Cryptocurrency trading volume across decentralized exchanges (DEXes) reached an all-time high above US$161 billion in the past month, according to market data shared by CryptoRank. Overall, trading volume in the crypto market grew significantly in May as centralized exchanges also saw a record high in monthly volume.
DEXes Gain 16% in Monthly Volume
The massive jump in trading volume represents a 16 percent increase on the previous month (US$138.1 billion). The May figure also translates to a 157 percent rise since January 2021.
To break down the volume, Uniswap was ranked the largest decentralized exchange with nearly US$58 billion in volume, while the Uniswap V3 closed at US$24 billion, according to data from TheBlock. Uniswap is followed by SushiSwap, 0x Protocol, and 13 other exchanges.
At the time of writing, PancakeSwap leads in reported 24-hour volume with US$371 million, followed by Uniswap, SushiSwap, 0x Protocol, Balancer, BakerySwap, and 1inch.
The total value of digital assets locked in decentralized exchanges was US$21 billion as at June 2.
Centralized Exchanges Exceed $2 Trillion in May Volume
The crypto market gained more trading volume last month regardless of the drops in major coins. This is evident as centralized exchanges also reported a 37 percent increase in trading volume to more than US$2.2 trillion last month, consecutively closing a trillion-dollar volume for the fourth time. Binance accounts for about 66 percent of the entire volume in May (+US$1.5 trillion).
Thailand’s Securities and Exchange Commission (SEC) has flagged that decentralised finance (DeFi) needs to be regulated and future projects may require a licence to operate in the country.
The Bangkok Post reports that soon after Tuktuk Finance, a DeFi farming platform, had its coin and farming service debut on Bitkub Chain, the price quickly shot up to several hundred US dollars and then plummeted to US$1 in just a few minutes.
After this incident the SEC made its first official announcement regarding cryptocurrency, which stated that regulation is needed in order to safeguard potential investors. The SEC stated it would specifically look into DeFi protocols that issue coins.
The issuance of digital tokens must be authorised and overseen by the Securities and Exchange Commission and the issuer is required to disclose information and offer the coins through the token portals licensed under the Digital Asset Decree …
SEC
Dome Charoenyost, founder of security token service Tokenine, added that “we could see SEC-regulated DeFi platforms in the future”, which would be a major bonus for investors looking to use Thai DeFi platforms. These platforms would need to be vetted for the safety of consumers. Projects will also need to be compliant, which will reduce the risk for investors of buying into a fraudulent token, or one whose price can be easily dumped.
However, regulations such as these can be difficult to enforce since the majority of DeFi platforms operate outside Thailand, and if the creator of a DeFi protocol wants to remain anonymous it’s quite possible.
Numbers of Thai Crypto Users On The Rise
Data compiled by Thailand’s SEC and published by Bloomberg indicates combined volume across licensed Thai crypto exchanges increased from US$574.5 million in November 2020 to US$3.96 billion in February 2021, a jump of almost 600%.
Due to this boom, new know your customer (KYC) regulations will be implemented by September 2021 to block access by foreign investors to Thai exchanges. This will also reduce the number of accounts attached to those exchanges.
Banks have embraced DeFi in Thailand, with the Siam Commercial Bank announcing a US$50 million investment fund in February, and Kbank experimenting with DeFi services as part of its business expansion plan.
Decentralized Finance (DeFi) space on Ethereum has been gaining traction since the past year, despite some projects having left the network amid expensive fees and slow transactions.
Nonetheless, the total value of digital assets locked on the Ethereum-based DeFi protocol increased by four percent this month, according to market data from CryptoRank.
$66 Billion Was Locked in Ethereum Protocol in May
Since this month, about $66.35 billion USD worth of cryptocurrencies has been locked on Ethereum DeFi space. An all-time high of over $88 billion USD was recorded on May 12 before the market began to plummet.
This record today represents about a four percent increase compared to the $63.70 billion USD TVL recorded last month. Compared to the past months since May 2020, this is the lowest TVL percentage increase in the Ethereum DeFi space, which can be attributed to the recent massive correction of the market. Bitcoin (BTC), Ethereum (ETH), and some other major altcoins dropped significantly in value, which affected the market capitalization of cryptos globally, including DeFi.
Meanwhile, on the year-over-year (YoY) chart, the total value locked in Ethereum-based DeFi protocols is up by over 7,104 percent, as per analysis by CryptoRank.
