Reports of abnormal behavior on Velvet Capital’s trading platform surfaced on April 23. Upon attempting to connect to the website, users encountered prompts to authorize wallet access. 

Suspicious Activity on Velvet Capital Triggers Phishing Attack Concerns

Recognizing the potential threat, Velvet Capital swiftly initiated internal investigations and issued a cybersecurity alert advising investors to refrain from approving wallet connection requests until further notice.

Founder Vasily Nikonov took decisive action to safeguard investor funds, announcing the temporary closure of the Velvet Capital website on Telegram. 

“ATTN, don’t interact with the Velvet website; we’re closing it for maintenance and investigating the issue, We will issue a post-mortem once the issue is solved.”

Concerned about the security of user assets, Nikonov urged investors to interact with the platform only after maintenance and security measures had been completed. The move aimed to minimize potential user losses and prevent cybercriminals from accessing investor funds.

Ongoing Efforts to Resolve the Situation

Almost two hours after the website was offline, Nikonov reassured users that efforts were underway to regain control of the platform and address the security breach.

ATTN: Some of the users experienced an issue while connecting to the app today, please don't interact with Velvet front-end, we're closing it for maintenance & investigating the issue.

We will share a post-mortem once the issue is solved.

— Velvet.Capital (@Velvet_Capital) April 23, 2024

He emphasized collaboration with technical experts and security researchers to identify and rectify vulnerabilities exploited by hackers.

“Rest assured that the smart contracts are not impacted and funds on Velvet are not affected, we’re investigating the front-end issue that some of the users faced this morning and will share the results asap”, he said.

Blockchain investigation firms Blockaid and Scam Sniffer corroborated Velvet Capital’s acknowledgment of the website hack. Users who may have unwittingly approved fraudulent transactions during the incident were urged to report the details to Velvet Capital for remediation. 

Despite the disruption, no users had reported financial losses as of the latest update.

Over $200 Million Has Been Lost To Hacks And Rug Pulls In 2024 Alone.

In the first two months of 2024, the Web3 space has been rocked by over $200 million in losses due to hacks and rug pulls, according to a report by Immunefi, a blockchain cybersecurity platform safeguarding assets exceeding $60 billion. 

This staggering sum reflects a significant uptick in incidents compared to the same period in 2023, witnessing a 15.4% increase from $173 Million to over $200 Million across 32 specific incidents.

In February alone, Web3 users suffered losses of over $67 Million across 12 specific incidents, a notable decrease from January’s figures of over $133 Million. 

Hacks continued to dominate as a significant security concern, accounting for 97.54% of the total losses in February, while fraud constituted a mere 2.46%.

Jonah Michaels, Communications Lead at Immunefi, emphasized the alarming trend of private key and wallet compromises contributing to nearly 30% of the total losses year-to-date. Michaels also warned of potentially record-breaking losses in 2024, anticipating a continuation of the rising trend observed since the previous year.

The post Velvet Capital, Backed by Binance Labs, Temporarily Offline Due to Phishing Attack Risk appeared first on Cryptonews.

dYdX has confirmed the outage on its mainnet and noted that ecosystem engineers are currently debugging the issue. According to an incident report, the outage has been ongoing since 6:50 a.m. UTC, and no fix is expected for several hours.

Major Outage Hits dYdX Chain Following Scheduled Protocol Upgrade

Update on the dYdX Chain Protocol v4.0 Software Upgrade.

The upgrade is now expected to happen between 7:00-8:00 AM (UTC)

Monitor the targeted block height page since time may vary.

Block Height: https://t.co/RwNnjsVFRS https://t.co/KS8uEm0YZW

— dYdX Ops subDAO (@dydx_ops_subdao) April 7, 2024

On April 8, at 5:30 am UTC, dYdX issued a status report informing users about the ongoing scheduled protocol upgrade and cautioning about potential disruptions in dYdX Chain functionalities.

Update #2

The dYdX Chain is halted due to the v4.0.0 software upgrade, the issue is currently being investigated.

We are hoping to get it sorted in the next few hours.

We'll keep you updated, thank you for your patience https://t.co/6oUGHHyhXx

— dYdX Ops subDAO (@dydx_ops_subdao) April 8, 2024

Despite the completion of the scheduled maintenance, block production on the chain failed to resume. 

As of the latest update, blockchain explorer platform Nodes Guru indicates that the dYdX mainnet has not produced any new blocks since the time of the scheduled upgrade, which occurred five hours prior.

The dYdX Chain is halted due to the v4.0.0 software upgrade, the issue is currently being investigated

You can view the dYdX Chain status page. https://t.co/eBh7NCZ2rR https://t.co/dQqbOHROku

— dYdX (@dYdX) April 8, 2024

The investigation is ongoing, with the team indicating that a resolution may not be reached until later. dYdX mentioned convening with validators around 3 pm UTC to discuss potential solutions without risking validator penalization for being offline during the chain restart.

“The issue continues to be investigated. It’s been agreed to reconvene with the validators around 15:00 UTC. This means that the devs won’t suggest a workaround or a fix until then so that the validators won’t get jailed for not being online when the chain restarts. When a validator is “jailed,” it means it’s been temporarily suspended from participating in the network activities.”

The incident represents the first major outage for the protocol since dYdX version 4 and its standalone Cosmos blockchain launched on the mainnet in October, according to its status page. 

dYdX Chain Faces Setback Amid Planned Protocol Upgrade

Initially suggested on February 21, the proposed protocol upgrade sought to introduce several advancements, including order book features, risk and safety improvements, and enhancements related to Cosmos integration.

dYdX launched its dYdX Chain in October 2023, enabling DYDX token holders to transfer funds from the Ethereum network to the new platform, expanding its utility. Data from DefiLlama shows dYdX total value locked on-chain at $509.71 million at the time of writing. The network generated over $48.59 million in fees over the past twelve months.

The project unveiled its decision to migrate from Ethereum in early 2022, citing concerns over the network’s scalability issues. The incident does not appear to have impacted the price of dYdX’s token, which is up over 4% during the past 24 hours, according to CoinMarketCap.

On April 6, the dYdX community voted to authorize the staking of $61 million in treasury tokens on the liquid staking protocol known as Stride. This move comes in response to the increasing trading activity within the protocol, as highlighted by dYdX.

The post dYdX Investigates Block Production Halt During Scheduled Upgrade appeared first on Cryptonews.

Reinstating borrowing capabilities on Prisma hinges upon achieving consensus through an ongoing community vote.

Prisma Finance Exploited for $10 Million: Recovery Efforts and Governance Response

On March 28, the decentralized finance (DeFi) protocol Prisma Finance was exploited to steal around $10 million worth of cryptocurrencies. The exploit at Prisma Finance was executed through a flaw in the migration zap contract, leading to a loss of approximately $11.6 million.

This contract was intended to manage transitions between trove managers but was manipulated to extract assets, including wrapped-staked Ethereum (wstETH). The stolen assets were swiftly converted to Ethereum (ETH), complicating efforts to track and recover the funds.

The protocol claimed that the core functionality of Prisma Finance remained unaffected. The issue was confined to a specific component, the migration zap contract, thereby not compromising the protocol.

New Snapshot Vote: [PIP-036]

As we progress towards unpausing Prisma, the next step involves this Snapshot vote. This will bring us closer to re-enabling the ability for our users to deposit LSTs & LRTs and borrow our overcollateralized stablecoins.

Your participation is… pic.twitter.com/pG81WpFVN3

— Prisma Finance (@PrismaFi) April 4, 2024

Prisma Finance enacted an emergency pause on all trove managers in response to the breach. This action has halted all borrowing activities and prevented new liquidity from being introduced into the protocol, aiming to stabilize the situation. However, the Prisma Finance DAO subsequently launched a four-day governance vote the next day, which will end on April 7.

As of the latest update, the proposal to resume borrowing activities on Prisma has garnered unanimous support, with a 100% “Yes” vote from participating DAO members, indicating robust community backing. However, the final decision will be determined after the voting deadline.

Users are strongly advised to revoke delegate approvals for open positions, as the protocol’s unpause may carry the risk of fund loss. Previously, the protocol had identified 14 accounts that had yet to revoke the affected smart contract, potentially exposing them to a combined loss of $540,000.

Plans to Resume Borrowing Activities After Exploit

On April 3, core contributor Frank Olson presented a plan to “safely” unpause the Prisma protocol, thereby reinstating functionalities such as the ability for users to deposit liquid staking tokens (LSTs) and liquid restaking tokens (LRTs) and borrow overcollateralized stablecoins.

Olson addresses the significance of unpausing the protocol, stating that the action is pivotal for the recovery process and reinstating normal operations, including complete Vault management and deposits into the Stability Pool. He also highlighted Prisma’s ongoing commitment to enhancing security measures, including engaging in continuous auditing services, bug bounty programs, and overall security enhancements.

Notably, according to the forum post by Frank, Prisma Finance has outlined its immediate response and forthcoming steps following the hack.

To address the exploit, Prisma Finance has proposed several key measures. Firstly, there will be a significant reduction in protocol-owned liquidity (POL) by decreasing the weekly POL amount from $40,000 to $0. Additionally, the distribution to stakeholders will be impacted, with the weekly amount allocated to vePRISMA holders halved from $160,000 to $80,000.

