Autor Cointelegraph By Prashant Jha

Experts weigh in on the Ethereum vulnerabilities after Merge: Finance Redefined

Experts weigh in on the Ethereum vulnerabilities after Merge: Finance Redefined

Uverejnil používateľ | sep 2, 2022 |

Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.The past week in the DeFi ecosystem saw major developments centered around the Ethereum Merge. Aave (AAVE) community proposed temporarily suspending Ether (ETH) lending before the Merge, citing the potential issue of high ETH utilization that may result in liquidations being hard or impossible and annual percentage yields (APYs) reaching negative figures. An industry expert shared his opinion on possible censorship vulnerabilities that the Ethereum network could eventually face in the wake of its transition to a proof-of-stake (PoS) blockchain.Moving ahead of the Ethereum Merge developments, some other major events that made headlines include Babylon Finance’s eventual shutdown after months of trying to recover from the negative momentum caused by the Rari Fuse exploit. The United States Federal Bureau of Investigation (FBI) has issued a fresh warning for investors in DeFi platforms, which have been targeted with $1.6 billion in exploits in 2022. The top 100 DeFi tokens recorded a bearish price action over the past week, with the majority trading in the red, barring a few tokens that have shown even double-digit growth.Will Ethereum 2.0 be vulnerable to censorship? Industry professional explainsThe Ethereum network will be able to withstand censorship risks both in the short and long term, according to Ethereum community member and investor Ryan Berckmans.The ban of Ethereum-based privacy tool Tornado Cash by United States authorities earlier this month left many wondering whether Ethereum transactions could also be at risk of censorship, especially after Ethereum’s imminent transition to a proof-of-stake system.Continue readingAave community proposes to suspend ETH lending before the Merge temporarilyWith the Ethereum Merge on the way, the risk research and analysis team Block Analitica proposed a temporary pause in ETH borrowing to mitigate the risks that may lead to a DeFi implosion in the Aave lending protocol during the Merge. The team pointed out the potential issue of high ETH utilization, which may result in liquidations being hard or impossible and the APY’s reaching negative figures. Furthermore, the uncertainties surrounding the Merge and a potential Ethereum proof-of-work (PoW) fork may cause liquidity providers to start a bank run, pushing utilization to even higher levels. Continue readingDeFi protocol shuts down months after the Rari Fuse hackBabylon Finance has finally announced that it will shut down after months of trying to recover from the negative momentum caused by the Rari Fuse exploit. In a statement, founder Ramon Recuero explained that the platform experienced an insurmountable negative streak despite their team’s efforts to endure the domino effect caused by the hack. According to Recuero, the protocol lost $3.4 million. Following this, the total value locked within the platform went from $30 million to $4 million. To make matters worse, the Fuse pool was abandoned, taking out a lending market worth $10 million, Recuero noted.Continue readingFBI issues alert over cybercriminal exploits targeting DeFiThe U.S. FBI issued a fresh warning for investors in DeFi platforms, which have been targeted with $1.6 billion in exploits in 2022. In a public service announcement on Tuesday, the FBI’s Internet Crime Complaint Center said the exploits have caused investors to lose money — advising investors to conduct diligent research about DeFi platforms before using them while also urging platforms to improve monitoring and conduct rigorous code testing.Continue readingDeFi market overviewAnalytical data reveals that DeFi’s total value locked registered a minor change from the past week. The TVL value was about $61.97 billion at the time of writing. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a mixed week. Even though the majority of the tokens are trading in red on the weekly charts, the price change has been minimal compared to the last week.Lido DAO (LDO) was the biggest gainer among the top 100 tokens, registering a weekly gain of 5.31%, followed by PancakeSwap (CAKE), with a rise of 1%. The rest of the other top100 tokens registered a single-digit decline over the past week.Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education in this dynamically advancing space.