Total value locked across the spectrum of smart contracts, protocols and #DApps built on @Ethereum increased by 4% in May: $63.7B —> 66.35B. A new ATH in TVL of $88.8B was registered on May 12.
— CryptoRank Platform (@CryptoRank_io) May 28, 2021
Gross TVL on Binance Smart Chain
Binance Smart Chain is possibly the main competitor of Ethereum for DeFi projects. As of 28 May, the total gross value locked in protocols on the Binance Smart Chain was $16.6 billion USD, according to data from The Block. PureSwap was rated as the largest protocol with over $23.69 million USD.
Value Locked by DeFi Projects on BSC [source: The Block]
The third annual Global Crypto Hedge Fund report, released on Monday, aims to provide an overview of the global crypto hedge fund landscape. With the majority of the report looking quite bullish for the crypto space, it appears institutions are warming up to crypto.
Crypto hedge funds have heavily increased their Assets under Management (AuM) in the past year. The 39 surveyed funds are currently at $180 billion USD AuM and according to the report, 86% of them are intending to add more capital into the asset class by the end of 2021. This is a massive 4,600% increase from $3.8 billion USD AuM in 2020. The average AuM for this year’s surveyed funds increased from $12.8 million USD to $42.8 million USD.
Some major topicsdiscussed in the report:
Decentralised Exchanges Usage By Hedge Funds
Fund Manager Bitcoin Predictions
Future Fund Intentions
Reasons and Obstacles to Investing
Decentralised Exchanges Usage By Hedge Funds
DeFi protocols aim to deliver peer-to-peer financial services, which allow cryptocurrency trading, loans, interest accounts without the use of banks or traditional finance intermediaries.
Between April 2020 and April 2021, the trading volume on these platforms grew more than 90-fold, with Uniswap making up for half of the DeFi market volume in April 2021.
3rd Annual Global Crypto Hedge Fund Report
Whilst they may be still far from using decentralized applications, many financial institutions are trying to be more educated and try to understand the potential impact that DeFi may have on the future of financial services.
Henri Arslanian, Global Crypto Leader at PwC
Fund Manager Bitcoin Predictions
Data shows that managers remain bullish on Bitcoin, with the median predicted price being estimated at $100,000 USD. In fact, the majority of predictions were in the $50,000 to $100,000 USD range (65%), with another 21% predicting prices would be between $100,000 and $150,000 USD.
Market cap predictions are also optimistic, with the majority of fund managers estimating the total crypto market capitalisation will be between $2 and $5 trillion USD. Meaning that they see there is still lots of investing to be done in the space before the end of the year.
3rd Annual Global Crypto Hedge Fund Report
Future Fund Intentions
The decentralised finance (DeFi) space has gotten a lot of attention in the past year with traditional finance looking at new technologies and adding them to their portfolio. The oracle service Chainlink (LINK) was included in 30% of hedge fund investments, with blockchain interoperability protocol Polkadot (DOT) and liquidity protocol Aave (AAVE) making up 28% and 27%, respectively.
The survey highlights that around a fifth of survey hedge funds are currently investing in digital assets. And when asked what investment strategies (fundamental, trading, arbitrage, venture, pre/post ICO, passive, other) best describe hedge funds exposure to digital assets, the majority responded with fundamental (57%) and trading (57%).
Reasons and Obstacles to Investing
Reasons given by hedge fund managers for including digital assets in their portfolio are ‘general diversification’ – as per 57% of respondents. Of the remainder, 29% stated ‘exposure to a new value creation ecosystem’ as the primary reason to invest while 14% suggested that it made for a good inflation hedge.
The main obstacles to investing, regulatory uncertainty is by far the greatest barrier (82%). Even those who do invest in digital assets cite it as a major challenge (50%). Client reaction/reputational risk is high (77%) as well as digital assets being outside the scope of current investment mandates (68%).
3rd Annual Global Crypto Hedge Fund Report
Around two thirds of Traditional Hedge Funds said that if the main barriers were to be removed they would either actively accelerate investment in digital assets or potentially change their approach and become more involved (64%).
