you can check out LAVACAKE and partake in their Yield Farming. Watch out for any dumping that might occur on their harvesting day, and only invest amounts you can afford to lose. We at CryptoTicker will definitely keep an eye on this project and see what happens on this big “Harvest” day.
LAVA current Stats:
– Total LAVA Supply: 227,299
– Total LAVA Burned: 717
– Current Market Cap: USD 2.4 Billion
– Max transaction amount: 22.80 LAVA
– Transfer tax: 7.5%
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