Author: Jana Serfontein

Jana has keen interest in what cryptocurrencies have to offer in regards to NGO’s, governments and the financial system. And is also intrigued with the psychological effect that cryptocurrencies have on society.

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Axie Infinity DeFi Hackers

Axie Infinity CEO Moved $3 Million Before Disclosing Record $622 Million Hack: Report

Trung Nguyen, co-founder and CEO of Sky Mavis, the studio behind the Axie Infinity blockchain game, reportedly moved around US$3 million in cryptocurrencies before the company disclosed the details of a US$625 million hack.

In March, Axie Infinity weathered one of the all-time largest DeFi hacks when the bridge connecting its Ronin network sidechain to Ethereum was exploited. Now Nguyen has come clean on exactly what took place before the hack was disclosed:

Bloomberg analysed blockchain data to discover that a crypto wallet controlled by Nguyen transferred around US$3 million worth of the game’s AXS governance token from the Ronin sidechain to the Binance crypto exchange. Nguyen’s transfer took place just three hours before Sky Mavis disclosed the hack, almost a week after the attack took place.

Funds Transferred From Nguyen’s Own Wallet

According to Sky Mavis representative Kalie Moore:

At the time, we (Sky Mavis) understood that our position and options would be better the more AXS we had on Binance. This would give us the flexibility to pursue different options for securing the loans/capital required.

Kalie Moore, Sky Mavis

Moore added that the funds were transferred from Nguyen’s own wallet so that AXS short sellers “would not be able to front-run the news”. She also dismissed accusations of other motives regarding the nature of the transfer as “baseless”.

The attack on the Ronin network took place on March 23 but was not discovered until March 29. The attackers stole 173,600 Wrapped Ethereum (WETH) and 25.5 million USDC stablecoins, worth US$625 million at the time of disclosure. They used hacked private keys to gain control of five of the network’s nine validators to sign fraudulent transactions and transfer the funds.

All Users Reimbursed

In the wake of the attack, Sky Mavis announced that it had raised US$150 million to facilitate user refunds. All users were reimbursed after the Ronin bridge was reopened.

Categories
Crypto News Ethereum

Ethereum Tests $1500 Amid Successful Deployment of 10th ‘Shadow Fork’

Ethereum’s 10th ‘shadow fork’ came into effect this week as the network continues to run tests ahead of the much-anticipated shift from the energy-intensive proof-of-work consensus mechanism to proof-of-stake.

As part of the preparation for the third and final testnet merge, Goerli, now expected to take place on August 10, Ethereum has been undergoing a series of shadow forks that copy data from the mainnet to a testnet:

ETH Price Volatility Since Merge Announcement

After shifting the timeline for the merge numerous times over the past two years, Ethereum’s core developers announced earlier this month that the merge was set to take place on September 19. As a direct result, the price of ETH surged almost 50 percent.

The merge, since brought forward to next month, will usher in a process in which holders of a minimum of 32 ETH can pledge their existing ETH in order to create more. The Ethereum Foundation predicts the proof-of-stake model will make the network up to 99 percent more environmentally friendly.

Since shadow fork #10 was deployed on July 26, no significant glitches have been reported. At the time of writing, the price of ETH had experienced significant volatility over the previous 24 hours, ranging from US$1,362.95 to US$1,602.61. 

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Crypto News Education Metaverse

Renowned Ivy League Business School ‘Wharton’ Launches Metaverse Certification

In a first for a US Ivy League institution, the University of Pennsylvania’s Wharton School is launching a six-week online certificate course on business in the metaverse.

Entitled ‘Business in the Metaverse Economy’, the course seeks to educate students about the expanding metaverse and provide them with the tools to address issues within it:

Wharton, one of the world’s leading business schools, has teamed up with consulting firm Prysm Group to design the course, taking the form of more than 50 lectures by industry faculty representatives along with six case studies. The Aresty Institute of Executive Education course has already attracted guest speakers from Adobe, Animoca Brands, R/GA, RLY Network, The New York Times, Second Life and The Wall Street Journal, among other organisations.

According to the program’s academic director, Professor Kevin Werbach:

The metaverse is a significant and broad phenomenon that is still poorly understood. We hope to equip business leaders, consultants, and entrepreneurs with an understanding of the impending opportunities the metaverse brings, as well as the practical knowledge to build solutions of value.

Kevin Werbach, academic program director, Aresty Institute of Executive Education

Australia at Investment Forefront

Wharton claims that the metaverse will become a US$13 trillion market with five billion users by 2030. In fact, research from Analysis Group estimates that as the metaverse increases in popularity, it could make a US$3 trillion global GDP contribution in its first decade.

If growth estimations are realised, a lot more investment will be needed in terms of research and development. An investment of US$100 million was recently made into the launch of the Metaverse Research and Development Centre in Melbourne that will ensure Australia is ready for when the market truly takes off.