Frank highlighted that these proposed changes are not intended to be permanent but are deemed necessary now. He stated,

“As new information comes in about this situation, we will also commit to revisiting these parameter changes 1 week after passage.”

The post Prisma Finance Gains Strong Community Support for Protocol Restart with DAO Approval appeared first on Cryptonews.

Cronje, a notable figure in DeFi, cautioned about potential risks associated with incentives linked to the synthetic dollar, comparing it to past market meltdowns like the Terra-Luna incident. 

Andre Cronje Sounds Alarm on DeFi Risk Management, Hinting at Synthetic Dollar Protocol

Every so often we see something new in this space. I often find myself on the mid curve for an extensive amount of time. I am comfortable here. That being said, there have been events in this industry I wish I was more curious about, there have also been events I definitely did…

— Andre Cronje (@AndreCronjeTech) April 3, 2024

In an April 3 tweet, Cronje questioned the assumption that simply closing positions when markets turn negative is a viable risk management strategy, likening it to a meme due to its practical challenges. He warned about the risks associated with relying on positive funding rates during positive market conditions, as this can quickly turn negative, leading to liquidations and potentially “unbacked assets.”

Cronje also referenced the “law of large numbers” as a potential countermeasure, similar to strategies seen in other protocols like UST’s $1 billion BTC fund. However, he cautioned that such strategies may work until they don’t, implying potential vulnerabilities in risk management practices.

His tweet raised questions about the sustainability of high yields offered by Ethena’s synthetic dollar, USDe, particularly noting concerns that excessive optimism in positive market conditions could lead to unbacked assets and liquidations when market sentiment shifts negatively.

The initial launch of Ethena’s synthetic dollar on the public mainnet with a high annual percentage yield (APY) drew widespread attention. It raised concerns similar to those seen with the collapse of Terra UST’s Anchor protocol in the past, highlighting the importance of robust risk.

Ethena Builds Synthetic Dollar Using ETH-Based Decentralized Protocol and Crypto Collateral

Ethena Labs USDe is a synthetic dollar positioned on a decentralized protocol based on ETH. The stablecoin utilizes crypto-native collateral, such as staked Ethereum, and hedges price exposure in derivative markets on centralized and decentralized exchanges. This strategy results in a tokenized dollar, termed a synthetic dollar, where the price exposure is netted out.

In an exclusive interview with cryptonews.com, Conor Ryder, Head of Research at Ethena, discussed various aspects of stablecoins and synthetic dollars. Ryder touched upon the stablecoin trilemma, distinguishing between ‘stablecoins’ and ‘synthetic dollars,’ and highlighted the different use cases for stablecoins.

Ryder began by addressing the stablecoin trilemma, which revolves around achieving stability, decentralization, and scalability simultaneously. He mentioned past instances where projects sacrificed stability for scalability and decentralization, citing examples like TERA. Ryder emphasized the importance of a robust peg mechanism and adequate collateralization to maintain stability.

Regarding censorship resistance, Ryder discussed centralized stablecoins like USDC and USDT, noting that while they are stable, their collateral is not censorship-resistant due to being backed by US government bonds. This lack of censorship resistance contrasts with the stability they offer, making them a dominant force in the market.

Ryder then delved into the scalability aspect, highlighting challenges faced by DeFi stablecoins in achieving scalability while maintaining stability and decentralization. He pointed out that over-collateralization, common in crypto-backed stablecoins, limits scalability compared to centralized stablecoins.

Regarding Ethena’s approach, Ryder mentioned using crypto-native collateral (Stealth) to achieve censorship-resistant collateral. He said,

“And I guess to circle back to Ethena, hopefully then we’ve kind of touched on each of those points is we have censorship-resistant collateral, i.e., Stealth, that’s the crypto-native collateral. We hopefully are scalable because as, so this is probably the most intricate part, but as I said, with the derivative position, you basically need to match what for every $1 Stealth you have, you need to have a $1 short for the perpetual position to hedge that off. So that means you actually only need to take a one-to-one collateral ratio as well. So we’re actually kind of as scalable as centralized stablecoins.”

The post Fantom Creator Warns of Potential Crypto Meltdown Due to Risky Incentives appeared first on Cryptonews.

According to a community forum post by MonetSupply from Block Analitica, a risk intelligence firm for decentralized finance (DeFi), the proposed investment seeks to leverage the DeFi lending protocol Morpho Labs.

Not a joke: @MakerDAO considering allocating up to $600m DAI into sUSDe and USDe via @MorphoLabs with possibility to go up to $1 billion

Ethena TVL growth is on track with internal expectationshttps://t.co/kKEhPoDwQm pic.twitter.com/F1QP1xPBFW

— Seraphim (@MacroMate8) April 1, 2024

The allocation aims to capitalize on the advanced lending capabilities of Morpho Labs, aligning with MakerDAO’s investment diversification goals and its commitment to fostering a more robust and resilient DeFi ecosystem through targeted support of Ethena Labs’ stablecoins.

MakerDAO’s Reasons to Invest in USDe and sUSDe

The post suggested that the users indicated a preference for certain types of financial products and leverages within the DeFi space. “Users showed a strong preference for USDe over sUSDe pools, and also showed a preference for higher over lower leverage,” said MonetSupply.

The proposal also breaks down the financial and strategic benefits of the allocation, saying, “There will still be significant incentives for using USDe and sUSDe collateral on Morpho.”

Allocating to USDe would also reduce liquidity risk through immediate redemption and boosts Ethena’s insurance fund revenue, enhancing MakerDAO’s investment security over time.

As the DeFi landscape evolves, MonetSupply argued that Ethena’s position and future development, including the revised points program (‘sats’ program), would “continue to favor USDe over sUSDe.”

Finally, the proposal emphasized the broader implications of the investment for the DeFi ecosystem, stating, “Allocation to USDe also allows Ethena to retain a greater share of revenue for their insurance fund, which over time can improve the risk profile of Maker’s Ethena allocation.”

Initial $600 Million Allocation with $1 Billion Cap

The proposed initial recommendation set MakerDAO’s USDe exposure limit at $600 million, a figure that may increase as Ethena’s platform grows.

The post advocated that the investment should not only cover MakerDAO’s operational costs and projected losses from USDe but also stay within a secure investment limit of up to $800 million to protect against substantial losses and ensure financial stability.

“We recommend limiting allocations to a maximum of 600 million DAI total for the time being,” said the analyst.

“However, we recommend setting the DDM line parameter to 1 billion DAI, to reduce the amount of governance overhead required to increase exposure in the future if relevant constraints change,” MonetSupply concluded.

The post MakerDAO Considers $600 Million DAI Allocation into USDe and sUSDe appeared first on Cryptonews.

PeckShield reported that the majority of the recovered funds stemmed from the Munchables incident, where the hacker returned the stolen cryptocurrency following negotiations.

PeckShield Report: Crypto Hacks Decline in March, Yet Still Exceed January Figures

#PeckShieldAlert March 2024 witnessed 30+ hacks in the crypto space, resulting in ~$187.29 million in losses, with ~$98.8 million recovered.
This marks a decrease of ~48% from February 2024.#Top5 hacks:#Munchables (#Juice affected): $97 million (recovered)#CurioNetwork: $40… pic.twitter.com/u3zejt9Ygn

— PeckShieldAlert (@PeckShieldAlert) April 1, 2024

According to a report by web3 cybersecurity firm PeckShield on April 1, the market saw over 30 hacks in the crypto space, resulting in $187.29 million in losses, with $98.8 million recovered. This figure marked a decrease of 48% from February, when hackers stole over $360 million.

Despite declining losses compared to February, March’s figures still exceeded those of January, during which the market encountered $182.5 million in losses.

PeckShield also highlighted the top five incidents during the month. Among the top five incidents highlighted, the Munchables hack ranked as the most significant in terms of losses, followed by the Curio hack, the Prisma Finance breach, the NFPrompt hack, and the WOOFi exploit.

According to the report, most of the recovered funds were from the Munchables incident, a non-fungible token game on the Blast network. On March 26, the project disclosed that it had been exploited, with initial losses estimated at $62 million. However, the hacker later returned the funds without any ransom demands.

On March 27, Munchables identified the hacker as one of its developers. Ultimately, Blast core contributors announced that $97 million in crypto stolen from the incident had been secured.

In a similar version, the Prisma Finance incident, involving approximately $11 million in stolen digital assets, might also see a chance of recovery. Following the hack on March 28, the decentralized finance protocol froze its platform for investigation. The hacker later claimed the incident was a “white hat rescue,” and negotiations between the protocol and the hacker are underway.

On March 24, Curio’s MakerDAO-based smart contract on Ethereum was breached. While initial estimated losses were $16 million, PeckShield suggests it may be closer to $40 million in stolen crypto funds, making it the second-largest loss incident last month.

The fifth-largest incident for the month came from the Binance-backed platform NFPrompt, which experienced unauthorized access, resulting in about $10 million in losses, while the WooFi decentralized exchange suffered losses of approximately $8.5 million.

Q1 2024: Crypto Hacks and Fraudulent Activities Decline, Total Losses Reach $336.3 Million.