From the findings in this report it’s evident that hedge fund allocations to digital assets continue to gain traction. Diversification and exposure to a new value creation ecosystem are cited as key drivers for investing in digital assets. This is unsurprising given that hedge funds tend to be early adopters, at the forefront of innovation whilst remaining committed to achieving the best performance possible. Further education, regulatory clarity and the evolution of service providers and related market infrastructure could lead to the acceleration of increased investment and further institutionalisation of the industry.
Question mark neaon photo
https://unsplash.com/photos/8xAA0f9yQnE
DEFI100 (D100), a DeFi project dealing with virtual assets, has gone down.
At the time of writing, visitors to the DeFi project’s website are being displayed a “404 – Not Found” message.
Error “404 – Not Found” on Defi100.org
It is not clear whether D100 has gone down as a result of a hack, or if instead the project has done a so-called rug pull – that is, an exit scam by intentionally becoming unavailable, disappearing with all of the funds.
$32 Million USD Estimated Vanished
Similar to other times where DeFi projects were messed with, the bad actors accompanied their misdeeds with a little taunting. An analyst know as CryptoWhale on Twitter has shared the news, speculating $32 million USD in investor funds have been siphoned off.
REMINDER: As the bull market fades, many projects will too! Expect a huge increase in exit scams over these next few months.
Never invest in projects that are very new, with anonymous teams, made as memes, and have a lack of real utility. Stay safe everyone!
2/2 Yes, our investors faced huge losses as project failed to achieve what we hoped for. But there is no exit scam and we are still working on finding a way to bring the project back on its feet.
It is worth remembering that this is not the first time a DeFi project is suffering this kind of situation. However these claims are being treated with great suspicion by Twitter users, with some arguing this is just a cover-up before maybe an even bigger heist is pulled off.
DYOR Reminder
Whether the project stole the funds or just suffered an attack by anonymous bad actors, the website remains down and the price of D100 has plummeted by over 50 percent, currently being traded around $0.08 AUD.
The same analyst who broke the news also reminded everyone to be wary of shady projects with anonymous devs, especially in periods of bear market – which might encourage malicious players to take their bags and go home. As always, Do Your Own Research.
FinNexus is an application layer DeFi protocol that allows developers, service providers, and project participants to easily interact with blockchains. FinNexus has its own utility token called FNX, which plays an important role in the functioning of the ecosystem and it relies on an ERC-20 smart contract.
The development team confirmed the incident in a tweet, saying that the ERC-20 contract was hacked. They instructed FNX investors and traders to withdraw their funds from the pool for safety reasons.
To all FinNexus users. As we investigate what appears to be a hack, please do withdraws your funds from the pools to ensure their safety.
Rest assured the team is working on finding the causes of this problem and a solution to it.
According to Blec, someone stole the admin key, which enabled them to change ownership of the contract to a new address. They were able to create more FNX tokens, only to sell them a few minutes later. This resulted in a massive decrease in the token’s value.
DO NOT HOLD A TOKEN THAT HAS TRANSFERRABLE OWNERSHIP WITH A SINGLE EOA OWNER.
Investigate transferrable ownership for noobs:
* Search token on Etherscan * Click "Contract" address * Click tabs Contract>Read Contract * "New Owner", "Transfer Ownership", etc are your clues. pic.twitter.com/fE8mVHp2FY
At the time of writing, the FNX token was trading at around $0.06 USD on CoinMarketCap. After dropping over 90% in price, it has recovered a little but it’s still more than 80 percent decrease in the token’s value over the past 24 hours. The market capitalization is also down to around $2.2 million USD.
Based out of Sydney, a new DeFi platform called Marhaba will be working to explore ways to bring decentralised finance to over 2 billion Muslims in a way that does not contradict Islamic laws on usury and investments.
Marhaba – which means “Welcome” in Arabic – is a new DeFi platform started by Naquib Mohammed, after noting the moral dilemmas many Muslims face when thinking about getting into cryptocurrency.
“We are building a platform that aims at the inclusively of the community and a trusted place where faith-conscious Muslims can be onboarded without any hesitation or doubt.”
Solving Religious And Moral Dilemmas
Set of Elegant Ramadan Kareem Lantern or Colorful Lights in Islamic Pattern
Since Islam prohibits high-interest loans, aggressive derivatives and excessively risky investments, one can see how cryptocurrency may put devout Muslims in a bit of a pickle when considering whether to get into crypto and decentralized finance.
