Category: DeFi

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CeFi DeFi

Milestone: Total Assets Locked in Decentralized Has Surpassed $15 billion

Binance Australia Tops BTC Market in Bitcoin and Ether 24-Hour Volume

Interest in the decentralized finance (DeFi) market is still growing gradually, although the industry hypes seem to have calmed down lately. According to the information on DeFi Pulse today, the market valuation of assets locked in DeFi protocols has surpassed another milestone record of US$15 billion. 

DeFi market is considered as the next big thing in the cryptocurrency ecosystem, as it provides high-interest earning opportunities for participating investors.

DeFi TVL Reaches New ATH at US$15B

This year holds the largest and most profitable record for the decentralized finance market, although there were also losses from hack. There are currently US$15.291 billion assets locked in DeFi, making another all-time high in the TVL. More than US$1.8 billion worth of assets were added since the past month. 

Also, the market is up by more than 2000 percent on the year-to-date (YTD) chart, as there was only US$691 million in assets locked around January this year.

The decentralized lending protocol, Maker, is ranked as the largest in terms of total assets locked. DeFi Pulse showed that US$2.69 billion in assets had been locked in Maker protocol, giving it a market dominance of 17.6 percent. The Bitcoin tokenization protocol, Wrapped Bitcoin (WBTC) holds the second-largest asset valuation at US$2.33 billion. WBTC is followed by Compound, Aave, Uniswap, etc., all of which has an asset valuation of around $1.7 billion. 

CeFi vs DeFi

The growth of the decentralized market was once a concern for many centralized players in the crypto industry, especially exchanges. The recent yield farming craze in DeFi had caused a massive outflow of coins like Ether (ETH) from crypto exchanges to DeFi protocols. Evidently, decentralized exchange Uniswap posted more trading volume than most popular CeFi trading platforms during these times.

However, CeFi exchanges are beginning to show support for DeFi by offering trading support for the native tokens from protocols and other related services.

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DeFi Ethereum

CEO of DeFi Insurer, Nexus Mutual, Loses US$ 8M In A Targeted Attack

An unknown attacker drained 370,000 NMX tokens from Hugh Karp, CEO and founder of the DeFi insurance firm Nexus Mutual. The amount stolen is equivalent to US$ 8M.

The firm announced the attack on Monday 14 UTC. The subject gained remote access to Karp’s personal computer and modified the Metamask extension, which facilitates web applications to communicate with the Ethereum blockchain.

Immediately, the attacker, who apparently is also a member of the firm, drained an amount equivalent to $8 million by implementing a different extension — tricking Karp into signing a different transaction, and sending the funds to the attacker’s address.

According to the investigations, the attacker is a member of the firm, and only Mutual members can receive NMX. But the firm hasn’t “completely identified” the subject. Although, weeks ago, the attacker completed a KYC (Know Your Customer) — a process that financial institutions do to verify their client’s identity.

The personal address from Hugh Karp, taken from Etherscam.io

The attacker has already converted some of the stolen 370,000 NMX tokens into 334ETH — which is equivalent to US$ 200,000.

Besides, according to data from Coinmarketcap, the price for the NMX token fell a considerable amount since the announcement was made, now at -18,40% by the time of writing.

NMX token chart, from coinmarketcap.
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Crypto News DeFi

Report: Non-financial Risks in Decentralized Finance Investors Should Know

Report: Non-financial Risks in Decentralized Finance Investors Should Know

The decentralized finance (DeFi) market is faced with other risks than investors losing their money due to price fluctuation. BNC Research, which focuses on digital currencies, revealed the non-financial threats in the DeFi market, showing just how the industry is still nascent. So, there’s an uphill battle for the industry to face before it becomes even safer for mainstream adoption. 

Meanwhile, it’s worth commending the developments so far in the decentralized finance industry. Since 2020, the industry has recorded more investors and protocol developments, which was fueled by the recent yield farming craze. At the time of writing, the total value locked (TVL) in the DeFi market had reached $14.1 billion, according to DeFi Pulse.

Other DeFi Risk Investors Should Know

Besides the common volatility issues with cryptocurrencies in general, BNC mentioned “scalability” as another risk investors should worry about in DeFi. Notably, Ethereum is the root network for DeFi, and scalability is one of the concerns with the current version. As Ethereum 2.0 – a more scalable version of the blockchain – is years away, BNC said that the network is likely to get congested as more people flock to DeFi.

