The Macalinao brothers, who founded the Saber (SBR) protocol dedicated to stablecoins, allegedly used fake developer profiles to falsify the Total Locked Value (TVL) on Solana’s DeFi (SOL). In fact, Ian Macalinao allegedly created several protocols using Saber symbiotically, posing as 11 different developers.
The Macalinao brothers fake Solana’s TVL with Saber
Our colleagues at CoinDesk have conducted an investigation in which they reveal that the main developer of the Saber protocol (SBR) used fake profiles to distort the total value locked on Solana (SOL). To do this, he allegedly worked under 11 aliases, in order to impersonate different developers. In doing so, he created other protocols to interoperate with Saber.
The developer in question is Ian Macalinao, who created Saber with his brother Dylan. This protocol is focused on stablecoin exchange and at its peak, along with Sunny Aggregator (SUNNY), accounted for 7.5 billion of Solana’s $10.5 billion in TVL according to CoinDesk.
Sunny is actually another decentralized finance application (DeFi) built by Ian Macalinao. This one is used as a complement to Saber and has reached $3.4 billion in TVL in the two weeks it has been in existence.
Let’s say a user deposits $1,000 in Protocol A. By doing so, he will be provided with tokens representing a proof of deposit. Applications can then optimize the perceived return by enticing investors to come and deposit these LP tokens with them.
In this example, we end up with $1,000 on Protocol A and another $1,000 on B, even though there was only one contribution originally.
An unpublished blog post
The principle described above is not a secret in itself and is common to all decentralized finance in general. Indeed, it is common for a new application to come on the market to optimize another one, creating an overlay of protocols.
The difference here is that this was done knowingly in order to manipulate the statistics. A high TVL is indeed one of the criteria to watch out for when choosing investments. Ian Macalinao reportedly described the process in a blog post that was never posted:
“I devised a scheme to maximize Solana’s TVL: I would create protocols that stack on top of each other, so that a dollar could be counted multiple times. […] If the same team built each protocol, the TVL would be dumber as a metric. So I created more anonymous profiles. […] I wanted to give the impression that many people relied on our protocol […].”
This revelation leads to some serious thoughts about the abuses that can occur in decentralized finance. These are elements to keep in mind if one is interested in a protocol that is rising too fast, too high.
These allegations are all the more serious, as Cashio (CASH), a stablecoin project that fell victim to a $52 million hack last March, was also part of the process.
For now, the two brothers seem to be interested in the nascent Aptos ecosystem, if Dylan Macalinao’s Twitter profile is to be believed. This story should now challenge us as investors to dig deeper in our research.
