Author: Robert Drage

Robert is a freelance researcher, with a background in information science currently interested in blockchain technology and technical developments in the field.

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Convex Finance Crypto News DeFi

Bug Causes Convex Finance to Redeploy $12 Billion Smart Contract 

A “non-crucial” bug in Convex Finance’s reward system has necessitated the protocol to redeploy the US$12 billion smart contract, releasing all the users’ vote-locked CVX.

According to a Twitter post by Convex Finance (CVX), the bug had made it possible for expired locks to relock directly to a new address, allowing them to claim more cvxCRV rewards than they had actually earned:

Due to the way Convex works, a simple edit to the contract would not have sufficed and it needed to be redeployed. This meant that all the vote-locked tokens held in the contract would be unlocked upon redeployment.

As the team wrote in a blog post: “There were no instances of [the bug] being used prior to deployment of the new vlCVX contract. However, since Convex Finance contracts are immutable and non-upgradeable, a new contract had to be deployed. The new vlCVX contract has implemented a fix for this potential bug going forward.”

Redeployment Causes Supply Shock

With the smart contract bug causing a premature unlock of a massive portion of CVX’s token supply, the market behaved in an unfavourable way. All the unlocked CVX was now eligible to be sold on the open market. Within the first 30 minutes, prices were down 20 per cent due to sellers and a resultant massive supply shock.

According to one user: “Based on the website, 72.11 percent of $CVX supply, or 38.1 million tokens, have been unlocked. If only 30 percent of these tokens are dumped today, then about US$250 million in buys will be needed to maintain the $20 price.”

Whales Ever Buying the Dip

This provided an opportunity for a few whales to snatch up some extra CVX. With prices falling to US$15 from around $20 in a matter of hours, some whales managed to snatch up quite a parcel:

The nascent DeFi industry is unfortunately infamous for hacks and bugs due to its complexity. Crypto projects generally work hard to secure users’ funds, and DeFi protocols as large as CVX have billions to worry about. Keeping the protocol secure and fixing bugs are key to ensuring user confidence. Last October, for instance, Compound Finance (COMP) fixed a bug that had been plaguing the protocol for some time.

Categories
Crypto News NFTs Scams

Users Left Fuming After $70 Million Pixelmon NFT ‘Rug’ 

Non-fungible token (NFT) project Pixelmon has gravely disappointed investors who pooled US$70 million after releasing NFTs nowhere near the quality promised in their pitch images. This resulted in falling floor prices where some investors ended up calling it “pretty much a rug pull”.

Some Investors Paid up to $10k Per NFT

Pixelmon was a highly anticipated NFT project that had many investors pouring in money, some of them paying up to US$10,000 for their NFTs. The RPG adventure game uses creature NFTs for players to explore, battle and train with, but after introducing the project as “the first AAA quality game in the NFT space” and raising $70 million, the project under-delivered in a big way:

Pitch Images Paint a False Dawn

Pitch images used for advertising the project bore no relation to what was presented. After Pixelmon delivered its genesis NFT collection earlier in February – just two months after launching the project – the 8,079 NFTs were sold in a Dutch auction format with bidding opening at 3 ETH (US$9,489 at the time). With every NFT selling out within the hour, the project raised a staggering 23,055 ETH, worth US$61 million at current prices.

Twitter users have since openly shared their memes regarding the project after seeing the 3D NFTs that were minted. It wasn’t just the lack of quality that seemed to be a problem, some also looked unfinished while others were acting in peculiar ways:

Following the auction, the price of Pixelmon NFTs on the secondary market had dropped around 60 percent from the original 3 ETH mint price and is now at a 0.36 ETH floor price on OpenSea. This caused early investors who minted the NFTs and held them to lose a considerable amount of money.

Developers Admit They Messed Up

A message was shared with the Pixelmon Discord where the project founder Syber stated that “we made a horrible mistake”, referring to the botched reveal:

The Pixelmon team admits making “a horrible mistake”. Source: Syber

In the message, Syber also stated it would use US$2 million to fix the issues faced by the project. Various users remained disgruntled, since that amount is only 3 percent of what they had gathered and could actually be used to develop a AAA gaming title.