Congestion of the network would cause higher transaction fees, as was seen during the rush in DeFi some months ago. Also, there are chances that many DeFi applications might be forced to shut down due to higher transaction fees. One other concern is smart contract vulnerabilities. In recent months, many new protocols were exploited by hackers due to bugs/flaws in the coding. It was estimated that tens of millions of dollars had been lost this year to hackers.

Another problem relates to price oracles used by DeFi protocols. There are times where these oracles provide outdated and inaccurate price updates. Bad actors can exploit this weakness, especially if the oracles post a price for an asset that is higher than the actual market value. BNC Research also mentioned poor design and coding as a problem, adding that these challenges and more, need to be addressed to prepare the room for DeFi mainstream adoption.

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Blockchain Cryptocurrencies DeFi

Aave Rehashed – Aave’s Upgraded v2 Protocol Is Here

A Finnish word for “Ghost”, Aave is a decentralized finance project that seeks to increase the transparency of decentralized finance, and improve its infrastructure.

Less than a year after the launch of the popular DeFi project, the second iteration of the Aave network is here.

After hitting a market cap of over $1 billion within 6 months, Aave has now hit a new milestone – namely, reaching a total volume of $1 billion in flash loans.

Stani Kuchelov – the founder and CEO of Aave – stated that the upgrades to the Aave network are a reflection of the company’s ethos.

“The Aave Protocol took major steps toward becoming more decentralized with the handover of the Admin Keys to the community. The Aave ethos is that finance should be as you like it, and with a working governance and “Aavenomics”, the future of the protocol is in your hands.”

Upgrades to Decentralized Finance

It’s safe to say the past few weeks have not been easy for companies specializing in decentralized finance (DeFi).

Between savvy coders making millions (and even returning some) and DeFi crypto storage “jars” being cloned and emptied right under everyone’s noses, DeFi companies have proven to be less stable than otherwise hoped.

With a little luck, however, Aave v2 may be able to solve some of the issues plaguing the budding industry.

Among the many improvements to the first iteration of the Aave network are upgrades to the notorious flash loan tool – including the option to carry them out in batches, native credit delegations, the optimization of gas prices.

In order to mitigate the growing gas price for transactions taking place on the Ethereum blockchain, Aave is introducing new ways to optimize gas prices, in some cases even cutting them by half.

Another interesting feature is the tokenization of debt. On this version of Aave’s blockchain, debt is tokenized, and borrowers will receive tokens representing their debt. This feature is mainly aimed at those who use cold wallets, as it will allow them to calculate their debt positions even when far away from the internet.

However, these are only a few of the updates brought to you by Aave. You can check out the full list on the official Medium blog of the company, complete with technical details.

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Crypto News Cryptocurrencies DeFi Ethereum

Visa Partners With Circle to Connect Its 60M Merchants With Ethereum-based US Dollar Coins

Visa is taking a step further from traditional payments and jumping in on two major cryptocurrency projects. The first one is the recent announcement of the integration of the US Dollar Coin, an Ethereum-based stablecoin created by Circle Internet Financial, into Visa’s fintech FastTrack Program.

Visa will work with Circle to integrate the Ethereum protocol to its customers — by issuing cards for USDC payments. Now more than 60M merchants can send and receive USDC whenever they want. Visa won’t take custody of the digital currency.

Visa integrates the Ethereum-based USDC as ETH upgrades to Eth2, making it a more efficient and faster blockchain protocol. The company believes that its 60M base customers can benefit greatly from this new upgrade. Now traders are hoping for a major bullish uptrend for the next week.

No More Cash Or Miles: It’s Bitcoin now

The second project is with BlockFi, a New York-based startup that specializes in cryptocurrency-backed loans and savings accounts. Visa is launching in early 2021 a credit card that rewards its users with Bitcoin — instead of traditional money or miles.

The new card is issued by Evolve Bank & Trust and has an annual fee of $200.

“We’re excited to add credit cards to our suite of products and expand Bitcoin’s accessibility to a broader set of consumers. This card makes it simple and risk-free for people to gain or increase exposure to a new asset class without changing their spending or investing habits.”

Zac Prince, CEO of BlockFi said in a statement.

