DeFi Kingdoms Exploit Leaves JEWEL in Freefall

DeFi Kingdoms
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JEWEL is down more than 79% since its January 2022 highs

Trouble in paradise this week as GameFi powerhouse DeFi Kingdoms on Harmony suffered an exploit over the weekend that impacted the speed at which players can unlock their locked JEWEL tokens. The exploit caused JEWEL to plummet more than 50% down to $1.28 on Sunday, May 1, to rebound back to $1.89 at writing. 


  • JEWEL is down more than 79% since its January 2022 highs 
  • Exploit impacted the speed at which players can unlock their locked JEWEL tokens
  • A patch to fix the exploit went live on Saturday, but JEWEL has not fully recovered 
  • JEWEL is $1.28 at writing, which is 50% down when compared to January 2022

DeFi Kingdoms exploited 

An exploit allowing players to mine locked JEWEL from multiple accounts caused a big drop in the price of JEWEL. In addition, a lack of new players has caused recent sell pressure. Combining these two elements, caused JEWEL to drop significantly in price. According to DeFi Kingdoms developer Frisky Fox, mining locked JEWEL can be unfairly increased by transferring it between multiple accounts, allowing more Heroes than intended to mine the locked JEWEL simultaneously. 

The exploit resulted in a small amount of extra JEWEL entering the market compared to legitimately mined amounts of JEWEL. However, the price of JEWEL took a big hit in the 24 hours immediately after the exploit. It’s also worth mentioning that JEWEL has been consistently down trending over the last few months. Just four months ago, the price of JEWEL was more than $22. At writing, it’s less than $2. However, more positive signs are present this morning as the price started to recover and increased by 21.5% in the last 24 hours.    

The plot thickens 

On April 30, a Twitter user threw up a status calling for help using the Harmony block explorer as they believed they had uncovered some shady business. They spotted that one of the biggest whale wallets with 40 million Harmony ONE currently locked mints a massive amount of LP tokens with 0 JEWEL in their wallet. The cry for help was to figure out where the wallet originally got JEWEL to be part of DeFi Kingdoms in the first place.

Using the DFK Tracker in tandem with the Harmony block explorer, the person identified that the wallet had never received JEWEL but that they spent 2 million JEWEL on minting Liquidity Provider tokens when the pool opened. A user needs equal amounts of the two tokens in the pool to create LP tokens to add liquidity.  Importantly the wallet address is not tied to a developer account as it is not listed anywhere, yet still, it has been dumping millions of dollars worth of JEWEL since DFK’s inception. 

Another exciting thing uncovered by the Twitter detective is that this account was initially called Liquidity. According to moderators, the controllers have since managed to rename their account to LiquidLuck, which shouldn’t be possible. Notably, the onlooker is clear that they are no Harmony block explorer expert. They are neither accusing the DeFi Kingdoms team of anything, but instead raising a concern and asking for some answers. 

DeFi Kingdoms dropping off 

Data indicates DeFi Kingdoms had been organically waning lately, with the number of wallets connecting to it taking an almost 35% nosedive in the previous seven days. The number of transactions is also down by over 30%, showing that players have lost some interest in the platform.

Moreover, the abundant JEWEL rewards handed out to players increased sell pressure without new players to balance the game’s economy. The exploit comes at a critical time for DeFi Kingdoms as other combatants in the GameFi category started to mount a serious charge. 

DeFi Kingdoms on the ropes 

DeFi Kingdoms arrived on the Harmony blockchain on August 23, 2021, and describes itself as a game, a DEX, a liquidity pool opportunity, and a market of rare utility-driven NFTs. All played out seamlessly in the nostalgic form of fantasy pixel art and the timeless appeal of farming. 

The game launched in late August 2021, just as DappRadar reported 1.54 million daily unique active wallets connecting to dapps during Q3. Furthermore, play-to-earn and GameFi dapps continued to drive usage within the industry, with the number of unique wallets connecting to game dapps increasing by over 140% when comparing Q3 2021 with Q2 2021. The time was right for DeFi Kingdoms to make an impact. Fast forward just six months, and a slew of competitors have been knocking on the gates to the kingdom while numbers are also down for similar projects as we enter Q2. 

Axie Infinity has been hit lately due to the Ronin bridge exploit and surrounding negativity; users are down more than 10% in the last 30 days as the leading blockchain game tries to reconfigure itself for 2022. Crazy Defense Heroes, which had also been riding high, has seen its number of users dip off by more than 20% in the previous thirty days, while BNB Chain’s shining star MOBOX has also taken a 10% hit in users. However, while some of the more established dapps show signs of fatigue, others are bursting onto the scene and capturing users’ imaginations with juicy introductory tokenomics. 

New GameFi attracts the crowds 

Meanwhile, over on Avalanche, Crabada, a game similar in style to Axie Infinity, has been getting lots of attention. In the last 30 days, it increased its user base by more than 21% and boosted transactions by almost 50%. Those players that perhaps bailed on DeFi Kingdoms and Axie have found a new challenge over on Crabada

Polygon’s Aavegotchi has been crushing it since the release of its Gotchiverse a few weeks ago. It increased its user base by more than 690% in the last 30 days and generated 1.79 million transactions. 

DeFi Kingdoms established itself as a top blockchain game last year. Crypto influencers such as Ansem regularly expressed their bullish outlook on the game, while the Crystalvale expansion fueled hype further. However, despite a dedicated developer team and the game’s recent launch on their Avalanche subnet, DeFi Kingdoms has not fared well in a bearish crypto market. Whether the game will be able to recapture its player base in the future remains uncertain. 

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The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.

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