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Bored Ape Yacht Club Crypto News Cryptocurrency Law NFTs

Bored Ape Creators ‘Yuga Labs’ Hit With Class-Action Lawsuit Alleging Inflated Values

Yuga Labs, creators of the Bored Ape Yacht Club NFT collection and ApeCoin, are facing a class-action lawsuit brought by international law firm Scott+Scott for allegedly falsely promoting Bored Ape NFTs and ApeCoin as securities with guaranteed returns, but which actually plummeted in value over the past three months.

Case Hinges on Whether NFTs Are Deemed Securities

The proposed class-action lawsuit claims that Yuga Labs used celebrity promoters and endorsements to “inflate the price” of BAYC NFTs and the ApeCoin token. The suit also alleges that Yuga Labs promoted growth prospects and potential massive returns on investments to “unsuspecting investors”. The suit claims:

After selling off millions of dollars of fraudulently promoted NFTs, Yuga Labs launched the ApeCoin to further fleece investors.

Scott+Scott class-action lawsuit

It adds: “Once it was revealed that the touted growth was entirely dependent on continued promotion (as opposed to actual utility or underlying technology), retail investors were left with tokens that had lost over 87 percent [of their value] from the inflated price [peak] on April 28, 2022.”

While no official complaint has been filed in a US federal court, Scott+Scott is currently seeking impacted investors who suffered losses on BAYC NFTs and ApeCoin between April and June this year.

The key to the success of this suit is whether or not the court decides if NFTs are securities, in which case Yuga Labs would have failed to make the necessary disclosure and registration obligations that come with offering securities. Thus far, the Securities and Exchange Commission (SEC) has refrained from labelling any NFT as a security as it would likely bring the broader art market under its purview.

BAYC Hit with Repeated Blows

The legal threat could not come at a worse time for Yuga Labs, given its recent troubles. In April, BAYC’s Instagram account was compromised to the tune of US$2.8 million in an NFT phishing scam.

In the following month, BAYC committed what could be described as a “minting fail” where over US$157 million in ETH was burned as part of the launch of its “Otherside” metaverse.

Then in June, Yuga Labs confirmed that its Discord servers had been “briefly exploited”, leading to the loss of NFTs valued at over 200 ETH (about US$357,000).

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Audius Hackers Illegal Tokens

Hacker Exploits ‘Audius’ for $1 Million in Malicious Governance Proposal

Decentralised music streaming platform Audius has announced that it lost around US$1 million to an unknown hacker early on July 24.

The hacker was able to gain the funds after the platform mistakenly passed a malicious governance proposal that saw more than US$6 million worth of the platform’s AUDIO tokens transferred:

The hacker was able to transfer 18 million AUDIO tokens from the community treasury, an action that was approved by the Audius community, then assigned himself as the sole guardian of the contract by calling the smart contract function “initialize()”.

Once the platform detected that attack, it paused smart contracts and AUDIO tokens initially to prevent further loss of funds but resumed smart contract functionality soon after. Funds in both the community and the foundation treasury are now said to be safe.

Slippage in AUDIO Price

The attacker sold the tokens on decentralised exchange Uniswap for US$1.08 million, triggering a slippage in the AUDIO price. Slippage refers to the difference between the expected price of a token and the price when the order executes, and is expressed as a percentage of a dollar amount.

According to a tweet from security analysis firm PeckShield, the fault is said to have been caused by inconsistencies discovered in the storage layout of Audius:

Audius Designed to Cut Out the Middleman

Audius was established to connect music fans with artists without having the need for an intermediary like a record label. Initially designed to be a blockchain version of SoundCloud, it is a place where artists can produce immutable songs that fans can listen to free of charge.

The platform gives artists the freedom to choose how they monetise their work and ensures that artists receive 90 percent of the revenues collected. The remaining 10 percent is issued to node operators. Audius has become so popular that popular music artists such as Katy Perry, Steve Aoki and the Chainsmokers have invested in the crypto-powered streaming platform.

Audius now has over six million monthly active users and is a community-owned and operated protocol. The platform recently introduced AUDIO Tipping, enabling fans to tip their favourite artists using the native AUDIO token.

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Ethereum Polygon Tether

Polygon (MATIC) Surges 70% Amid Announcement of New ETH Scaling Solution

Polygon (MATIC) has been one of the rare altcoins to experience recent exponential growth, now spurred on by the announcement of an Ethereum scaling and zero-knowledge (ZK) innovation – Polygon zkEVM, the first Ethereum Virtual Machine (EVM) zero knowledge layer 2 scaling solution:

Polygon to the Rescue

The team behind MATIC says it has made a major breakthrough in zero-knowledge proof technology that is fully compatible with the EVM. In the case of a zero-knowledge proof, one party is able to prove the veracity of a piece of information to another party without having to reveal the information itself.