The importance of doing your own research is crucial, especially when investing in a project whose founders are undoxxed (they have not revealed any personal information about themselves). This Twitter user summed up the feelings of the majority:

Categories
Airdrop DeFi Markets NFTs Tokens

New NFT Marketplace X2Y2 DeFi Token Up 225% Despite Bumpy Start   

X2Y2, a new non-fungible token (NFT) marketplace, has seen its token soar 225 percent after launching a ‘vampire attack’ airdrop to attract users from OpenSea.

Following technical difficulties with the drop, the community has had some negative reactions to the way it was handled.

On February 16, X2Y2 launched its Ethereum-based NFT trading platform aiming to rival leading NFT marketplace OpenSea. In also launching a vampire attack airdrop, users from OpenSea who had spent more on their collections were eligible for more rewards and were thus lured away from the top platform.

To be eligible for the drop, users needed to have listed their NFTs on the X2Y2 marketplace:

A vampire attack is a strategic move from new marketplaces to airdrop their coins to users after they complete a set of requirements that increase attraction to their platform.

Since its launch, the X2Y2 token pumped 225 percent but is now trading at lower than its launch price:

X2Y2 price performance. Source: CoinMarketCap

Troubles with the Airdrop Cause Delay

X2Y2’s launch went through a bumpy start after some technical problems with claiming tokens stopped the airdrop for a few hours:

During this time, users criticised the platform’s decision to pause the airdrop, which could have alleviated downward pressure on the X2Y2 price. One user commented: “You have fixed the problems but you don’t resume the airdrop right away? It’s not a good look to wait around for more people to buy in to increase the price before they get dumped on prior to resuming the claiming.”

The project planned to hand out 120 million tokens, but on the day of the launch only 7 percent had been claimed before the airdrop went offline, with users who had already claimed tokens allowed to stake at a massive APY:

X2Y2 is not the only upstart NFT platform launched to challenge OpenSea. Last month, in another example of a vampire attack, LooksRare pitched its LOOKS token to reward users of the platform and hopefully attract existing users from OpenSea.

Categories
Crypto News DAO Hackers Tokens

Build DAO Loses $470,000 Through ‘Hostile Governance Takeover’ 

An unknown actor has taken over the Build Finance DAO by using an inflated number of votes to pass a self-serving proposal, allowing the minting of millions of BUILD and other coins and a subsequent getaway, effectively killing the DAO.

According to a Twitter thread, Build Finance DAO suffered a “hostile governance takeover” with the attacker taking control of the key infrastructure from the DAO. By doing this, the malicious actor was able to wreak havoc on the protocol and drain nearly all of its funds, leaving the community out to dry.

The loss cost the DAO an estimated US$470,000 at the time of the incident. Since then the price of BUILD has tanked after the individual sold more than 1 billion coins into the market, flooding the supply.

BUILD Finance USD price chart. Source: CoinMarketCap

It is with deep regret that we have to inform the community of this total and irrecoverable loss of BUILD DAO treasury assets through the deeds of one malicious actor.

BUILD Finance DAO tweet

What is a Hostile Governance Takeover?  

On February 9, a proposal was made to pass full control of the governance contract, minting keys and treasury to a user named ‘Suho.eth’. After a failed first attempt, the attacker took additional steps to hide evidence of the proposal by disabling the gitbooks and proposal bot.

By sneaking the proposal underneath the radar, the unknown actor used a large supply of tokens to vote through the proposal, allowing total control of the DAO.

With all the access rights, the attacker was able to mint 1.1 billion BUILD tokens as well as drain the liquidity pools on two decentralised exchanges, Balancer and Uniswap. After this, the attacker took a further 130,000 METRIC tokens from the project’s treasury, sold them, and minted an additional 1 billion BUILD tokens. 

Since then, the perpetrator has sent a significant amount of funds to the mixing service on Ethereum, Tornado Cash. The funds transferred add up to around 160 ETH, or just over US$500,000 at the time of writing.

A DAO Left With Nothing

After the looting of its treasury and liquidity pools, members of Build Finance tried make contact with the attacker but it seems there is no reparation in sight. With such major damage done to the DAO’s liquidity, it would be difficult to continue with its project goals.

We would welcome a discussion in the discord with community members about the way to move forward from this, but it is difficult to see a future for BUILD with only its brand recognition and IP assets, and no liquid treasury.

Build Finance DAO
Categories
Industries Korea NFTs Theta Theta Network

New Samsung Galaxy Smart Phones to Come with Theta-Based NFTs 

To celebrate the launch of new flagship models Galaxy S22 smartphone and S8 tablet, tech giant Samsung will be dropping collectible non-fungible tokens (NFTs) through ThetaDrop to South Korean customers who pre-order the new devices.