Visa currently has 25 cryptocurrency wallets integrated into its system. And as Bitcoin and cryptocurrencies are becoming wildly popular every day, Visa expects to serve the cryptomarket customers with these two projects — by enhancing new payment methods and providing crypto-rewards.

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Australia Crypto News DeFi Hackers

Simon Green Warns About Escalating Cyberattacks Following The Australian Levitas Capital Hack

Simon Green, the CEO of Palo Alto Networks JAPAC, stated that cyberattacks are a major threat to the digital transformation of businesses in the Australian economy, as well as global. This year, hackers have stolen more than $ 100 million in DeFi projects alone.

In an online interview with Skynews Australia, Green Addressed the dangers of the escalating amount of cyberattacks, in several companies related to fintech and finance in general — especially following this last week’s attack on the Sydney-based hedge fund Levitas Capital.

As more Australian businesses are forced to go digital, the growth of cyberattacks is becoming a major concern. Green believes that during the pandemic, these attacks have increased.

A rapid increase in cyber threats has been seen, particularly during the pandemic. The environment has changed dramatically, particularly over the last nine months. People are now sitting in their homes and spending a lot of time on digital means. Whether it is in personal or business means, cyber threat is becoming an increasingly large problem.

Stated Green for Skynews Australia

Levitas Capital, Victim of a Hack Spree

A fake Zoom invite link shut down the Australian hedge fund Levitas Capital, and cost it almost US$ 8,7 million in losses after a hacker sent fake invoices on behalf of the firm Australian Catholic Super — their major client, to withdraw its funds.

Levitas Capital is the latest victim of a cybercrime spree that affected almost 2000 other Australian businesses with similar hacks this year. This prompted an ongoing investigation by the Federal Police called “Operation Dolos”.

Fintech and Finance Platforms Targeted by Hackers

A lot of money is flying into the world of Decentralized Finance (DeFi), and hackers are taking advantage of the weak points of DeFi projects, using scams like flash loans through Smart Contracts.

This way, hackers have stolen more than US$ 100 million from several DeFi platforms this year alone. The most recent one is Pickle Finance — the cybercriminals hacked its protocol for US$ 19,7 million worth in DAI Stablecoin — and cybersecurity incidents cost Australian businesses around US$ 29 billion each year.

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DeFi Hackers Industries

Pickle Finance Is The Latest DeFi Project To Be Beaten At Its Own Game

DeFi farming project Pickle Finance is the latest DeFi project to be hit hard by those who may share the same entrepreneurial spirit, if not the same methods.

Unlike the recent flashloan fiasco Value DeFi recently went through, the attack on Pickle Finance was a bona fide malicious attack, with none of the tongue-in-cheek humor. 

Value DeFi has since switched to Chainlink, arguing that their system provides better protection from exploits.

Evil Jar Swap

Pickle Finance’s modus operandi was based on providing automatic solutions for transactions between various DeFi protocols.

However, in order to maximize profits Pickle Finance required users to deposit funds in compound for trading purposes. 

This allowed the unknown bad actor to swap the funds between Pickle Finance’s cDAI jar and a copycat contract. The copycat contract had a similar interface to the legitimate one but was programmed to execute itself differently, allowing the bad actor to make a huge profit.

Confirmed 30 seconds later, the person behind the attack sent $20 million worth of funds from  Pickle’s cDAI jar to his own “evil jar”.

However, the DeFi company’s problems are not over, as their value has since plummeted by 58% within just a few hours – as proven by their current trending search on CoinGecko. The price has since slightly rebounded, making the loss of value closer to 52%.

Twitter users have been making light of the issue – with a user quipping that the new security audit will be to have proper insurance coverage, and others replying that they should start a security audit company for security audit companies.

Nevertheless, the past few weeks have seen several more DeFi projects, such as Akropolis, Harvest Finance, and Cheese Bank fall victim to bad actors. 

There is a silver lining to all the trouble, however: new and existing DeFi companies will now probably start beefing up their security, spurring decentralized finance down the path to becoming a huge competitor for traditional finance.

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DeFi

DeFi MarketCap Hits $10 Billion

A new report by Coin Metrics shows the DeFi MarketCap at around $10 Billion USD, climbing back up to it’s all time high of around $15 Billion.

Source: Coinmetrics.io

Although it may seem like it popped up overnight, DeFi has been around for years. During 2018 early projects like MakerDAO (MKR) and 0x (ZRX) pushed the total DeFi market cap to over $5B, as Ether (ETH) price reached all-time highs. But the initial DeFi surge was dwarfed by this summer’s run, which saw the rapid entry of many new projects.