In the first quarter of 2024, the total amount lost to hacking and fraudulent activities reached approximately $336.3 million, a decrease from $437.5 million in 2023. The report outlines 46 hacking incidents and 15 cases of fraudulent activities during this time.

Two projects suffered significant losses, amounting to $144.5 million, making up 43% of the overall loss. The most significant attack, totaling $81.7 million, targeted the cross-chain bridge protocol Orbit Bridge on New Year’s Eve.

January witnessed the highest monthly losses in Q1, totaling $133 million. The second-largest attack of the quarter involved a $62 million exploit on Munchables. Overall, $73.9 million (22%) of the stolen funds from seven exploits in Q1 were successfully retrieved. The number of attacks decreased by 17.6%, from 74 in Q1 2023 to 61 in 2024.

Hacking incidents also dominated the losses, accounting for 95.6% ($321.6 million) across 46 incidents, while fraudulent activities, scams, and rug pulls made up 4.4% ($14.7 million) in 15 incidents.

Notably, Ethereum was the most targeted blockchain, followed by the BNB Chain, with both networks accounting for 73% of the total losses. Ethereum experienced the highest number of attacks, with 33 incidents constituting 51% of the total losses.

On the other hand, BNB Chain encountered 12 attacks, representing 22% of the exploited funds. Additional incidents occurred on Arbitrum, Solana, Optimism, Bitcoin, Blast, Polygon, Conflux Network, and Base.

The post $336.3 Million In Crypto Funds Stolen In Q1, $98.8 Million Recovered from March Hacks: PeckShield appeared first on Cryptonews.

According to a forum post by core contributor “Frank,” the decentralized finance (DeFi) protocol Prisma Finance has outlined its immediate response and forthcoming steps following the hack. Frank stated that $540,000 of the exploited fund is still vulnerable.

“Of the affected Troves several have revoked the contract containing the vulnerability with ~$540k of collateral still at risk at the time of writing,” said Frank.

A path forward after the security incident: https://t.co/JLVHfXvNn4

— Prisma Finance (@PrismaFi) March 31, 2024

Prisma Finance’s Proposal

In response to the exploit, one key aspect of the strategy involves a significant reduction in protocol owned liquidity (POL), by reducing the weekly POL amount from $40k to $0.

Another measure targets the distribution to stakeholders. Frank explained the decision to halve the weekly amount allocated to vePRISMA holders. “Reduce the weekly amount distributed to vePRISMA holders by half, from $160k to $80k,” he noted.

These proposed changes, according to Frank, are not permanent but pivotal for the moment. “As new information comes in about this situation, we will also commit to revisiting these parameter changes 1 week after passage,” he said.

$11.6 Million Hack Involving FixedFloat Exchange

The exploit at Prisma Finance was executed through a flaw in the migration zap contract, leading to a loss of approximately $11.6 million.

This contract was intended for managing transitions between trove managers but was manipulated to extract assets, including wrapped staked Ethereum (wstETH). The stolen assets were swiftly converted to Ethereum (ETH), complicating efforts to track and recover the funds.

The post claimed that the core functionality of Prisma Finance remains unaffected. The issue was confined to a specific component, the migration zap contract, thereby not compromising the entire protocol.

In response to the breach, Prisma Finance enacted an emergency pause on all trove managers. This action has halted all borrowing activities and has prevented any new liquidity from being introduced into the protocol, aiming to stabilize the situation.

The post Prisma Finance Works Toward Exploit Recovery, $540K Vulnerable appeared first on Cryptonews.

The protocol team has acknowledged the breach, and their engineers have already halted the DeFi protocol to investigate the attack.

Prisma Finance Hit by $11 Million Exploit, Security Firms Confirm

UPDATEOur system has detected multiple suspicious transactions with @PrismaFi and still ongoing!

Total loss so far is around $9M. Attacker has funded by @FixedFloat!

Our system has detected the malicious contract 2 min earlier than hack transactions!

Our system would… https://t.co/9myoV8DL22 pic.twitter.com/SxT5yYZy7U

— Cyvers Alerts (@CyversAlerts) March 28, 2024

According to Cyvers, a Web3 cybersecurity firm that was the first to detect suspicious transactions involving Prisma Finance, the attacker, allegedly funded by FixedFloat, executed multiple transactions resulting in the theft of 1,965.39 wrapped staked Ethereum (wstETH), initially valued at around $9 million.

Blockchain security firm PeckShield confirmed the attack, indicating that Prisma mkUSD and wrapped stETH were among the stolen assets.

Hi @PrismaFi, you may want to a look (w/ $8.1m) pic.twitter.com/VQ8tnv6dYW

— PeckShield Inc. (@peckshield) March 28, 2024

Subsequently, the attackers converted these assets to Ethereum (ETH), indicating a calculated and targeted approach to exploiting vulnerabilities in the platform.

Following the initial alert, PeckShield, in another alert on X, stated that an additional $1 million in fraudulent transactions was detected, bringing the total stolen funds close to $11 million, “the attack is ongoing, with the total loss now increased to ~3,257.7 ETH (worth ~$11.6 million).”

#PeckShieldAlert The attack is ongoing, with the total loss now increased to ~3,257.7 $ETH (worth ~$11.6 million)
To vault owners, please follow up on notifications from the official source and be cautious about scams pic.twitter.com/5HYGYCROIP

— PeckShieldAlert (@PeckShieldAlert) March 28, 2024

PeckShield urged vault owners to stay vigilant and follow official notifications to avoid scams. They also warned of other scammers attempting to exploit the situation, noting the presence of a fraudulent Prisma Finance account with a golden badge trying to mislead users with a suspicious link.

Prisma Finance Responds to Possible Exploit as DeFi Sector Continues to Face Challenges

We are aware of a possible exploit on Prisma.

Core engineering contributors will pause the protocol and investigate.

We'll share an update and a post-mortem.

— Prisma Finance (@PrismaFi) March 28, 2024

In response, Prisma Finance engaged with its followers on X to provide an update on the situation. Prisma Finance stated that its core engineers and contributors would pause the protocol to conduct a thorough investigation. Moreover, Prisma urged its users to revoke all connections to prevent the loss of funds.

Due to the recent exploit, Prisma urges all users to revoke all connections to prevent loss of funds

All users who connected their wallets to the platform are at risk of future fund loss.

Check exposure to the exploit and revoke now

Revoke Now https://t.co/KdL81iGL1M

— Prisma Finance (@ernanaa) March 28, 2024

Notably, Prisma Finance is a decentralized liquid staking token protocol with a total value locked (TVL) of over $222 million, as reported by DefiLlama.

According to a Web3 bug bounty and security services platform Immunefi report, the crypto industry has clocked up $336.3 million in losses due to hacks and scams during the first quarter.

According to Immunefi, DeFi platforms, which account for nearly $100 billion of total value locked in web3 protocols, remain prime targets for hackers. Notably, all exploits identified by Immunefi in Q1 targeted DeFi, while centralized (CeFi) platforms experienced zero exploits during the same period.

Despite the significant losses, $73.9 million (22%) of the stolen funds were successfully recovered from seven exploits. Additionally, attacks decreased by 17.6%, from 74 in Q1 2023 to 61 in Q1 this year.

While the $336.3 million in losses represents a substantial figure, it marks a notable 23.1% decrease compared to losses of $437.5 million reported in the same quarter last year.

The post Prisma Finance Suffers $11 Million Hack Involving FixedFloat Exchange appeared first on Cryptonews.

According to reports on the OKX Telegram, affected users have experienced a range of issues, from accounts displaying zero balances to others showing balances skyrocketing into the tens of millions.

The widespread nature of the OKX API glitch has caused major frustration among traders, who have reported losses due to their inability to access or close positions.

OKX Acknowledges Rest API Issues and Reassures Users

In response to the numerous user complaints, OKX has acknowledged the issues with their Rest API, which facilitates connections to external services through standard HTTP requests.

We are aware some users have reported intermittent issues with our Rest API.

Our Websocket is functioning correctly and our app and website are not affected.

We are looking at the issue and we apologize for any inconvenience caused.

— OKX (@okx) March 27, 2024

The Rest API experienced a crash during this time, leading to errors, incorrect data, and failures when attempting to execute trades.

OKX has reassured users that their engineering team is actively working to resolve the API glitch and has emphasized the safety of user assets throughout the incident.

The exchange has also stated that their WebSocket, app, and website remain unaffected by the glitch.

Despite these assurances, the OKX API glitch has had repercussions on the exchange’s native token, OKB, causing a 2.21% decline in its value to $64.59 as of writing.

Recent Developments and Glitches in the Crypto Space

Prior to the current OKX API glitch, the exchange had recently integrated Uniswap Labs’ application programming interface (API) into its decentralized exchange (DEX) to allow gas-free trading through a feature called “Snap.”

We're introducing Snap mode, an interoperable OKX DEX feature powered by UniswapX

Pricing optimization
MEV protection
Gas-free swapping
0⃣ No charge for failed txs

Explore how we elevate your trading game with enhanced access to DeFi: https://t.co/PBo0FYxwub pic.twitter.com/gnLCdmau34

— OKX (@okx) February 29, 2024

This feature was intended to simplify decentralized token swapping and provide a direct connection with Uniswap, granting the OKX DEX access to the UniswapX protocol and its liquidity.