Samsung has once again included NFTs in one of its new offerings. After the pre-order period, customers who pre-order and pre-book the new Galaxy S22 smartphone or S8 tablet will need to register on ThetaDrop – the official Theta NFT marketplace – to collect their commemorative NFTs via their phones.

Samsung announcement (Korean). Source: Samsung

Pre-orders opened on February 9, and the devices are planned to launch officially on February 25.

According to a tweet from Mitch Liu, co-founder and CEO of Theta Network, customers who hold the commemorative NFT will be provided with “ongoing membership benefits and privileges”.

Our NFT collaboration with Samsung Electronics truly exemplifies global adoption of Theta’s blockchain technology and marks an important milestone in the growth of our core blockchain purpose built for the video, media and entertainment industry.

 Mitch Liu, co-founder and CEO, Theta Labs

Samsung’s Long-Standing Relationship with Theta

Samsung has worked with the Theta network on previous occasions but has now decided to use the blockchain for its specialised capabilities in video, media and entertainment to mint and issue the NFTs:

Samsung’s long-standing relationship with Theta began in 2019 when its venture capital arm invested in Theta Labs as part of its commitment to new technologies such as artificial intelligence, blockchain, and fintech. Samsung also collaborated with Theta when developing its new smart TVs that could act as a media hub and a node to expand the Theta network.

TVs can become relay nodes that are effectively on the edge of the network, and onboarding hundreds of thousands to millions of these devices could significantly bolster Theta’s network capacity.

Theta Network

Samsung has made quite a strong push into the crypto sector and has even opened a flagship store in Decentraland. The Korean company has on multiple occasions added some kind of blockchain functionality to its products, which will certainly support mainstream adoption in the long run.

Categories
Australia Crypto News Cryptocurrencies ETFs Regulation

ASX Chief Executive: More Crypto Companies to List on Australian Stock Exchange  

Dominic Stevens, chief executive of the Australian Stock Exchange (ASX), predicts that more companies with crypto ties could be listed on the Australian sharemarket in the coming year as cryptocurrencies start to play a bigger role in the tech industry.

With an eventful year of crypto companies making it into the mainstream, it seems 2022 may have some more of the same in store. The soon-to-retire ASX chief announced in his retirement speech last week that his mission over the past five years has been to expand the small role of tech companies in Australia’s mining and bank-heavy sharemarket.

Stevens has attempted to do this by allowing Australia to make strides in access to crypto but also by competing globally in the development of the blockchain industry. According to Max Cunningham, group executive of listings at the ASX, the exchange was establishing a framework for other companies backed by blockchain to debut by the middle of this year.

“We are moving on it and our goal is to bring investment-grade opportunities in various crypto asset classes to the ASX in the coming months and years,” Cunningham told The Sydney Morning Herald.

I think as the industry matures, you may see Square-like companies listing into the future, but we’re protective of the quality of the companies on our exchange, and it is a very fast-moving space.

Dominic Stevens, chief executive, ASX

Dorsey’s Block Lists on ASX

Stevens’ comments came just as Jack Dorsey’s Block (formerly Square) was listed on the ASX on January 20 after acquiring the Australian buy-now pay-later firm, Afterpay. The merged company will trade under the ticker SQ after being the first cryptocurrency-related company in the bourse’s history to be listed.

Aussie Crypto Progression

Initially, the ASX was cautious of how it approached crypto-affiliated companies but, as 2021 showed, Australia has been a hotbed for development in the nascent crypto industry. In October the ASX gave the go-ahead to investors to invest in crypto-based ventures through an exchange-traded fund (ETF). The following month, Australia also welcomed Chainalysis, one of the leading blockchain analytics firms, to establish a new office in Canberra after partnering up with the Commonwealth Bank to meet increased demand for its products.

Stevens further revealed that the ASX was looking into adding “pure” cryptocurrency ETFs to allow investment directly into the top cryptocurrencies:

At the end of the day if you look out to 2030, there will only be more technology companies, not less, and it will be a bigger section of the index because that’s just the way the world’s going. To not actually focus on that would have been a mistake.