This will allow developers to employ the ZK method for increased levels of security and data privacy:

According to Polygon, its new zkEVM will enhance the Ethereum experience for users and developers alike by adding efficiency and reducing costs while at the same time taking advantage of the leading smart contract platform’s existing secure and trusted framework.

The blog post said: “Polygon zkEVM is for everyone who wants a cheaper, faster way to use Ethereum without sacrificing security or decentralisation. It is permissionless – anyone can use it. It’s also open-source, meaning you can trust the code, rather than trusting us.”

MATIC Soars on Other Fronts

The Polygon network has been busy of late, which has contributed to its recent massive uptick in price. In May, Tether announced that USDT had been integrated into Polygon, meaning that more than 19,000 decentralised applications on the Polygon ecosystem would be able to use USDT.

MATIC’s price also skyrocketed as Disney picked Polygon for its Accelerator Program last month. The program will focus on augmented reality, artificial intelligence characters, and NFTs.

The implosion of Terra has also meant big things for MATIC after more than 48 projects originally built on the Terra blockchain began to migrate to Polygon in the wake of Terra’s sudden collapse in May.

Categories
Crypto News Ethereum Ethereum Name Service

Amazon.eth Domain Owner Ignores $1 Million Bid

The Ethereum Name Service (ENS) domain Amazon.eth received an offer this week to purchase for one million $1 million in USDC, a stablecoin pegged to the US dollar. The offer went unanswered, and no transaction took place.

Should it have gone through, the owner stood to make a 1,000 percent profit on the sale after having purchased the domain name for 33 ETH (worth about US$50,000 today) five months ago:

Interest in ENS Domain Names Soars

Despite the bear market, ENS domain names have been rather bullish. Some attribute the growing interest to their inherent utility, which makes crypto transactions easier. Earlier this month, someone paid 300 ETH for “000.eth”, and other bids for “Samsung.eth” and “Starbucks.eth” worth US$90,000 have come in.

In the first week of July, ENS registrations surged 216 percent. It is unclear whether the owner of the Amazon.eth domain was informed of the offers or did not consider them to be fair:

According to data from OpenSea, other bids for the domain average a modest US$6,200 in USDC. The domain is verified as official by ENS and is owned by an anonymous OpenSea user, 4761BF. The individual making the offer owns about 20 ENS names, with many of them relating to Amazon, including one called “jefferyjefferybazos.eth”.

The “amazon.eth” name was created on August 2, 2017, and expires on October 16, 2036, and was first registered on February 7, 2020.

The expired bid for the “amazon.eth” ENS. Source: OpenSea

What is ENS?

An ENS provides human-readable names to different aspects of the Web3 world, which would commonly include blockchain addresses. Like NFTs, ENS names can be bought and sold on secondary markets such as OpenSea and are often used by crypto users as part of their social media profiles.

Famous brands such as Budweiser took a dive into the crypto market last year and bought an ENS called “Beer.eth” for 38 ETH. Puma, following other sports brands like Nike and Adidas into the metaverse, also bought a decentralised .eth URL from ENS and has signalled its intent by renaming itself “puma.eth” on Twitter.

Categories
Crypto Art Crypto News Metaverse NFTs

Christie’s Art Auction House Bets Big on Web3, Launches Investment Fund

Venerable auction house Christie’s has entered the intersection of art and finance with the establishment of Christie’s Ventures, an investment fund for fintech companies looking to make breakthroughs in the art market:

Christie’s, renowned for auctioning art treasures by van Gogh and more recently NFT art by Beeple, is also famous in crypto circles for auctioning off Wikipedia co-founder Jimmy Wales’ first blog post in the form of an NFT, along with the iMac used by Wales when Wiki launched in 2001.

First Investment in LayerZero Labs

The Christie’s venture capital fund is aimed at making investments that “enable seamless art consumption”. The new fund will initially focus on three broad categories: Web3.0 innovation, art-related financial products, and solutions and technologies that enable seamless consumption of art.

The venture fund’s first investment will be in LayerZero Labs, a cross-chain interoperability company with a strong vision and business model. LayerZero Labs reduces friction in a client’s ability to move assets between blockchains. The project’s co-founder and CEO, Bryan Pellegrino, said in a statement: “We look forward to working with their team to find new and innovative ways to create the most accessible, frictionless experience with assets indexed over multiple blockchains.”

Christie’s has said its new fund will “work alongside portfolio companies to help accelerate their progress, simultaneously advancing Christie’s activities in the presentation, education, and sales of fine art and luxury goods”. According to Devang Thakkar, global head of Christie’s Ventures, “We will focus on products and services which can solve real business challenges, improve client experiences, and expand growth opportunities, both across the art market directly and for interactions with it.”