However, the OKX API glitch is not an isolated incident in the crypto space. In recent weeks, platforms such as Coinbase and Solana have also been affected by outages and glitches.

Solana experienced a nearly 5-hour outage in early February, wherein block production abruptly ceased. The issue was traced back to an infinite recompile loop triggered by a legacy loader program within the JIT cache, necessitating a network upgrade and restart by validator operators.

This is absolutely insane:

The Coinbase, $COIN, crash just erased $100 BILLION of market cap in #Bitcoin in 15 minutes.

Between 12:15 PM ET and 12:30 PM ET, Bitcoin fell from $64,000 to $59,000.

This was a near 9% swing in 15 minutes right as many Coinbase users began showing… pic.twitter.com/fUcRusrddX

— The Kobeissi Letter (@KobeissiLetter) February 28, 2024

Coinbase, meanwhile, encountered an outage that led to a $100 billion loss in Bitcoin market cap within just 15 minutes in late February. The disruption occurred during a period of substantial rally in Bitcoin prices, with CEO Brian Armstrong attributing the outage to unexpectedly high demand.

The post OKX API Failure Causes Account Balance Confusion, Thousands of Users Affected appeared first on Cryptonews.

Curio said it will conduct a fund compensation program for affected liquidity providers, which could potentially take up to one year to complete.

Curio Reports Smart Contract Exploit And Voting Vulnerability, Assures Users of Prompt Action and Security Measures

ALERT@curio_invest has experienced a $16M exploit involving a smart contract based on @MakerDAO within their ecosystem!

The exploit appears to stem from a permission access logic vulnerability. The attacker leveraged this vulnerability to mint an additional 1B $CGT.… https://t.co/xWvvYzrWaI pic.twitter.com/mdrKyV3t9U

— Cyvers Alerts (@CyversAlerts) March 25, 2024

According to the Web3 security firm Cyvers, the hack most likely occurred due to a vulnerability in the permissioned access logic. This vulnerability allowed the attacker to create an additional 1 billion CGT tokens, which in turn resulted in the hacker obtaining CGT tokens worth almost $16 million.

The Cyvers Alerts message comes after Curio warned the community about a smart contract exploit on March 23.

Community Alert: We've just been notified of a smart contract exploit within our ecosystem. Unfortunately, MakerDAO’s based Smart contract used within our ecosystem were exploited on the Ethereum side. We're actively addressing the situation and will keep you updated. Rest…

— Curio Ecosystem | Tokenize The World (@curio_invest) March 23, 2024

Curio notified its community of the exploit through a post on X and assured them that it is actively addressing the situation. It was revealed that a MakerDAO-based smart contract utilized within Curio was compromised.

They further assure users that only the smart contract on their Ethereum side was affected, and all contracts on Polkadot and the Curio Chain remained secure. The Curio Ecosystem team said,

“Unfortunately, MakerDAO-based Smart contracts used within our ecosystem were exploited on the Ethereum side. We’re actively addressing the situation and will keep you updated. Rest assured, all Polkadot side and Curio Chain contracts remain secure.”

On March 25, Curio released a post-mortem report on the exploit and a compensation plan for affected users. The report outlined that the issue stemmed from a voting power privilege access control flaw.

The attacker gained access to a few Curio Governance (CGT) tokens, enabling them to increase their voting power within the project’s smart contract. With the elevated voting power, the attacker executed a series of steps that allowed them to perform arbitrary actions within the Curio DAO contract, ultimately leading to the unauthorized minting of a large quantity of CGT tokens.

Curio Announces Recovery Plans and Compensation Program Following Exploit

Exciting news! CurioDAO's recovery strategy from the recent exploit is underway. Here's what's happening:

– Swift Response: Our team acted immediately to contain the impact.
– Enhanced Security Measures: Implementing robust security protocols to prevent future incidents.
-…

— Curio Ecosystem | Tokenize The World (@curio_invest) March 25, 2024

Following the exploit, Curio announced plans to reward white hat hackers who helped them recover the lost funds. The team stated that hackers could receive a reward equivalent to 10% of the funds recovered during the initial recovery phase.

The Curio team also stated that all funds affected by the attack would be returned to the affected parties. To facilitate this, the team announced the creation of a new token called CGT 2.0, which will be used to restore 100% of the funds for CGT holders.

Additionally, Curio outlined a fund compensation program for liquidity providers affected by the exploit. The compensation program will be conducted in four consecutive stages, each lasting 90 days. 

During each stage, compensation will be paid in USDC or USDT, amounting to 25% of the losses incurred by the second token in the liquidity pools. This staged approach suggests that total compensation may take up to one year to complete.

In February, losses due to hacks and scams decreased to around $67 million, approximately half the January figure. All attack vectors were related to the decentralized finance (DeFi) sector, while centralized platforms remained unaffected.

Most losses in February were attributed to hacks of the gaming platform PlayDapp and the decentralized exchange FixedFloat, which collectively lost $58.45 million. Additionally, cryptocurrency casino Duelbits suffered a loss of $4.6 million due to a compromised private key.

The post Curio Hit by $16 Million Exploit Due to Voting Power Vulnerability appeared first on Cryptonews.

In a commendable response, Layerswap has pledged to fully refund the stolen funds to affected users. Additionally, they will offer a 10% bonus as compensation for the inconvenience caused by the attack.

Layerswap Hit by Domain Hijack and Phishing Attack, Vows to Refund Users

Layerswap March 20 incident

On March 20th, around 7:40 PM UTC, the @GoDaddy account for our https://t.co/xGoN2q5vOa domain was compromised, and we're currently awaiting a comprehensive report from GoDaddy to understand the breach's specifics. Meanwhile, here's some context…

— Layerswap (@layerswap) March 21, 2024

On March 20 at approximately 7:40 UTC, a significant security breach occurred involving the layerswap.io domain. The incident began when malicious actors compromised Layerswap’s GoDaddy account, allowing them to alter the domain’s DNS settings. THe domain hijack allowed hackers to redirect traffic to a phishing site when users attempted to access Layerswap’s website.

The attackers also changed the domain owner’s email address, gaining complete control over DNS and associated email services. This unauthorized access led to an attempt to reset Layerswap’s X account password at 7:42 pm UTC. The X account’s password reset process did not require two-factor authentication (2FA).

Fortunately, Layerswap had 2FA enabled for its X account login, which thwarted both the company and the attackers from accessing the account despite the password reset attempt. However, the compromise of the domain resulted in a phishing site being displayed to users, leading approximately 50 individuals to fall victim to the scam and collectively lose around $100,000 worth of assets.

At 7:45 p.m., Layerswap promptly contacted GoDaddy Support for immediate assistance. However, they encountered delays in response. GoDaddy initially indicated a 12-hour response time, which was later reduced to 3 hours. This delayed response from the domain registrar allowed the hacker to maintain domain control for an extended period of time.

At around 10:21 pm, Layerswap received instructions from GoDaddy on resetting the account password. However, upon attempting to reset the password, they found the account locked, and the attackers had once again altered the email address associated with the account.

Fortunately, by 11:07 p.m. UTC, Layerswap had regained access to their GoDaddy account. This allowed them to reverse the hacker’s modifications and regain control of their domain.

This is the last post of this thread.

The @layerswap page and our Discord server (https://t.co/LGsjxQHeY4) are the only official channels of Layerswap.

Watch out for fake accounts and external links in the replies trying to phish you.

Always double check before taking any…

— Layerswap (@layerswap) March 21, 2024

In response to the impact on affected users, Layerswap has taken proactive measures. The company is fully refunding the affected users and offering an additional 10% as compensation for the inconvenience caused by the security breach.

Crypto Scammers Still Active: $46 Million Lost in February Despite Fewer Large Victims

According to a report by Cryptonews, the anti-scam solution company Scam Sniffer revealed that February 2024 witnessed a substantial loss of $46.86 million in cryptocurrencies due to scams. The report highlighted that over 57,000 individuals became victims of various phishing scams during this period. Interestingly, there was a significant 75% decrease in victims losing over $1 million compared to January 2024.

Among the total losses, the Ethereum mainnet accounted for more than $36.2 million, constituting 78% of the total exploits in February. Additionally, Ethereum blockchain users comprised the largest group of victims, totaling 25,029 individuals.

It’s worth noting that on February 15, more than $6.2 million in digital assets were lost in a single day, indicating a notable spike in scam activities that day.

In March, the decentralized finance (DeFi) aggregator ParaSwap faced a significant vulnerability in its newly deployed Augustus v6 contract. Although ParaSwap took immediate action to roll back the v6 contract and alerted users to take necessary precautions, a hacker still managed to cash out funds worth approximately $24,000 from four different addresses. This incident affected 386 addresses, prompting the protocol to urge users to report any unidentified loss of funds during the initial investigation.

The post Layerswap Recovers Domain After Hijack, Restores User Funds After $100,000 Loss appeared first on Cryptonews.

The bank will launch borrowing and lending services against tokenized RWA in partnership with German-licensed DeFi platform Swarm Markets.