Dominic Stevens, chief executive, ASX
Categories
Banking CBDCs Crypto News

Zambia Exploring CBDCs but Remains Anti-Crypto  

The Zambian central bank has revealed that it is in the process of researching central bank digital currencies (CBDCs), and plans to implement them by the end of the fourth quarter if the outcomes look positive. This comes after the government of the landlocked East African republic issued warnings about cryptocurrencies earlier in the year.

According to a Bloomberg report, Zambia has joined the growing list of countries researching CBDCs with the joint aim of cutting transaction costs and increasing citizens’ participation in the formal financial system, as well as providing a major upgrade to traceability.

Jamaica is planning to roll out a CBDC in early 2022, and even Australia’s indigenous Sovereign Yidindji Nation in the rainforests of far north Queensland has digitised its own currency.

CBDCs Making Headway

In a recent speech by Kristalina Georgieva, managing director of the International Monetary Fund (IMF), there are about 100 countries currently in some phase of exploring CBDCs, be it research, testing, or distribution.

We have moved beyond conceptual discussions of CBDCs and we are now in the phase of experimentation. Central banks are rolling up their sleeves and familiarising themselves with the bits and bytes of digital money.

Kristalina Georgieva, managing director, IMF

Georgieva added that if CBDCs are well designed, they could offer “more resilience, more safety, greater availability, and lower costs than private forms of digital money”.

Governments Want CBDCs, Not Crypto

According to Bloomberg, earlier this month the Zambian central bank made it clear that cryptocurrencies are not legal tender and should be used “at your own risk”.

Many countries are planning on replacing fiat money with CBDCs due to the advantages they bring to enforce monetary policy. With the advent of digital currency, many more people will be able to participate in the financial system. However, in third world countries, many people don’t have access to devices or the internet, which makes the use case more difficult.

One of the other driving factors is that people are now able to use more methods of payment and currencies than ever before. If the citizens of a country start preferring another currency to their own, it could have negative effects on that native currency.

Categories
Aave Crypto News Decentralized Social DeFi Social media

Aave Devs Launches ‘Lens Protocol’ to Power Decentralised Social Media Platform  

Aave, one of the top decentralised finance (DeFi) platforms, has officially launched its new decentralised social network built on the eco-friendly Polygon blockchain.

After collecting 10,000 signatures in an open letter, Aave decided to pick up the mantle to develop a Web3 native social media platform. CEO and founder Stani Kulechov hinted at designing a Web3 social graph project at LisCon 2021, and it seems the project has now come to fruition.

Lens protocol logo. Source: lensprotocol.eth

Named Lens Protocol, the social graph is described as a “permissionless, composable and decentralised social graph that makes building a Web3 social platform easy”. A social graph is a model or representation of a social network, and has been referred to as “the global mapping of everybody and how they’re related”.

With Web 3.0 being the ownership upgrade of the internet, the platform seeks to solve many of the issues users face with current social network services. Meta, for example, has come under investigation for allowing crypto scam ads.

Unlike social media platforms of the past, Lens Protocol and its content are powered by dynamic NFTs, giving the power and control over content directly to the users, allowing for native content monetisation.

Lens Protocol

Using NFTs to Control and Own Your Content

One of the major selling points of Lens Protocol is that unlike traditional social media, users will have complete control over their content through the use of NFTs. NFTs are the catalyst driving this project:

Profile NFTs are the main primitive of the Lens Protocol. These dynamic NFTs are composable, non-custodial and permissionless. Individual addresses can own profile NFTs, an address can have multiple profile NFTs, and a profile NFT can be owned and run by a DAO via a multisig wallet.

Lens Protocol

The mirror function is an added feature of the social network where resharing a post could actually land users a cut, or “mirror-fee”, from any user who collects original content through the share, almost like built-in affiliate marketing.

As Kulechov told Decrypt, “We believe that content creators should own their audiences in a permissionless fashion, where anyone can build new user experiences by using the same on-chain social graph and data”, adding that “Twitter makes all the revenue from your tweets and the content you share, and Twitter decides which of your tweets get traction through the algorithm”.

According to the project’s official Twitter account, Lens is live on the Polygon Mumbai testnet, with plans for an alpha mainnet launch in the pipeline.

Categories
Crypto News DAO Ethereum

New DAO Raises $45 Million to Free Julian Assange, Vitalik Contributes 10 ETH

Cypherpunks and Ethereum holders have pooled nearly US$50 million into AssangeDAO, a fund to help prevent WikiLeaks founder Julian Assange’s extradition to the US.