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El Salvador Bitcoin bond delayed due to security concerns: Tether CTO

El Salvador Bitcoin bond delayed due to security concerns: Tether CTO

Uverejnil používateľ | sep 2, 2022 |

El Salvador, the Central American nation that adopted Bitcoin (BTC) as a legal tender in September last year, has delayed the launch of its billion-dollar Bitcoin bond again.The Bitcoin bond, also known as the “Volcanic bond” or Volcanic token, was first announced in November 2021 as a way to issue tokenized bonds and raise $1 billion in return from investors. The fundraiser will then be used to build a “Bitcoin City” and buy more BTC. The bond was set to be issued in the first quarter of 2022 but was postponed to September in the wake of unfavorable market conditions and geopolitical crises. However, earlier this week, Bitfinex and Tether chief technology officer Paolo Ardoino revealed that the Bitcoin bond will be delayed again to the end of the year.Ardoino, in an exclusive conversation with the Cointelegraph, revealed that the current delay in the launch could be attributed to the internal security issues where the nation’s security forces have had to confront the scourge of gang violence in the country. This has diverted the focus of government resources, and “The delay in the launch of the Volcano Token has to be viewed in this context.”Bitfinex is the key infrastructure partner of the El Salvador government responsible for processing transactions from the sale of Volcanic tokens. However, Bitfinex must acquire a license of issuance from the government first, which would be granted after the passing of the digital securities bill slated for September.Ardoino confirmed that the final draft of the bill is ready, and they are expecting the bill to be passed in the next couple of weeks, given President Nayib Bukele’s party holds a majority. He said: We are confident that the law will obtain approval from Congress in the coming weeks, assuming that the country has the necessary stability for such legislation to pass.”Bitfinex Securities El Salvador, S.A. de C.V. “will apply for a license to operate under the El Salvador digital securities regulatory framework once this is passed into law,” he added.While several reports and market pundits have blamed waning investor interest and the current downturn in the crypto market, Ardoino believes the idea behind the Bitcoin bond would garner investors’ interest irrespective of the market conditions. Related: El Salvador’s ‘My First Bitcoin’: How to teach a nation about cryptoHe added that the Bitcoin bond has the potential to accelerate BTC adoption. He cited the example of meme coins and explained:“When you consider that the meme coin, Dogecoin, was able to obtain a market capitalization of US$48 billion, there is clearly enough investor appetite in the digital token economy to support a $1 billion Volcano.”After making BTC a legal tender on Sept. 7, 2021, El Salvador accumulated over 2,301 BTC for roughly $103.9 million. During the bull market, the profit from the investment was even used to build schools and hospitals, however, with the current downturn in the market, that BTC holding are worth about $45 million currently.

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Tech giant Meitu loses over $43M of its crypto investment in bear market

Tech giant Meitu loses over $43M of its crypto investment in bear market

Uverejnil používateľ | sep 1, 2022 |

Hong Kong tech giant Meitu made headlines in April last year after it reported nearly $100 million in crypto holdings. However, with the advent of the bear market, the tech firm has lost nearly half of the valuation of its crypto holdings.According to a local media report, Meitu reported an impairment loss of over 300 million yuan, approximately $43.4 million, on their crypto holdings. An impairment loss is a loss in value of an asset when it falls below the carrying value of the investment.The financial filing revealed that the impairment loss has more than doubled from the last quarter, something the firm had anticipated earlier. The tech giant has said that its crypto holdings could impact the net loss of the company by the end of the first half of the year.In a July exchange filing, Meitu reported crypto holdings of about 940 Bitcoin (BTC) and 31,000 Ether (ETH), purchased for $49.5 million and $50.5 million respectively. The net crypto investment of the company was reported at about $100 million, and the firm has lost nearly half of the valuations of its investment by the end of the second quarter of 2022, owing to the current downturn in the crypto market.Related: MicroStrategy stock MSTR hits 3-month high after CEO’s exitMeitu is not the only company to incur significant losses on its crypto investments. Microstrategy, the flag bearer of public companies investing in Bitcoin, reported an impairment loss of over $900 million on their BTC holdings by the second quarter of 2022.At the peak of the crypto bull run last year, Michael Saylor-led Microstaretgy popularized the use of BTC as a treasury reserve replacing a portion of the U.S. dollar. The idea gained a lot of traction as BTC was hitting a new all-time high every month, and the likes of Tesla, SpaceX and more than a dozen public companies joined the bandwagon. However, with the advent of the bear market, Bitcoin price fell by over 70% from the top and currently trading at one-third the value of its all-tim high.