According to Swarm Markets spokesperson, both Meld and Swarm signed a memorandum of understanding (MoU)

“This could be really interesting as we go into the next bull run, where people can lend against their stocks to ape more into bitcoin, for example,” the source told CoinDesk.

Swarm Markets, which claims to be the world’s first regulated DeFi protocol, operates under regulatory license from the Federal Financial Supervisory Authority (BaFin) in Germany.

Last year, Swarm launched EU-compliant know-your-customer (KYC) solution for tokenized securities and trading to their users under German law. The company launched its permissionless RWA trading platform in December 2023.

With the collaboration Meld aims to introduce cross-asset margining opportunities for retail investors, which lacks in traditional methods.

Meld has a customer base of 75,000, who have signed for early access to its platform. Furthermore, Meld recently received its virtual asset service provider (VASP) license in Lithuania.

Scope for Tokenized RWA

Per analysts from digital asset management firm 21.co, tokenized RWA could grow to a staggering $10 trillion in a “bull case” and $3.5 trillion in the “bear case” by 2030.

A report published in October noted that the market is “experiencing an unprecedented growth.”

“The convergence between crypto and traditional asset classes, including fiat currencies, equities, government bonds, and real estate, is experiencing an unprecedented growth.”

The forecast for tokenized assets remains high. According to a Bank of America report, tokenization is likely to transform infrastructure and financial markets. The bank also noted that tokenization could increase efficiencies, reduce costs and optimize supply chains.

The post Crypto Bank Meld to Launch Tokenized RWAs to Retail Investors appeared first on Cryptonews.

He talked about BNB Chain and Binance being separate entities, different layers of BNB Chain coming into a unified platform, shifting to fully on-chain models, and bringing 15x lower fees.

He further touched on the team’s 2024 plans for more Layer-2 innovations, AI and DePIN projects they’re working with, and their focus on gaming.

In this episode, Zhao discussed:

• opBNB and BSC DAU being no. L1 and L2 (top 2 chains);
• high-frequency DeFi, AI, DePIN, and fully on-chain gaming;
• the differences between each chain (opBNB, BSC, Greenfield);
• present-day crypto market and current opportunities;
• ETH gas fees – will the new update make gas lower?

Jimmy Zhao gave a wide-ranging exclusive interview, which you can see below. Conversely, you can watch the entire podcast episode above.

Binance and BNB Chain: Separate Entities

Zhao commented that the current crypto market gave the industry participants a chance to educate the community about blockchain: what it is and what kind of value it creates both for the market and people’s lives.

Therefore, he is currently looking for opportunities to meet people in person, including different developers and projects. The goal is to have a deeper discussion about the ways to build on top of BNB Chain, as well as other blockchains, and how to contribute to the ecosystem.

Speaking of which, Zhao emphasized that BNB Chain is a separate entity from the crypto exchange Binance.

For example, the team working on BNB Chain can’t help users with Binance-related issues.

This team is taking care of the chain alone and projects built on top of it – not the exchange.

In that respect, it is incorrect to refer to it as ‘Binance Chain.’

That said, Binance is one of the biggest users of BNB Chain. The latter also provides technical insight and works with Binance Lab-incubated projects.

“So basically, we are providing the technical infrastructure for Binance, and also other projects as well,” Zhao said.

Shifting to Fully On-chain Models

Zhao further discussed the One BNB Chain project.

The recently released 2024 roadmap revealed the so-called One BNB multi-chain paradigm for a unified platform.

The plan was formed as BNB Chain encompasses four layers: a governance layer called BNB Beacon Chain, a smart contract settlement layer called BNB Smart Chain (BSC), a storage layer called BNB Greenfield, and a scaling layer that includes zkBNB and opBNB.

One BNB Chain aims to integrate these different chains to have decentralized computing and data storage, “one holistic solution,” Zhao said.

This would also mean streamlining the interconnections between the Layer-1 (L1) chain BSC and the Layer-2 (L2) network opBNB.

Zhao said that,

“With this paradigm, we aim to facilitate the transitions of applications to fully on-chain Web3 framework, so that [the developers] can leverage the unique strength of each chain within the BNB ecosystem.”

Through this approach, the team will accomplish additional goals they’ve set.

These include enhanced scalability, higher transactions per second (TPS), improved interoperability, as well as “making it easier for developers to build and deploy applications that can operate across multiple-chain environments.”

The applications can be fully on-chain, not only the execution part but also the storage part, to adjust to the growing demands for more efficient, more secure, and more user-friendly applications.

Therefore, while the Web3 applications have so far focused on partially on-chain models, the focus is shifting to fully on-chain.

Don't forget to migrate your assets from Beacon Chain to BSC ahead of the Fusion! https://t.co/RamY0dbBhp

— BNB Chain (@BNBCHAIN) March 18, 2024

15x Lower Fees

Continuing on the previous discussion, Zhao noted that, at this moment, OP Stack – the standardized, shared, and open-source development stack that powers the L2 scaling solution Optimism – is the most suitable solution for BNB Chain to have performance optimization.

The team, he explained, wants to make sure opBNB is a high-performance Layer-2.

They reduced the block time to one second and increased the gas limit from 30 million gas per block to 100 million gas per second on opBNB.

This means it can make around 4,500 transfer transactions per second.

Zhao added that,

“We also want to set the gas fee to a new level.”

For example, if a user transfers a token on opBNB, the gas fee is around 0.001 dollars – lower than Layer-2s on top of Ethereum or BSC itself, said Zhao.

Moreover, there has been a lot of discussion lately about the implementation of EIP-4844, which introduces “blobs” – that is, efficient data storage channels – to further reduce Layer-2 transaction costs.

Following the EIP-4844 introduction, the Layer-2 gas fee “will be reduced a lot,” Zhao said and added:

“So we will reduce the cost even further to 15 times lower than the current existing level.”

This will be hugely important for the ecosystem because the gas fee is still a very big issue that needs to be solved.

Gas fees, such as those seen on Ethereum, create an industry that is simply “not sustainable.”

We asked @qnaweb3's AI to explain blob transactions:

"Blob transactions trim transaction costs and bolster scalability, while improving storage and processing efficiency. Their ultimate goal is to streamline layer-2 transactions and enhance dApps' efficiency and accessibility." pic.twitter.com/unVfPJeJfq

— BNB Chain (@BNBCHAIN) March 17, 2024

The blobs are a sort of temporary storage that L2s can use, and it will be “a good thing for the ecosystem.”

This is why the team will also introduce blob storage to BSC. Zhao said that they would publish the timeline soon.

“We want to show our respect to the Ethereum ecosystem, and we believe this kind of innovation can also bring benefits to BNB Chain users as well,” said Zhao.

More Layer-2 Innovations in 2024

Decentralized finance (DeFi) may just be the foundation of the blockchain ecosystem, Jimmy Zhao argued.

People do not like the centralization of exchanges or applications. And the financial application is the core function of the blockchain, from Bitcoin to the latest developments, he said.

Therefore, in 2024, the team will focus further on DeFi, given that there are “a lot of the very good DeFi projects coming to the BSC.”

That said, they also want to do more innovations in the L2 realm.

The reason they want to increase the opBNB TPS is to be able to support more innovative solutions, such as high-frequent transactions or trades on an L2.

Also, they aim to ensure that the L2 block time can be reduced even further to increase the latency of the blockchain, especially for high-frequent transactions.

Furthermore, the team will introduce interoperability among different L2s “so that a lot of innovations can be built on top of it.”

This means, said Zhao, that the cross-chain DeFi and atomic transactions among different blockchains could also be possible.

AI and DePIN Projects On the Radar

Jimmy Zhao said he is excited about the artificial intelligence (AI) marketplace that can utilize decentralization blockchain technology.

Furthermore, the BNB Chain team wants to offer specific infrastructure: for example, BNB Greenfield can provide a storage layer for AI.

It can tokenize the data and provide a new economic model for data labeling or data analytics for the AI training sector.

At the same time, they want to allow zero-knowledge (ZK) machine learning.

All of these would be exciting and innovative solutions for the whole industry, Zhao said and added:

“We are working together with some of the AI projects to find the best solution on top of BNB Chain. So, you will see a lot of projects coming to the BNB Chain in the future.”

He couldn’t provide more details at this point.

And speaking of partnerships, Zhao said that they “have some collaborations with the DePIN projects that can be built on top of the BNB Chain.”

BNB Chain provides the tokenization of the Decentralized Physical Infrastructure Network (DePIN) service to the users who can pay for that service with crypto.

Also, they want to work together with DePIN projects to utilize One BNB Chain, with Zhao saying that:

“We want to make sure our whole One BNB Chain paradigm can provide the execution layer for DePIN solutions so that their smart contract and their business logic can be implemented on opBNB or BSC.”

The data part of the DePIN solution can be saved on BNB Greenfield.

Therefore, the team works with the DePIN projects to simplify their workflow, give feedback on their business model, and provide technical infrastructure, including token economy.

“There are a couple of the DePIN projects also on our radar,” Zhao said.

That's the recap!

Do you think RaaS and BEP-336 will encourage more developers to port their apps to BSC? Let us know what you think.

— BNB Chain (@BNBCHAIN) March 18, 2024

Gaming-Focused Chain

Blockchain can bring more opportunities for the whole gaming industry, Jimmy Zhao told Matt.

And Web3 games are very much in the BNB Chain team’s focus because “we do believe our infrastructure can provide values to game developers or game communities,” he said, adding:

“Right now, we are working [with] a lot of game projects.”

The team aims to reduce the transaction time to make transactions on-chain as fast as possible, thus improving the gaming experience.

At the same time, they want to reduce the cost, making it possible to make a game fully on-chain.

1⃣ Unleashing the Future of Gaming: The Power of BNB Chain
–
As BNB Chain fortifies its position as a frontrunner in the blockchain gaming domain, its strategic emphasis on this sector is more pronounced than ever.

Read morehttps://t.co/yu4FMnJ54W

— BNB Chain (@BNBCHAIN) March 18, 2024

Additionally, there are some challenges that game developers face and for which the team has solutions.

These include the complex computations and the big storage requirements. BNB Greenfield can help here and even make non-fungible tokens (NFTs) “evolutionary.”

Also, due to the bigger block size, the chain can support more complex computations on-chain, while allowing offloading off-chain as well. “A bigger block time can make the game developers’ lives much easier,” said Zhao.

Finally, the team is exploring another solution to help game developers: they aim to provide a more innovative and developer-friendly software development kit (SDK).

__________

About Jimmu Zhao

Jimmy Zhao is a seasoned Senior Solution Architect at BNB Chain, leveraging over a decade of diverse experience in system and infrastructure development.

Leading the design and implementation of enterprise-grade blockchain solutions, Zhao focuses on translating business needs into technical requirements, collaborating closely with dapp and infrastructure projects.

His extensive background spans notable roles at Alibaba, HSBC, and IBM, showcasing his prowess in the payment, finance, and technology sectors.

Zhao’s significant contribution to the opBNB system and ecosystem development demonstrates his commitment and contribution to accelerating the adoption of blockchain technology.

The post Jimmy Zhao, Senior Solution Architect at BNB Chain, on DeFi, AI, DePIN, Fully On-Chain Gaming, and One BNB | Ep. 318 appeared first on Cryptonews.

He told listeners how he envisages the next phase of DeFi, and why the Morpho Labs team opted for a minimalist approach, contrary to the current DeFi trends.

Finally, he touched upon the recent disagreement with Aaave, and Gauntlet leaving Aave to join Morpho Labs, as well as his opinion that DAOs are not suited for managing the risk of protocols.

In this interview, Frambot discussed:

• liquid staking and yield farming;
• next evolution of DeFi Spending;
• moving from app to infra – the future of DeFi;
• DeFi 2.0 defining crypto’s coming bull market;
• DeFi risk manager Gauntlet leaving Aave to join Morpho;
• a shift from monolithic to layered protocols in 2024;
• DAOs not being suited for managing the risk of protocols;
• Morpho Blue;
• lowering the barrier to entry;
• raising $18 million for Morpho from a16z and Variant while still in school.

Paul Frambot gave a wide-ranging interview, which you can watch above – or you can read a part of it below.

Students Raising Millions

During his second and third years at the Institut Polytechnique de Paris, where he earned his Master’s degree in 2021, Frambot managed to raise millions over two rounds.

At the time, Frambot was studying consensus algorithms and distributed systems. He had an opportunity to meet “a bunch of researchers and interesting people” working in decentralized finance (DeFi) and blockchain.

This is how the first think tank around DeFi was created there. The members discussed what they could improve in DeFi, specifically lending.

Through the industry insiders, Frambot got in touch with investors and made his way into the VC world.

In the pre-seed round, the group raised $1 million for Morpho. They used the funds to hire a few people and do the first contract audits of the protocol’s first version.

A few months later, they raised more money, including from Andreessen Horowitz and Variant, with Frambot stressing that they have over 100 investors in Morpho.

That said, the four co-founders managed to raise $18 million for Morpho while still at university.

DeFi 2.0: Moving from App to Infra

Frambot discussed what DeFi 2.0 looks like and how it scales.

He argued that the next evolution of DeFi involves moving from app to infra.

The co-founder went on to explain that the earlier protocols, such as Maker, Uniswap, Aave, and Compound, were usable as is, and user-friendly in the sense that they were self-contained.

That was the first iteration of DeFi.

But protocols want to scale and enable more features.

One way to move forward is to enshrine all features in one monolithic protocol. But that may comprise efficiency and security because there are more lines of code to handle.

“You preserve the UX of it, the product aspect of it, but it does not scale.”

Morpho decided not to have a monolithic pool but to break the pool into two pieces instead: the risk management part and the protocol part.

This is a layered approach, with “more layers of abstraction, exactly the same way the internet has been built.”

Frambot said that the internet stack is built in layers. When we use the internet, we don’t experience the full complexity of it. We just see, for example, a browser. But behind the scenes, there are different layers of abstraction.

He argued that “it feels like this is exactly the way DeFi is going, which is having core communication protocols, core financial protocols that do not have any opinion about risk, about compliance. But on top, you rebuild the risk and compliance profile that you want.”

This allows the protocol to be at the bottom, followed by the risk management layer, and then on top, the user application layer.

In less than 2 months since launch, @MorphoLabs Blue protocol has reached over $200m in TVL, with continued growth by introducing a new risk layer for suppliers (aka MetaMorpho vaults).

Here we'll explain how you can fully utilize Blue with advanced DFS features. pic.twitter.com/9yzwFFeRjq

— DeFi Saver (@DeFiSaver) March 14, 2024

And we go back to DeFi: what the industry is looking to do is build infrastructure for wealth – on top of which the entire financial flow of humanity will be handled.

With the current security practices, this is unimaginable.

Therefore, the advantage of the described, scalable DeFi 2.0 is that it enables protocols to be immutable and simple, and it segregates complexity in layers, avoiding the dangers of a monolithic pool.

Meanwhile, DeFi is growing. That used to be an issue, and it has been difficult breaking out of the existing circle.

But “I think the approach I’m describing is such a neat way of progressively forcing the boundaries of that space,” Frambot said.

In a few weeks of existence, Morpho Blue markets already have insane traction.

Interest generated are growing exponentially and so is the profitability of the vault curators.

Our main objective is that all our builders have one of the most profitable business in the industry! pic.twitter.com/qs9sDFCRXK

— Paul Frambot | Morpho (@PaulFrambot) March 13, 2024

Going Against Latest DeFi Trends with a Minimalistic Approach

Frambot has shared on his social media that Morpho does one job: simple and efficient lending and borrowing. That’s all. There are no stablecoins, DEXes, equity, advisory, etc. In other words escaping from the wave of DeFi trends and services flooding the market.

This is a rare approach in a world where projects aim to venture into various different spheres.

Frambot explained that they want to be “laser-focused, do one thing, and do it extremely well.” They don’t want to spread.

“And this, in my opinion, is crucial in DeFi because there are a lot of opportunities.”

Moreover, unlike most other projects, Morpho’s founders are contractually forbidden to invest in or advise any other project. “We have to be focused on Morpho,” said Frambot.

This approach, he argued, has given the co-founders a unique approach to DeFi landing in general.

Morpho’s first version, which now has more than $2 billion in deposits, “was never seen before in the space and not even close to looking like another protocol,” he said.

Furthermore, the new version, Morpho Blue, is also “extremely different” from what people are used to seeing across DeFi trends and updates.

𝟮/ 𝗪𝗵𝘆

Morpho is the 3rd largest lending platform on Ethereum, with over $1B in deposits.

Yet, current platforms are not scalable enough to match the trillions processed by TradFi lending markets.

Morpho must evolve to become autonomous and elevate decentralized lending.

— Paul Frambot | Morpho (@PaulFrambot) October 10, 2023

The protocol enables a very wide variety of use cases, based on top of a trustless and efficient base protocol of just 600 lines of code, instead of thousands.

He remarked,

“Taking such a minimalistic approach goes against DeFi 1.0 trends, which is building and then training as many features [as possible] to be able to do more and more.”

Per Frambot, Morpho’s strategy is “definitely a winning” one long-term.

DAOs May Not Be the Best Option

Aside from his stance on DeFi trends, Frambot has argued that decentralized autonomous organizations (DAOs) are not suited for managing the risk of protocols, given that effective risk management demands both expertise and the ability to make super-fast, efficient decisions.

During the interview, he explained that he is not against DAO-based risk managers but that he doesn’t believe that it’s the best thing to do. In the end, it will be up to the market to decide, though.

Doing risk management is highly complex. It entails multi-dimensional problems, statistics, math, data, etc.

For example, in the case of Aave, there are more than 700 different risk parameters: liquidation incentives, collateral factors, oracles, supply caps, borrow caps for each asset, and hundreds more.

“Essentially, we’re asking token holders to vote on a daily basis to improve, change, and adjust those risk parameters. […] I don’t think token holders, to be frank, could be anybody. I don’t think they’re the right person to do this job.”

And while DAOs and decentralization in general are excellent concepts, we must make sure “we do things that truly make sense to provide the best possible use cases, experience, and safety for users.”

Meanwhile, in Morpho Blue, the risk management is completely externalized from the protocol.