Auction Houses Step Into the Metaverse

Christie’s is not the only auction house to dabble in the metaverse and Web3 space. In October 2021, Sotheby’s launched its own NFT marketplace, dubbed “Sotheby’s Metaverse”, becoming the first auction house to do so. The platform is powered by Mojito, an NFT studio and technology platform that provides services including brand identity, strategy, and management for NFT businesses.

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Australia Crypto News Regulation

Australian Financial Planning Association Backs ‘Crypto Rule Book’

The Financial Planning Association of Australia (FPA) is showing its support for a “crypto rule book”, calling to regulate crypto assets via exchanges and arguing it would be far too difficult to regulate the underlying assets separately.

Regulate Exchanges, Not the Technology

Ben Marshan, the FPA’s head of policy, strategy and innovation, has said that “the regulation of a financial product or service should not depend on the technology which underlies the asset”, adding:

To this point, investment in crypto assets is as much in relation to the asset itself, such as an ether [ETH] coin or a non-fungible token [NFT], as a bet on the sustainability of the technology platform supporting the asset, for example, the Ethereum blockchain.

Ben Marshan, head of policy, strategy and innovation, FPA

Marshan’s opinion is that besides regulating exchanges, it would be nearly impossible to regulate assets given the way they are housed: “[The products are] so decentralised, they’re in all sorts of foreign jurisdictions.”

He noted further that the regulation of crypto should fall under the current financial services regime and not under a new separate legal framework. Focusing regulation on crypto service providers, such as exchanges, would remove a lot of “complexity” from the equation:

It makes it a lot easier because instead of having to work your way through thousands of pages of the Corporations Act, people can go to a specific section and it’s much more efficient.

Ben Marshan, head of policy, strategy and innovation, FPA

Marshan’s view is that if a rule book were adopted, it would allow financial planners to recommend crypto assets to their clients along with specific training in associated crypto strategies.

“At the moment, it’s effectively illegal because there’s no authorisation around crypto assets,” Marshan said, “and because of that financial planners can’t recommend them and can’t get professional indemnity insurance.”

Calls to Government for Clearer Regulation

While the FPA is pledging its support for a “crypto rule book” to be implemented, many have called on Australia’s new Labor government for clearer regulation when it comes to crypto. In 2021, Aussies lost a total of A$84 million in cryptocurrency scams, which many argue could have been avoided if the previous government had enacted clearer regulations regarding digital assets.

The new government is unlikely to change its stance, having recently confirmed that crypto is not a foreign currency and would remain subject to capital gains tax.

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Australia Metaverse NFTs Sports

Australian Open NFT Project ‘AO Metaverse’ Wins Big in Global Advertising Awards

The Australian Open Metaverse, in partnership with Melbourne Web3 studio ‘Run it Wild’, has won the first Cannes Lions award for an NFT metaverse project in the entertainment category for sports, in this instance the annual Australian Open Grand Slam tennis tournament held in Melbourne in January.

The AO Metaverse project was also awarded a Bronze Lion for “most innovative use of tech and platforms in sports” for its AO Artball, a unique feature that utilised match data from the actual tournament.

How the AO Artball Worked

To create the AO Artball feature, the match court was split into 6,776 squares, each corresponding to a tennis ball NFT. These NFTs would change based on exactly where winning points were scored during the tournament.

Since crowd numbers were affected by Covid lockdowns and many fans were unable to attend in person, the joint creative team built a replica of the Melbourne Park tennis precinct in Decentraland, where people could watch matches and interact with each other in real time.

Fans attending matches in the metaverse had the chance to buy an AO Art Ball NFT linked to a specific spot on centre court that marked the winning shot of both the men’s and women’s championships, along with all other finals matches in the tournament. The project proved such a success that the value of a single championship NFT (the men’s, won by Rafael Nadal) soared 4000 percent.

Cannes Lions Advance Industry, Not Just Business

The Cannes Lions Awards, a global advertising benchmark, is one of the world’s most respected for creative excellence. Companies from over 90 countries enter more than 30,000 pieces and are judged by members of the international creative community. The sole purpose of the awards is to recognise the best work that pushes not just one business, but an entire industry forward.

Adam De Cata, CEO of NFT Tech and founder of Run It Wild, had this to say in response to the award shared with the AO Metaverse:

There’s something truly beautiful when creative, data and technology meet. Having the faith and support of the AO, it’s been a crazy ride pushing the limits of creative and technological possibilities, elevating those we work with.

Adam De Cata, CEO, NFT Tech / founder, Run it Wild

De Cata added: “Accepting this award in the same category as major brands like Adidas, Nike, and Samsung reinforces the power of Web3 and its possibilities.”