Important events
Aug 242022
A non-fungible rugpull
Rugpulls are still in fashion with SudoRare reminding us that stealing other people’s tokens is like soooo on trend rn.- NFT platform SudoRare has vanished into thin air with a staggering ~$815k in user funds. The platform, which is a fork of LooksRare and SudoSwap, deleted its social media accounts yesterday and moved 519 ETH of user deposits off the platform and into wallets. Anyone who’s been on this ride before knows – that money’s never coming back.
- Twitter users had pointed out that the project looked fishy because of its anonymous founders and heavily marketed attractive staking opportunities. Some NFT platforms like Solana’s Magic Eden are cracking down on anonymity, requiring anyone wanting to mint an NFT to dox themselves before being able to use the service.
- DeFi hacking is causing users to flock to hardware wallets like those sold by French startup Ledger. The company’s sales went to the moon with a 400% increase in the hours after the $5m Solana wallet hack earlier this month, and the group’s Chief Experience Officer Ian Rogers said “these things remind people that security is important”.
Illustration by TradingView
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Aug 232022
Little hope for Hodlnaut
DeFi platform Hodlnaut is burning up as it falls through the atmosphere, with a new court document highlighting the company’s major financial shortcomings.- Troubled DeFi lender Hodlnaut has reported a $200m financial shortfall in a court affidavit which was leaked on Monday. The Singapore-based group filed for court protection on August 16th, seeking more time to source funds after freezing user-withdrawals on August 8th.
- The company’s already let go of 80% of its workforce in a last-ditch attempt to conserve some cash but its troubles are beginning to stack up. In the filing, Hodlnaut reported that on June 14 users suddenly attempted to withdraw a collective $150m amid widespread panic surrounding asset price-drops.
- Its financial woes can be linked to the wider crypto crash this summer where many lending platforms like Celsius and Voyager ran into massive liquidity issues. It's also not the only Singapore-based firm having major problems – crypto lender Vault reportedly owes over $400m to its creditors. Could be twice as bad then, I guess.
Illustration by TradingView
Aug 182022
The Genesis of a new CEO
Even the world’s largest crypto firms are still feeling the fallout of Terra/Luna, with crypto broker Genesis trying to mend its broken balance sheet by bringing on a new CEO.- The CEO of crypto broker Genesis has stepped down as the company feels the heat from the collapse of Terra and 3AC (Three Arrows Capital), with Michael Moro set to be replaced by the firm’s COO Derar Islim in the interim. In terms of brokers, it’s something of a titan in the space, facilitating over $17bn in spot volume trading over Q2 this year.
- It also announced plans to cut 20% of its 260 person workforce to reduce operational costs. The firm might be feeling the squeeze as it was the biggest creditor to 3AC, with the now-insolvent crypto VC fund reportedly owing Genesis $2.36bn. 3AC has also been struck with a $1.2bn claim from the parent company of Genesis, Digital Currency Group.
- The company was valued at $10bn once upon a time back in November 2021 but it seems v unlikely to be valued anywhere near that figure now. Since then, the value of the crypto industry has shrunk by more than 60% down to $1.09tn in the biggest sell-off in the history of the space – if the slump continues, we’re prolly going to continue seeing this kind of thing.
Relictum
Aug 112022
Bridges are getting burnt
The use of cross-chain bridges for crypto laundering is reaching new heights, and in light of the recent Tornado Cash ban – regulation could be brewing.- Crypto hackers have laundered at least $540m through RenBridge since 2020, according to new data from blockchain analysis group Elliptic. The group also said that around $153m of the laundered funds were related to ransomware exploits. It’s not painting a pretty picture for RenBridge.
- Cross-chain bridges like RenBridge make it difficult to trace funds and can offer a pretty easy way for cybercriminals to avoid getting caught. Elliptic said that they believe RenBridge was being frequently used by North Korean hacking groups and Russian cybercrime organizations.
- The US Treasury banned Americans from using crypto-mixer Tornado Cash earlier this week, and it’s v possible that similar regulation could be coming soon to cross-chain bridges like RenBridge – especially when OFAC catches wind of the amounts of money being laundered.
Sasha Matic / Unsplash
Aug 092022
Hodlnaut crashes down to earth
Another DeFi platform has fallen to the contagion as Hodlnaut becomes the latest crypto lender to freeze withdrawals.- DeFi lending platform Hodlnaut has frozen withdrawals citing “difficult market conditions”, as well as suspending their license application to the Monetary Authority of Singapore (MAS). Holdnaut reports that it has around $500m in assets under management, so there are likely a lot of unhappy customers right now.