“In the Muslim countries, we found that 99% of the time, people ask: ‘Is this token Halal? Is this token Shariah-compliant?’ […] Question number two is: ‘Where do you buy this? The reason that Bitcoin is still under discussion by some scholars in the Islamic ecosystem is because nobody knows who the creator of Bitcoin is. If you don’t know who created it — that means the thing is under doubt.”
Additionally, artistic depictions can also be tricky to deal with due to religious laws concerning idolatry. However, as anyone familiar with mosques such as Nasir al-Mulk in Shiraz can tell you, abstract patterns are fair game – which allows for the creation of NFTs that do not conflict with Sharia Law.
Marhaba Finance aims to solve both of these issues by collaborating with Islamic scholars to create their platform according to the precepts of Islamic law. They will also launch a non-custodial “Sahal” wallet, which will allow for transfers and custody of “Shariah-screened NFTs and tokens”.
Ethical Wallet and Trading Platform
According to the whitepaper, the project will launch in 2021 both a “Sahal Wallet” and Ethical Trading Platform and other features through the Marhaba Decentralized Financial Platform (MDFP).
The project will launch the $MRHB ERC-20 token using Ethereum with a supply of 500 million tokens (see the whitepaper for token allocation).
The NFT marketplace is scheduled for launch later this year. With a sharia-compliant version of yield farming will also be coming to the platform – as well as ways to donate to charity, fulfilling another obligation to the five pillars of Islam.
The project is also supported by Blockchain Australia and Neo Legal to assist with crypto regulations.
Decentralized Finance (DeFi) is a new financial system powered by blockchain technology, the same tech which powers Bitcoin and Ethereum.
DeFi is the technology which powers NFTs and Decentralised Exchanges such Fantom, Australian based DEX. The DeFi market is really booming right now, we recently saw DeFi Tokens Generated $252 Million In Revenue For April 2021.
Let’s take a look at the most common risks of using DeFi.
10 Risks Of DeFi Investing
1. Financial Risk
Because DeFi is a new technology, it comes with sizeable financial risk. We have seen people that have lost millions, and also those that have made millions. The financial risk of DeFi could be considered high risk, high reward, depending on a number of factors, mentioned below.
2. Counterparty Risk
Some of DeFi is completely decentralised and some is “semi-decentralised”. For example, using Uniswap to facilitate on-chain peer-to-peer crypto transactions would be considered completed decentralised, as it transacts directly using the Ethereum blockchain. And on the other hand, an example of a semi-decentralised platform would be Binance Smart Chain (BSC), a clone of Ethereum, is controlled by Binance.
3. Software Risk / Smart Contract Bugs
A bug is what allowed hackers to drain 6.3 million ETH from the Dao back in 2016; the first major project to resemble what we now call DeFi today. Reputable DeFi platforms attempt to mitigate the risks of bugs by hiring strong teams of developers and by submitting their code to auditing teams. However time after time we have seen both audited and unaudited code fail a DeFi community, leading to loses in the millions of dollars. This has seen the arrival of DeFi insurance; offered by companies such as Nexus Mutual and Swissborg.
4. Storage Risk / Phishing
Crypto stored in non-custodial wallets risk the loss of funds through phishing. This is where a user is tricked into giving out their seed phrase, or entering it into a fake website. It is a very sure fire way to lose everything in your wallet. The lesson: Never Ever enter your seed phrase to an unknown source or store it in a digital file on your phone or computer, where you could get hacked.
5. Platform Risk / Oracle Failure
Oracle failure has been a major vector of attack in DeFi in 2020. Where bad actors use a Flash Loan to buy or sell an asset, which manipulates the price of that asset just long enough for them to arbitrage the difference and exploit a protocol for millions. This is why projects such as Chainlink are so highly revered, because they solve a massive challenge in DeFi adoption.
6. Security Risk / Admin Key
When you hear of “Rug Pulls” it’s usually because of an admin key. We always have to be on the look out for centralised admin controls that allow a developer or team to lock or move funds deposited into the DeFi app. The most reputable teams in DeFi such as Compound will firstly put in a timelock that prevents changes to code from happening without approval from a Dao governing upgrades and proposals. Secondly they will add a time delay so a community will be warned if a potentially unfavourable or controversial change is coming to the protocol.