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Ethereum miner balance reaches four-year high weeks before the Merge

Ethereum miner balance reaches four-year high weeks before the Merge

Uverejnil používateľ | aug 31, 2022 |

The Ethereum Merge is slated for Sept. 15, which will see the Ethereum blockchain move from its current proof-of-work (PoW) mining consensus to proof-of-stake (PoS). The Merge is being touted as one of the biggest upgrades for the Ethereum blockchain as it would help the network move to a more energy-efficient way of verifying transactions and eliminate PoW mining completely. With the Merge date approaching, Ether (ETH) miner’s balance has touched a new four-year high.According to Oklink data, the balance of Ethereum miner addresses exceeded 260,000 ETH with a total of 261,848 ETH valued at over $415 million at the current price. Miner accumulation reached a new four-year high with similar levels seen last in April 2018.ETH Miner Address Balance Source: OklinkMiners’ growing accumulation of ETH has been attributed to a few factors, the first being anticipation of a price surge in the wake of the key upgrade. While many pundits have called the Merge a “buy the rumor and sell the news” kind of event, miners’ accumulation indicates growing bullish sentiment.Another major factor is the hard fork. The majority of the ETH miners are in favor of a hard fork to keep the PoW chain alive and continue mining. Thus, in case of a hard fork, these miners holding onto ETH would also receive an airdrop of the forked token. While the value of the forked token might not appreciate in tune with the main ETH chain, however, it would still ensure additional capital.A forked PoW token has got the backing of a few leading crypto exchanges like Bitfinex while the likes of Binance have said that if the demand for the forked token would be big enough, they would not mind listing it.Related: Top 5 misconceptions about the anticipated Ethereum upgradeYohannes Christian, Research Analyst at leading crypto exchange Bitrue, told Cointelegraph:”The ‘Difficulty Bomb’ will make mining unprofitable after the Merge. Before this happens, miners are exploring all avenues to cart away with as many Ether as they can while they still have the time.““As such, more computing resources are being committed to the mining of Ethereum and this accounts for what has translated to a very high miner balance,“ he added.The Merge has created a dilemma of sorts for the miners as the move would eliminate PoW mining completely, but keeping the PoW chain alive via a hard fork won’t guarantee an appreciation in price with the majority of the community already supporting the main PoS chain.

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Hodlnaut now placed under creditor protection after freezing withdrawals

Hodlnaut now placed under creditor protection after freezing withdrawals

Uverejnil používateľ | aug 30, 2022 |

Singapore-based crypto lending firm Hodlnaut was placed under interim judicial management, a form of creditor protection program, by the Singapore court on Aug. 29.The court orders came three weeks after Hodlnaut froze all trading activities and withdrawals on its platform citing a liquidity crisis. In an official blog post on Aug. 30, the crypto lending platform notified its users that Ee Meng Yen Angela and Aaron Loh Cheng Lee, care of EY Corporate Advisors, were appointed as interim judicial managers. The blog post read:“The Court has delivered judgment on 29 August 2022, and has been confirmed that Hodlnaut will be placed under Interim Judicial Management.”The crypto lender sought judicial management to avoid forced liquidations in the bear market. The said creditor protection program under Singapore law allows financially troubled firms to rehabilitate themselves. Under this law, the court appoints an officer called the judicial manager who takes over the charge from the company’s director for the time being. As Cointelegraph reported earlier this month, Hodlnaut cut 80% of its workforce before applying for judicial management. The firm hopes to utilize the judicial management period to restore its asset-to-debt ratio to 1:1 to allow users the ability to withdraw their initial cryptocurrency deposits.Related: Celsius bankruptcy proceedings show complexities amid declining hope of recoveryThe crypto lender informed earlier that they were exploring the option to allow users to withdraw their initial deposits with interest accrued in full before closing their accounts, which is now subject to the approval by newly appointed judicial managersHodlnaut is one among many crypto lending firms that fell prey to the crypto contagion caused by the downfall of the now-defunct TerraUSD (UST) algorithmic stablecoin. The implosion of UST led to the downfall of a $40 billion Terra ecosystem, and many crypto lending firms with exposure to UST fell eventually.

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