- The platform says it has no exposure to 3AC or Celsius. What has been reported however, is that Hodlnaut had exposure to Terra’s UST in the region of $187m, which is v likely to be the source of these issues.
- These are dark days for crypto lending platforms as the full effects of Terra and Three Arrows Capital’s (3AC) collapse are felt throughout the industry. If the fates of Celsius and Voyager are anything to go off, it doesn’t look good for Hodlnaut users and it'll prolly be months before they can access their funds – if ever.
Dear users, we regret to inform you that we will be halting withdrawals, token swaps and deposits immediately due to recent market conditions. We have also withdrawn our MAS licence application. Here is our full statement https://hodlnaut.com/press/hodlnaut-message-to-our-users Our next update will be on 19 Aug.
Aug 082022
Putting the fun in non-fungible
An NFT collection that probably attracts a lot of sniggering 16 years-olds (among others) is helping NFT volumes hit promising levels as the crypto winter thaws.- Daily trading volume of ‘CryptoDickbutts’ NFTs soared by 690% over the weekend. The Ethereum-based collection listed on OpenSea is famed for its memorable artwork by comic book artist K.C Green and has attracted a slew of celebs like Steve Aoki and Blondish.
- The collection is now ranked as #34 by floor price – which has risen by 135% in the past week to a new all time high – the cheapest token in the collection is now selling for 3 ETH (around $5k at the time of writing), with CryptoDickbutts now ranking above a bunch of popular collections like CoolCats and Goblintown.
- The reason for the sudden price-pump is anyone’s guess, but some think a recent Twitter Spaces hosted by CSO of Coinshares and well-known Bitcoiner Meltem Demirors might have been the cause after Demirors described the collection as a “culture” and said that prices are irrelevant.
Illustration by TradingView
Aug 022022
Nomad funds wander off the bridge
Cross-chain token bridging protocol Nomad sees nearly all of its TVL drained in just a few hours in “one of the most chaotic hacks that Web3 has seen”.- The Nomad token bridge had over $190m pinched on Monday after experiencing a security exploit that let hackers systematically drain the bridge’s funds over a long series of transactions. DefiLlama says that $190.7m has been removed from the bridge and only a meager $651 remains.
- The platform says some of the hacking was friendly tho. Nomad’s team raised alarm bells after becoming aware of the first suspicious transaction, and has said that some of the moola was taken out by “white hat friends” who planned to safeguard the funds from the malicious attack and then return them – so far, one such friend has come forward.
- It’s the latest in a string of v public attacks that have brought into question the safety of cross-chain bridges in the cryptosphere. It comes at a rather inopportune time for Nomad, which only in April participated in a seed round that valued the company at $225m – largely based on the vision that it was fundamentally more secure than other platforms.
2/ It all started when
@officer_cia
shared
@spreekaway
's tweet in the ETHSecurity Telegram channel. Although I had no idea what was going on at the time, just the sheer volume of assets leaving the bridge was clearly a bad sign
Jul 052022
Someone call in the Kingsmen
The British Army may need some help from Harry Hart after a hacker compromised their socials to push a new crypto scam. Don’t they know that manners maketh man?- The British Army’s social media accounts have been infiltrated. An anonymous hacker (or group of hackers) took control of the UK army’s Twitter and YouTube accounts, pushing fake crypto giveaways and digital collections and sending people to scam websites.
- The Twitter account’s name and profile pic were changed to promote a fake NFT collection and even tweeted “we are attacking Pakistan” at one point, while the YouTube account name was changed to “Ark Invest” and went so far as to live streamed old clips of Elon Musk and Jack Dorsey talking with added text directing people to a scam website.
- High profile Twitter accounts are like catnip to hackers, – in 2020, the accounts of Elon Musk, Biden, Bezos and others were hacked to swindle people out of Bitcoin. Scams across the industry are getting more frequent, with the FTC revealing over 46k people have reported losing over $1bn to crypto scams since the start of 2021.
Artiom Vallat / Unsplash
Jun 302022
Three Arrows Capital falls
So long, Three Arrows – the crypto hedge fund is set for liquidation after failing to make loan payments.- Three Arrows Capital (3AC) was ordered to liquidate through a court order given in the British Virgin Islands on Wednesday, making it the first major crypto firm to fall amidst fears of a contagion spreading through DeFi.
- The news won’t come as a surprise to many. Earlier this week, Three Arrows had defaulted on a $670m loan given to them by Voyager Digital, raising fears of the hedge fund’s insolvency. The descent into liquidation arguably started due to 3AC’s exposure to Terra, in which the firm lost $200m and co-founder Kyle Davies admitted it “caught very much off guard”.