7. Liquidity Crisis
Liquidity crisis refers to a lock up of funds and a lack of liquidity. For example: if you lend Dai to Aave, all the Dai is then subsequently borrowed and the app indicates that 100% of Dai is utilised, then you can’t your Dai out until some borrowers return the funds. This can become a real risk particularly due to the use of over collateralised loans that dominate DeFi.
8. Protocol Risk / Governance Failure
Governence failure is another factor interwoven into DeFi protocols. There are debates over whales exerting their massive influence to their own best interest and hurting the smaller fish in the wider community. Others argue that whales wouldn’t self-sabotage a protocol where their money is invested. There are also ongoing debates over deep-pocketed CFi now exerting their influence on DeFi governance and protecting the interests of the larger exchanges.
9. De-Pegging
Pegged assests or Stable Coins risk the chances of de-pegging. This can cause many issues, like an AMM liquidity pool going to zero.
While there are still many problems and risks associated with DeFi, they are being addressed as the cryptocurrency space evolves. DeFi is still very new but as it matures and improves, we will likely see more and more users moving to DeFi in the near future.
10. Compound Risk
All of the risks together form a compound risk for the entire DeFi application. Over time, as this new technology starts to mature, and go through testing and fixing phases, we will see fewer critical edge case risks and lower compound risk.
Last weekend, Rari Capital was hit with an attack that left them down by 2600 ETH – which was around 60% of all user funds in the Rari Capital Ethereum Pool.
A DeFi company that automates yield farming by rebalancing users’ funds and pools, the attack seems to have been carried out by “evil contract” exploits affecting the HomoraBank contract.
There has been an exploit in the Rari Capital ETH Pool related to our @AlphaFinanceLab integration.
The rebalancer has removed all funds from Alpha in response.
We are currently investigating the situation and a full report will be shared once everything is assessed.
We are notified that @RariCapital has suffered from an exploit that was due to the incorrect assumption when using HomoraBank contract, as they were setting up an ibETH pool on their platform.#Alpha team is here to help.
— Alpha Finance Lab (@AlphaFinanceLab) May 8, 2021
The hacker’s message
Currently in possession of an ETH wallet recently emptied into Tornado.Cash Proxy transactions, the hacker took the time to leave a tongue-in-cheek message to the recently attacked DeFi firm.
The hacker has left a base64-encoded message saying
However, the message also seems to indicate that Alpha Homora’s security prevented Rari from taking yet another $6 million in losses.
In an update by the founder of Rari Jai Bhavnani, holders of the DeFi firms tRGT token will be able to claim reimbursement in RGT – up to a total sum off all reimbursed losses of $26 million.
While it was indeed initially meant to scale the team, all of the protocol contributors have elected to give that 2M $RGT back to the DAO with the ask of using the newly acquired $RGT to reimburse lost funds and reward those that helped in the war room.
Jai Bhavnani, founder of Rari Capital
The price of RGT dropped steeply after the attack, losing nearly half of its value. Reportedly it has been proposed that the reimbursement funds will be taken from the developer incentive stash held by the DeFi company, in possession of 1% of all RGT.
Last month, cryptocurrency users gained over $250 million USD from top protocols in the decentralized finance (DeFi) market, according to data from The Block.
This is the highest monthly revenue ever generated by DeFi protocols, which includes Uniswap, Maker, Compound, Aave, SushiSwap, and seven others.
Monthly DeFi revenue [TheBlock]
According to the data, the protocols precisely generated about $252 million USD in April revenue. This revenue accounts for the profits made by DeFi token holders as well as protocols’ liquidity providers and other users.
Daily DeFi revenue [TheBlock]
Daily revenue increased by six percent to $8.45 million USD, from April to May. The cumulative DeFi revenue reached about $1.13 billion USD, as of 1 May 2021.
Uniswap Leads DeFi Revenue With Over $113 Million
The leading decentralized exchange (DEX), Uniswap, posted the highest revenue, about $113.66 million USD, followed by Compound ($46.08 million), SushiSwap ($35.23 million), Aave ($24.72 million), Maker ($10.45 million), while the other protocols generated combined revenue of $22.17 million USD.
The increase in the DeFi revenue last month could be attributed to the overall growth of the DeFi market, especially in April.
DeFi Pulse graphs on 11 May 2021
Following the data provided by DeFi Pulse, the total value of assets locked in decentralized protocols increased by about 40 percent from April to May. The total value locked in DeFi is worth $83.01 billion USD at the time of writing.