Source: Coinmetrics.io

DeFi market cap peaked on September 18th shortly after the launch of Uniswap’s UNI governance token. 

Source: Coinmetrics.io

Similar to market cap, DeFi usage as measured by daily active addresses also peaked in September. Following the initial airdrop there were over 176K UNI active addresses on September 17th, by far the largest amount in DeFi history. But since then UNI daily active addresses have rapidly declined and leveled off at about 5K per day. 

In Conclusion

All these metrics seem quite bullish for DeFi moving forward and a possible 3rd wave.

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DeFi

DeFi represents a new shift in focus in the cryptocurrency market

Bitcoin is powered by the free market, a decentralized internet of value. There have been comparisons of bitcoin to major currency markets, placing BTC 6th in terms of market cap behind the USD, EUR, CNY, JPY, INR.

This is not dissimilar to previous comparisons to company sizes, in particular banks and mega corporations. This growth isn’t surprising given that bitcoin is more than a single currency or company, it is a shift to a web 3.0 payment system. The trend is toward DeFi.

What is DeFi?

The effectiveness and trustworthiness of Bitcoin has been proven time and time again with the rise of users across the world taking protection from the inflationary forces in the world. Bitcoin users feel reassured knowing the supply of bitcoin is capped and will forever be capped at 21m.

Additionally, competitors, including Ethereum 2.0, will introduce staking which is a novel way to secure the network. This innovation in the space is broadly comprises a movement moving away from centralized payment systems, and it’s called DeFi for decentralized finance.

Excitement about DeFi

Along with a series of structural changes to the code and incentives for Ethereum and others, DeFi creates opportunities for investors and users. Not only can users lend their funds and participate in pool lending to traders for Dai and other lending instruments, but they now also benefit from shifting payment rails for lower costs.

Source: Pixabay

Along with stable coins like Dai, and Defi crypto assets staking on Ethereum give high interest rates through lending functionality in Ethereum. Watch out for the response to the shift from Proof of Work to Proof of Stake in Ethereum 2.0 which will greatly increase the transactions Per Second. This will enable Ethereum to handle the transactions necessary to power the interactions in a future where DeFi is the norm.

DeFi means more autonomy, more independence, more control in the hands of everyday people, and it is the responsible for perhaps the most innovation within finance today.

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Crypto News DeFi Hackers

Hacker Steals 2$ Million From Akropolis Savings Pools

Akropolis (AKRO), the Crypto DeFi platform, recently tweeted on November 12 that their savings pools were hacked by the amount of 2$ million dollars worth in DAI, apparently, in a Flash Loan attack. 

According to Akropolis, the hack was executed “across a body of smart contracts” in the savings pools. The firm added that their staking pools are “safe” — and the hack only affected CurveY and Curve sUSD savings pools. 

In a statement, the firm noticed a “discrepancy in the APYs of our stablecoin pools”. Reports from the ETH blockchain show that the hackers were able to gather a total of $2,051,159 million in DAI. Later, the hacker sent the funds to a different address where they are currently held.

Now the entire Akropolis protocol is paused — its stablecoin pools remain suspended as the security team is currently working on several procedures in the affected areas. The firm informed major exchanges about the attack — and their security processes are under review as well.

Researcher Steven Zheng reported on Twitter about the hacker’s transaction. Zheng also stated that the hacker was executing batches of $50,000 attacks 7 hours later. 

Zheng, as well as many other crypto users, suggested that this hack was similar to the Harvest Finance project hack — a market price manipulation made with flash loans exploits. “This is not entirely true”, said Ana Andrianova, Akropolis founder, discarding Zheng’s suggestion about the attack being similar to Harvest Finance.

Harvest Finance was a DeFi project led by an anonymous team. The attack caused millions of dollars worth of FARM tokens stolen by hackers. As a result, its prices fell over 60% at press time.

While its users are now fearful about the future of their savings, the Akropolis team stated that “most funds are safe” and that they are exploring ways to refund the users affected by the hack. 

“We are exploring ways to reimburse users for the loss in a way that is sustainable for the project, and will make a proposal to the community prior to any final decision being made.” As a sideline, the firm stated one of the next steps is a post-mortem publication with their analysis as soon as possible.