- Can DeFi get through this? Other crypto firms like Celsius, CoinFlex, and Babel Finance have all halted withdrawals on their platforms in the last few weeks as they wait to gather enough capital to steady their ships again. Investors will be hoping this isn’t crypto’s Bear Stearns moment and that no more companies suffer the same fate.
Mattes / Wikimedia Commons
May 162022
Apes go for cheap in a bear market
Turns out when the market bleeds, so do NFTs – volume and floor prices of collectables are down, down, down.- For NFTs, BAYC’s Otherside metaverse launch was the blow-off top. Back then (only April tbf), some Bored Apes cost north of $400k. Now, volume is down 75% in the last week for Otherside NFTs, while the average floor price has dropped to 101 ETH ($200k) from 160 ETH ($480k at the time) at the end of April.
- For a while, peeps thought NFTs had decoupled from the crypto market. In January, OpenSea saw a record $4bn in Ethereum-based NFT sales despite Bitcoin and the wider market dropping heavily. Now, the sea of red has rocked up on collectables’ shores.
- Cryptocurrency seems to be playing a game of dominos rn. Bitcoin reacts to moves made by the Fed and the Nasdaq, altcoins follow Bitcoin, and NFTs follow their altcoin hosts. This was always gonna happen – as institutions have got more involved, the web of the crypto world has widened and become entangled in the Big Dog Economy.
Thomas Bonometti / Unsplash
May 092022
Hackattack
Whether it’s a bullish or bearish market, DeFi remains a place where looting is commonplace.- NFT titan OpenSea is the latest victim of a DeFi attack. Its discord server was hacked on Friday, and OpenSea fans were sent to a phishing website where scammers tried to trick ‘em into giving away their NFTs through a fake-minting opportunity. Only $20k was lost, which is peanuts for DeFi, but still – nobody wants to see it.
- Meanwhile, MM.Finance, the biggest DEX on Cronos, was looted of $2m due to an attack that targeted a DNS vulnerability. Hackers got hold of the website and deployed their own contract address on the frontend, leading to users sending off their funds straight into the hackers’ hands without knowing any better.
- The total market cap of DeFi dropped beneath $100bn on Monday morning after a 12% slump saw the space return to its August 2021 levels. It comes as DeFi-based crypto will be getting dumped on exchanges to hedge off risk from Bitcoin, which fell under $34k over the weekend to give investors a big ol’ fright.
愚木混株 cdd20 / Unsplash
May 032022
DEXs show their muscle
Despite being plagued by countless hacks, the DeFi sector showed strength in Q1 2022, with Ethereum’s ecosystem alone growing 964%.- DeFi has become synonymous with hacks and exploits of late, but the latest report to come out Bankless last week paints a prettier picture of the sector. The total value locked (TVL) of dApps on Ethereum rose a mega 964%, up to $7.3bn from the $686m in Q1 2021.
- Decentralized exchanges (DEXs) have also had a crazy year. Volume traded for spot assets like Bitcoin rose 667% to around $3.9tn, while futures trading increased 2704% to $2tn. Yup. We did say crazy.
- Growth may continue as competition rises in DeFi. Projects like Cardano, Avalanche, Binance, and Terra are aiming to offer scalable alternatives to Ethereum’s high gas fees and transaction speeds. Just this weekend, ETH burnt over $100m in fees for peeps minting Bored Ape NFTs on the network.
Michael Förtsch Unsplash
Apr 182022
Every hack a De-Fi hack
Apparently, decentralized finance means re-incentivized crime right now – a recent report highlighting that a staggering $1.3bn has been swiped in Q1 2022 alone.- 97% of all stolen crypto came from De-Fi platforms. The Chainalysis report identifies private key hacks as being behind the majority of breaches. This includes the recent March 2022 Ronin hack, which saw over $625m in crypto pinched in a single attack.
- Two years ago De-Fi platforms represented just 30% of all hacks, which shot up to 72% in 2021. Exploits of pricing oracles and faulty code may be prime vulnerabilities, but 35% of all cryptocurrency lost since 2020 has still been down to simple security breaches.
- The temptation looks set to only continue. An estimated $256bn is currently locked into De-Fi projects as of November 2021. This comes as Ethereum gears up for its 2.0 upgrade, with $10bn staked on the platform that supports leading De-Fi projects such as UniSwap, MakerDAO, and Aave. So, let’s hope that next deployment goes smoothly, Vitalik.
Shubham Dhage / Unsplash