BlockAnalitica, Bprotocol, Steakhouse Financial, re7, … and now Gauntlet.

Don’t you see what is happening? DeFi lending has been unbundled. Risk management has been completely externalized from the core protocol. https://t.co/R49cjkE5uU

— Paul Frambot | Morpho (@PaulFrambot) March 13, 2024

Everything built on top of Morpho Blue can have its own specific risk management: some can be token-based risk, and others can be centralized, or controlled by users.

“And we’ll see what formula is the best [for] risk management.”

In the end, it could be one approach or a combination of several that will emerge as a winner.

__________

About Paul Frambot

Paul Frambot is the Co-Founder and CEO of Morpho Labs, a research and development company responsible for building and growing the Morpho protocol.

Frambot co-founded Morpho Labs whilst studying towards his now-completed Master’s in Parallel and Distributed Systems from the Institut Polytechnique de Paris in 2021.

During his studies, he raised $18 million from top investors – including Andreessen Horowitz (a16z) and Variant – for Morpho, which has since grown into a multi-billion-dollar lending protocol.

The latest version, Morpho Blue, is an independent, simple protocol that serves as a secure, efficient, and flexible base layer for users and applications.

The post Paul Frambot, CEO of Morpho Labs, on DeFi 2.0, Modular Layered Protocols, and The Next Evolution of DeFi | Ep. 318 appeared first on Cryptonews.

In a detailed proposal published on the community forum, the Arbitrum Foundation outlined its vision for the fund. The initiative, designed to enrich Arbitrum’s gaming landscape, is currently seeking endorsement from the Decentralized Autonomous Organization (DAO) to roll out over a span of two years.

Arbitrum’s Proposed Gaming Fund

Arbitrum’s endeavors in decentralized finance contrast with its emerging presence in gaming, trailing behind competitors in terms of games and player engagement. The Gaming Catalyst Program (GCP) is believed to effectively attract builders and retain talent.

“The GCP aims to provide support and resources to game developers interested in building on the Arbitrum network,” the proposal reads. “This includes access to funding, mentorship, and other forms of assistance to expedite the development process.”

The program is set to use the platform’s resources to support experienced professionals and high-potential gaming projects. This approach would encourage the development of quality games within the ecosystem.

To participate in the program, the developers must be approved and included in the whitelist by a community council. The approved projects will be “subject to a robust set of checks and balances.”

The requested $400 million fund, or 200 million ARB, will be distributed for builder onboarding and growth (160 million ARB) and infrastructure bounties (40 million ARB).

Goals, KPIs, and Scheduled Votes

The proposal also detailed that goals for the initiative encompass receiving 200-300 applications from game developers interested in building on the network.

Success measures include achieving a 20% share of all new web3 games on Arbitrum, leading net migrations from other Layer 2 platforms, and facilitating the launch of over 25 Orbit projects.

The proposal was drafted by Daniel “Djinn” Peng, co-founder of Vela Exchange, and Karel Vuong, co-founder of Treasure.

The initiative will get a snapshot vote on March 15 for general delegate agreement and feedback with the tally vote and ratification scheduled in April 2024. The community will then proceed with council member elections, venture team formation, and roll out grant applications till May.

The post Arbitrum Seeks DAO Approval for $400 Million Gaming Ecosystem Fund appeared first on Cryptonews.

This TPS statistic and Monad’s goal to optimize and improve Ethereum’s functionality signal the project’s potential to address Ethereum’s scalability issues.

“This is an important milestone for our team. Load testing will continue before the phased release of permissioned testnet and public testnet,” Monad CEO Keone told Cryptonews. “Monad is a deep engineering effort to deliver performant parallel EVM. We’re excited to share our team’s advances in parallel EVM execution and performant state access later this year.”

Monad Devnet Offers Efficiency Gains

Monad’s impending arrival comes at a time when congestion and high fees continue to plague the network. The demand for scalable layer 1 solutions that can build on Ethereum’s solid foundations is higher than ever.

Monad Devnet is live.

10,000 real TPS achieved on the EVM. pic.twitter.com/1bnfsi6bqU

— Monad (evm/acc) (@monad_xyz) March 14, 2024

At Monad’s core is a new Ethereum Virtual Machine (EVM) designed from scratch to use parallelized execution and a pipelined architecture. This allows transaction processing to occur simultaneously, rather than sequentially, enabling vastly higher throughput.

Developer Experience a Priority for Monad

By remaining bytecode compatible, Monad promises to ensure seamless integration with the ecosystem of Ethereum-based dApps and DeFi protocols. Developers will be able to port their decentralized applications to Monad without extensive reworking.

A key benefit of Monad’s architecture is the ability to finalize blocks instantly after generation, eliminating the long confirmation times that often frustrate Ethereum users. Monad is able to achieve this by decoupling execution from consensus.

In addition, Monad implements a one-second block time to maximize throughput. This presents potential difficulties for node operators, however, as the hardware requirements are roughly twice that of Ethereum.

Monad Labs Attracts Major Investment

Venture capital firm Paradigm, a key backer of several prominent industry startups, is reportedly leading a fundraising round of over $200 million for Monad Labs. This round, which would follow a $19 million seed round in February 2023, places a $3 billion valuation on Monad Labs.

Paradigm has already committed $150 million and has been gauging interest from additional investors since late 2023. A successful raise of this magnitude would mark the largest crypto-related funding round of 2024 to date, according to Crunchbase’s Web3 Tracker.

EigenLayer got $100M from a16z, Eclipse just got a $50M round and now Monad might get $200M of which $150M comes from Paradigm goes to show VCs are definitely circling the waters now. Next stop is now massive eco fund announcements pic.twitter.com/npX2JfOHkk

— guleid (@riddle245) March 11, 2024

With the devnet now live, the next milestone is the launch of Monad’s public testnet, expected to go live in Q2 2024. This will enable rigorous real-world testing of the network’s performance and capabilities.

The Monad mainnet is slated to follow later in the year. The project has generated excitement and anticipation in the Ethereum community, with developers eager to leverage Monad’s scalability.

If Monad can deliver on its promise of high throughput and instant finality while retaining Ethereum’s security guarantees, it may very well offer the push that finally brings crypto to the masses.

The post Monad Devnet Launches with Scalability Promise – Could it Push Ethereum Technology to New Heights? appeared first on Cryptonews.

Designed as an experimental layer-2 solution on Ethereum, the Blast network offers a native yield on assets. The layer-2 blockchain team said a full analysis has been done on the issue, and it will be shared shortly.

Blast Network Experiences Block Production Halt Due to Ethereum Upgrade

The Blast Mainnet has stopped producing blocks due to issues related to Ethereum’s Dencun upgrade.

Core engineering contributors are working on a fix. We’ll share an update and post-mortem once the fix is live (eta 30-60 min).

— Blast (@Blast_L2) March 13, 2024

According to an announcement posted on X by the Blast project, the halt in block production is attributed to issues arising from Ethereum’s Dencun upgrade. 

The Dencun upgrade, a significant update for the Ethereum network, was deployed earlier in the day. According to Blast Scan data, block production ceased around 10:00 AM ET following the upgrade.

Upon discovering the issue, the Blast team promptly responded, with their core engineers actively working to find a solution. They provided an estimated timeframe of 30 to 60 minutes for implementing the fix. After approximately an hour, the Blast team updated that operations had returned to normal, and full analysis of the incident will be published soon.

Update: the issue has been resolved.

A full analysis on the issue will be shared shortly. https://t.co/Ggw05W3g3b

— Blast (@Blast_L2) March 13, 2024

Additionally, they announced updates to the Blast node repository and provided guidance for users experiencing transaction issues during the downtime. They shared instructions for MetaMask and Rabby users and mentioned ongoing efforts to upgrade Blast nodes with Infura and BlockPi.

Blast Network Gathered $2.96 billion Total Value Locked value while Dencun Upgrade Unfazed by Optimism’s Block Production Activities

As per data from L2 Beat, the total value locked in smart contracts on the network, including its Ethereum multi-sig wallet, stands at approximately $2.96 billion. Several protocols, such as Orbit Protocol, Ring Protocol, and Pac Finance, have been developed on the Blast network or expanded to integrate with it.

In the last 24 hours, the largest protocol within the network, Orbit Finance, witnessed a huge uptick in total value locked (TVL), rising by 32% to reach $431 million. Despite this surge in TVL, the native token of Orbit experienced a notable decline in value, plummeting by over 20% today. This decline comes after the token’s issuance on March 8.

Blast faced initial scrutiny for soliciting deposits to a multisig wallet before its layer 2 went live. Despite this, it garnered $2.3 billion in deposits. Following its launch on the mainnet in late February, Blast, a fork of Optimism, surpassed Optimism as the second-largest Ethereum rollup by total value locked (TVL) as of Wednesday morning, according to DeFiLlama. The Blast ecosystem hosted 51 protocols, collectively securing over $1 billion in assets.

In contrast, Optimism continued its block production activities unaffected by the Dencun upgrade. Blast’s appeal to developers was evident, with over 3,000 projects participating in its developer contest to launch on the Layer-2 mainnet and receive an enhanced airdrop allocation.

Developers highlighted the rollup’s deep liquidity and the successful track record of its founder in building the NFT marketplace Blur as key factors driving their interest in the platform.

Dencun is the most anticipated Ethereum hard fork upgrade since the Merge. The network upgrade is expected to make it much cheaper to use layer-2 networks, thanks to a new ability that lets the network store information for a limited amount of time rather than indefinitely.

The post Layer-2 Blockchain Blast Grinds to a Halt During Ethereum Dencun Upgrade appeared first on Cryptonews.

Republicans Criticize Consumer Financial Protection Bureau’s Oversight Rule

“There is no doubt that this proposal will decrease incentives to innovate in the payments space and leave consumers encumbered with fewer firms from which to choose a payment method–that decreases competition,” Hill said.

Republican subcommittee members predominantly argued that the Consumer Financial Protection Bureau’s new rule was overreach at best and possible surveillance at worst.

#WATCH: Chairman @RepFrenchHill at today's hearing on @CFPB's larger participants in digital payments rule:

"The CFPB needs to go back to the drawing board, work to protect consumers, and not hinder innovation."

Read more https://t.co/afmMi8wjVf

Watch his remarks pic.twitter.com/wLS10KXNvI

— Financial Services GOP (@FinancialCmte) March 13, 2024

“The CFPB needs to go back to the drawing board, work to protect consumers, and not hinder innovation or expand the CFPB’s insatiable reach for more power and scope,” the chairman continued.

CFPB to Crack Down on Regulatory Arbitrage

Originally proposed by the Consumer Financial Protection Bureau in November 2023, the new rule would allow the agency to “supervise larger nonbank companies that offer services like digital wallets and payment apps,” including peer-to-peer and electronic fund transfer payment services.”

“Payment systems are critical infrastructure for our economy. These activities used to be conducted almost exclusively by supervised banks,” Consumer Financial Protection Bureau Director Rohit Chopra said in a November 2023 statement announcing the proposal. “Today’s rule would crack down on one avenue for regulatory arbitrage by ensuring large technology firms and other nonbank payments companies are subjected to appropriate oversight.”

According to Data Horizon Research, the digital payment sector is expected to reach a valuation of $505 billion by 2032, growing by 19.7% annually each year.

Democrats pushed back at Wednesday’s hearing, arguing that payment applications such as Venmo and PayPal would have to comply with consumer protection laws, effectively making the sector safer.

“The CFPB is not becoming a tech regulator as much as tech companies are becoming banks,”  said Congressman Stephen Lynch (D-MA).

Meanwhile, Representative Maxine Waters (D-CA) claimed that the rule would not “restrict competition and payments” but instead “increase competition by showing that the largest companies are not able to leverage their size and data to unfairly crowd out smaller companies.”

CFPB Faces Pressure to Clarify Crypto Stance

Wednesday’s hearing comes amidst broader conversations about the line between traditional finance and digital assets, particularly in light of 2023’s banking crisis that saw a number of crypto-friendly banks suddenly collapse.

Despite congressional conversation on the CFPB’s proposed rule affecting cryptocurrencies, the government agency has yet to provide clarity on what to expect going forward in regards to regulating digital asset payment systems.

“It is unclear when the CFPB intends to finalize the proposal or whether the various concerns that were raised will be addressed,” the committee memorandum reads.

The post House Panel Chairman Tells CFPB to “Go Back to the Drawing Board” Over Stringent Crypto Oversight Proposal appeared first on Cryptonews.

According to the press release, PancakeSwap is conducting a $3 million CAKE airdrop to incentivize both current users and newcomers to explore the benefits of the upgraded platform.

Notably, the airdrop is available on a first-come, first-served basis.

__

Update on the airdrop with PancakeSwap comment (March 18, 10:25 UTC):

In an email to Cryptonews regarding the article published on March 12, the PancakeSwap team has stated that:

“There has been some misinformation circulating this week regarding a “$3M airdrop from PancakeSwap”, stemming from an unverified source, that we are still investigating. Any information about us unveiling a “$3M airdrop” is false.”

The above-cited press release is no longer live. However, it has been archived.

“PancakeSwap will allocate $500,000 to a PancakeSwap Developer Program to encourage innovation, creativity, and collaboration within the developer community,” the latest press release stated.

The DEX is scheduled to launch in the third quarter of this year on Ethereum and BNB Chain. It will expand to additional chains in the future.

You can read the team’s full PancakeSwap v4 announcement here.

Original article below.

__

Reducing Fees

The team noted that PancakeSwap V4 has brought “a plethora” of technical advancements and features. They aim to enhance efficiency, reduce costs, and streamline the trading experience.

The features include the implementation of a new contract architecture for pools. In previous versions, each pool was held in a separate contract. But PancakeSwap V4 consolidated all pools into a single contract.

Per the announcement,

“This innovative approach not only simplifies pool creation but also delivers substantial gas savings, with early estimates suggesting a remarkable 99% reduction in pool creation gas costs.”

Moreover, the team introduces a “flash accounting” system to complement this singleton architecture.

Traditional methods involve transferring assets in and out of pools after every swap. However, the flash accounting system operates on net balances, producing a more efficient and cost-effective process.

“By minimizing unnecessary token transfers, PancakeSwap V4 significantly reduces gas consumption, leading to tangible benefits for users,” the DEX said.

Furthermore, PancakeSwap V4 introduced enhanced fee tier flexibility, enabling pool creators to customize fee structures according to their specific needs.

Additionally, it reintroduced native ETH support to enhance gas savings further.

Finally, with the incoming Ethereum Cancun hard fork, PancakeSwap is considering the adoption of EIP-1153.

The proposal introduces “transient storage” for additional gas improvements and cleaner contract designs.

Last week at PancakeSwap

– Largest DEX by 24h trading volume
– v3 daily + weekly volume ATH: Base, Ethereum & BNB Chain
– Perpetual monthly volume ATH (Feb)
– The sixth consecutive month of CAKE total supply reduction, -1,372,017 CAKE
– Announced ETH London Event Attendance

— PancakeSwap v4Your DEX Your Innovation (@PancakeSwap) March 11, 2024

Hitting Nearly $11 Billion in Weekly Sales

Currently, the total 24-hour trading volume for DEXes stands at $8.788 billion, according to DefiLlama.

Total 7-day trading volume is $67.15 billion, with a +26.35% weekly change.

Over the past week, PancakeSwap’s volume increased by nearly 74% to $10.705 billion.

Its daily volume is $1.339 billion.

Both in the 7-day and 24-hour periods, PancakeSwap is in second place, behind Uniswap.

Moreover, looking at the cumulative volume, Uniswap is in first place with $2.371 trillion, while PancakeSwap is in third place with $677.531 billion.

Meanwhile, the project reported that its total volume in February was $15.8 billion, up $351 million from $15.5 billion recorded in January.

The average daily volume last month was $545.4 million.

Additionally, it had 1.7 million unique traders.

Meanwhile, it burned 1,079,517 CAKE in February.

At the time of writing, CAKE is trading at $4.16, up 2.6% in a day, 25% in a week, and 62% in a month.

PancakeSwap February Recap

Sixth consecutive month with negative mint!
PancakeSwap Affiliate Discussion
veCAKE now Live on Base
Nemesis Downfall Beta Launch
PancakeTalks Podcast

Read more: https://t.co/5ByDNlQGN1

What's coming up next?

ETH GLOBAL… pic.twitter.com/qrTg0Ox6UG

— PancakeSwap v4Your DEX Your Innovation (@PancakeSwap) March 11, 2024

The post UPDATED: PancakeSwap V4 Denies $3 Million CAKE Airdrop appeared first on Cryptonews.

Proposal to Raise AMM Fee In LLAMMa to 1.9%

A Curve team member suggests a fee increase from 0.6% to 1.9%. If the community accepts this, borrowers leveraging the protocol will benefit. This increase will mitigate ‘soft liquidation losses’ during Ethereum gas fee spikes, enhancing the overall user experience. 

Like other public ledgers, Ethereum relies on a community of validators to approve transactions and secure the network. These validators charge a fee, payable in ETH, which varies based on the level of demand. Gas fees tend to rise whenever there’s a surge in prices and on-chain activity.

According to YCharts data, the average gas fee on Ethereum was 63.68 GWei as of March 11, an increase from around 22 GWei in early January. 

With Ethereum prices approaching $4,000 and the total value locked (TVL) in decentralized finance (DeFi) nearly $100 billion, gas fees will likely expand further. 

This Is How Curve Finance Borrowers Will Benefit

This situation will directly affect user experience and potentially lead to more soft liquidations for LLAMMa borrowers.

In the proposal, increasing the fee would create a buffer. Subsequently, this will reduce losses posted by arbitrage traders who must pay high gas fees to execute their trades.

It is not immediately clear if the proposal will be adopted and later executed. Voting is currently open and will close on March 16.

DeFiLlama data on March 11 shows that Curve Finance is one of the largest DeFi giants. It manages over $2.9 billion of assets and is the 13th largest, trailing others like Uniswap and EigenLayer. While most are on Ethereum, a significant portion is managed on Arbitrum, a layer-2 scaling platform.

The post Curve Finance Plans to Increase AMM Fee, But For Good Reasons appeared first on Cryptonews.