After 10 years, Assange still finds himself in a legal battle with the US government after blowing the whistle on sensitive military information. In December last year, the US won an appeal against a British court ruling that had barred Assange’s extradition to the US. If extradited, he faces 175 years in prison for publishing information exposing US war crimes.

In reaction to this, a decentralised autonomous organisation (DAO) was set up to help with “legal fees and campaigning to raise awareness about [Assange’s] extradition case”.

Record-Breaking Fundraiser

At the time of writing the fund had accumulated 14,871 ETH (an estimated US$46 million) since its launch on February 3, including a 10 ETH donation from Ethereum co-founder Vitalik Buterin. The aim of the DAO is to collect funds that will be used to buy into the “Censored” NFT collection created by Assange’s brother Gabriel in collaboration with renowned artist Pak.

According to the DAO, “proceeds raised from the NFT sale will benefit Assange’s legal defence fund and campaign to raise awareness about the free speech implications of his case”.

Motivated by the success of RossDAO, which raised US$12 million to help free jailed Silk Road entrepreneur Ross Ulbricht, the AssangeDAO intends to do something similar. According to its Twitter feed, it is now the largest JuiceBox Ether fundraiser to date, exceeding ConstitutionDAO, which raised 11,613 ETH last November in an unsuccessful attempt to purchase an original copy of the US Constitution.

Cypherpunks to the Rescue

With Assange facing 175 years in prison, many among the cypherpunk community have made sizeable donations to help the whistleblower in distress. WikiLeaks was famously among one of the first websites to accept bitcoin and to help bring mainstream exposure to the cryptocurrency early in its inception.

We, the cypherpunks, are rallying to the cause of a fellow cypherpunk in distress.

AssangeDAO

Assange founded WikiLeaks in 2006. The website gained international attention in 2010 when it published a series of leaks provided by US Army intelligence analyst Chelsea Manning. Assange has been seeking asylum ever since, fighting off extradition, and has languished in a London prison since 2019.

The US government launched a criminal investigation into Assange and charged him with violating the Espionage Act of 1917 by leaking classified information. Assange infamously went on the run, avoiding extradition to Sweden on since-discredited sexual assault charges, before taking refuge in the Ecuadorian embassy in London in 2012.

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Bitcoin Charity Crypto News Industries

GoFundMe Withholds Freedom Funds Highlighting the Importance of Crypto Donations

GoFundMe has withheld US$8 million in donations to the Freedom Convoy 2022 fundraiser for Canadian truckers after police stated it was no longer a peaceful protest. With an investigation pending into GoFundMe, this situation makes a clear case against centralised crowdfunding entities.

Vaccine Mandate Leads to Blockade

The Canadian insurrection has been driven by the Covid mandate requiring that all truck drivers crossing the US-Canadian border be vaccinated. Thousands of truckers in Canada have since gathered in capital Ottawa to protest the mandate and the force with which the state was handling the situation. During the debacle, a fundraiser was started on GoFundMe that raised an estimated C$10million for the protest.

On February 4, however, GoFundMe announced via Twitter that it would stop the fundraiser and reimburse the donors automatically:

According to a BBC report, GoFundMe shut down the fundraiser because the protest was deemed no longer peaceful, stating that “we now have evidence from law enforcement that the previously peaceful demonstration has become an occupation, with police reports of violence and other unlawful activity”. As a result, the company stopped the fundraiser since it was in violation of its terms.

However, truckers insist the protests have been peaceful but that the state is looking for a way to curb the protest due to its ramifications for the city:

How Decentralised Donations Could Solve the Problem

With GoFundMe deciding to scrap the fundraiser, others in the decentralised community have stepped up to create a fund that can’t be blocked by authorities. One such instance is HonkHonk Hodl, which uses the Lightning Network to donate satoshis (fractions of bitcoin) to the Freedom Convoy.

The Canadian Bitcoin community would like to have a second financial access point for #FreedomConvoy2022. Legacy financial infrastructure can sometimes be politicised and clamped down upon, whereas Bitcoin is a truly censorship-resistant method of communicating value. Don’t allow your voices to be silenced, and don’t allow your financial sovereignty to be trampled upon. 

HonkHonk Hodl

HonkHonk Hodl has at this stage reached its goal of 600,000 satoshis, and is in fact well beyond with over 9 BTC (900,000,000 satoshis). Big names in the industry have joined the cause, with KrakenFX CEO and co-founder Jesse Powell, for example, making a donation: