Značka: Cointelegraph DeFi

Finance Redefined: Vitalik bearish on cross-chain, dYdX decentralizing, Jan. 7–14

Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.Despite the market printing bearish numbers for a second consecutive week, the industry is not short of bullish fundamental news. Read on to hear about the most impactful DeFi stories of the last seven days.What you’re about to read is a shorter, more succinct version of the newsletter. For a comprehensive summary of DeFi’s developments over the last week, subscribe below.Vitalik is optimistic for multichain, not cross-chain, Web3 worldVitalik Buterin, a co-founder of Ethereum, shared a candid assessment of the security limitations in implementing fully functional cross-chain bridges within the blockchain industry.Buterin argued that storing assets on their native chain provides a higher level of security against 51% attacks than cross-chain activities, stating, “It’s always safer to hold Ethereum-native assets on Ethereum or Solana-native assets on Solana than it is to hold Ethereum-native assets on Solana or Solana-native assets on Ethereum.”My argument for why the future will be *multi-chain*, but it will not be *cross-chain*: there are fundamental limits to the security of bridges that hop across multiple “zones of sovereignty”. From https://t.co/3g1GUvuA3A: pic.twitter.com/tEYz8vb59b— vitalik.eth (@VitalikButerin) January 7, 2022Sharing a series of examples to prove his thesis, Buterin noted that if a malicious entity attempted to launch a 51% attack on Ethereum, a transaction undertaken by an innocent party could be censored and/or reverted, but not blocked and not lost.In the most extreme cases, users’ funds would remain safe even if 99% of the protocol was compromised because nodes would overwhelmingly support the remaining 1% rule-following blocks and, therefore, govern the decision-making.In contrast, an incident of this kind operating on a cross-chain bridge between Ethereum and Solana, for example, would result in irreversible losses, Buterin argues. The problem compounds with the addition of chains.Let’s suppose a 51% attack occurs on a single of 50 chains. In that case, all of them become vulnerable in what he describes as a “systemic contagion that threatens the economy of that entire ecosystem.”dYdX strives to full decentralization in late 2022dYdX, the layer-two derivatives protocol, published the fourth iteration of its roadmap this week, presenting plans to develop the platform into an open-source, community-centric and fully decentralized operation later this year.The architecture operates on a dual-model in which sections of the protocol, such as staking and governance, are decentralized, while core functions such as the off-chain order book and matching engine are controlled by an in-house subsidiary, dYdX Trading Inc and supported by centralized servers such as Amazon Web Services.“There will no longer be central points of control or failure of the protocol,” representatives from the company stated following the v4 upgrade, assuring that “all aspects of the protocol that can be controlled will be fully controlled by the community.”Last month’s Amazon Web Service (AWS) technical outage highlighted the true vulnerabilities of a number of crypto businesses, including dYdX, Binance.US and Coinbase, and their inherent reliance on centralized servers to maintain the network.At the time, dYdX shared a sincere update on its official Twitter account and pledged to seek an unequivocal solution to this matter, stating:“Unfortunately, there are still some parts of the exchange that rely on centralized services (AWS in this case). We are deeply committed to fully decentralizing, and this remains one of our top priorities as we continue to iterate on the protocol.”Alongside its aspirations for decentralization, dYdX is also pursuing improvements to its interface trading platform, introducing spot, margin and synthetic trading opportunities, as well as appointing an external auditor to appraise business operations.Near Protocol raises $150 million to accelerate Web3 adoptionProof-of-stake blockchain Near Protocol raised $150 million in seed investment this week to enhance the awareness and adoption of Web3 applications within its network, with an inherent focus on expanding its audience and community base to the regions of Latin America, Turkey and India.The capital raise was led by renowned hedge fund Three Arrows Capital and was further participated by Mechanism Capital, Dragonfly Capital and Andreessen Horowitz’s Silicon Valley-based fund a16z. Individual angel investors included British billionaire hedge fund manager Alan Howard and Aave founder Stani Kulechov.In a Medium blog post, Near Foundation CEO Marieke Flament shared her optimism on the latest funding, around which succeeds the previous total of $65.9 million raised by the company:“We are delighted to have such a fantastic list of backers supporting NEAR’s mission. We are looking forward to leveraging the funding to improve access to blockchain technology in an ever-growing list of countries across the world.”In October 2021, the smart contract platform allocated $800 million for new initiatives within the decentralized finance (DeFi) space, such as developer applications, startup grants and geographical fund pots.Token performances Analytical data reveals that DeFi’s total value locked slightly decreased by 2.77% across the week to a figure of $128.15 billion, continuing along with the wider market decline.Data from Cointelegraph Markets Pro and TradingView reveals that DeFi’s top 100 tokens by market capitalization have mainly been bullish over the last seven days.Secret (SCRT) took the lead for a second week with 15%. Terra (LUNA) rose by 6.32%, while 1inch Network (1INCH) posted gains of 2.9%.Interviews, features and other cool stuffThanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.

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Finance Redefined: Terra expanding UST and LUNA, and Aave Arc seeks institutional adoption, Dec. 31–Jan. 7

Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.The new year is upon us, and the expectations for DeFi innovation, utility and mainstream adoption are greater than ever. Read on to hear about the inaugural stories of 2022.Reading this article, you’re only receiving a portion of the content from our DeFi newsletter. Drop your email below for the full copy.Terra Research proposes new utility for TerraUSD and LUNADecentralized algorithmic stablecoin issuer Terra published an ambitious proposal via its research team this week to expand the interchain deployment of its TerraUSD (UST) stablecoin across five projects on Ethereum, Polygon and Solana.Titled “UST Goes Interchain: Degen Strats Part Three,” the lengthy governance post extensively detailed the methods and procedures in which Terra’s native token, LUNA, and $139 million of TerraUSD (UST) could be deployed to “bring awesome UST use-cases to Ethereum DeFi.”In the proposed strategy, which has gained 3,500 views and six replies from community members who self-titled themselves Lunatics, Terra would deposit between $250,000 and $50 million in UST in a bid to boost the stability of each of the new partner projects. It is expected that a community-led governance vote will occur in the near future to determine confirmation. DeFi liquidity provider and market maker Tokemak would receive $50 million in UST for a maximum of six months, and lending and borrowing platform Rari Fuse would receive $20 million in UST across the same period. Yield aggregator Convex Finance would receive $18 million, while OlympusDAO would get $1 million in UST bonds and $425,000 in LUNA incentives for three months.The distribution of UST across a plethora of projects will support Terra in accelerating quantitative ambitions such as that of its market capitalization within the stablecoin market. At the time of writing, Tether’s USDT leads the way with approximately $78 billion, with Circle’s USDC in second place with $43 billion, followed by Binance’s BUSD at $14 billion, and finally UST, with a market cap of $10 billion.“Bond $1m UST with Olympus and 3,3 the OHM forever”https://t.co/eCDH9fG0Wt— OlympusDAO (@OlympusDAO) January 6, 2022In a recent tweet, Terra founder Do Kwon divulged his ambitions to propel the network native asset UST to the forefront of the stablecoin market, ahead of stalwarts USD Coin, Tether and Binance USD (BUSD), among others. Related: Terra (LUNA) hits record $20B TVL, surpassing Binance Smart ChainNew service Aave Arc aims to enhance institutional adoption in DeFiDecentralized lending platform Aave (AAVE) announced the launch of its permissionless lending and liquidity pool, Aave Arc, this week with the ambition of fostering greater institutional participation in fully regulated and compliant decentralized finance services. Thirty organizations were granted primary whitelist entry to the service, including digital asset custodian Fireblocks, alongside Anubi Digital, Canvas Digital, SEBA Bank, GSR and crypto yield aggregator Celsius.Following the successful completion of prerequisites such as Know Your Customer and Anti-Money Laundering protocols, these firms will gain exclusive access to “securely participate in DeFi as liquidity suppliers and borrowers” in a market that has soared 10 times in total value locked over exactly 12 months — from $30 billion to $300 billion.Aave CEO and founder Stani Kulechov shared remarks on the potential for the expansion of the DeFi market with the implementation of this new service, stating:”DeFi represents a powerful wave of financial innovation including transparency, liquidity, and programmability–and it’s been inaccessible to traditional financial institutions for far too long. The launch of Aave Arc allows these institutions to participate in DeFi in a compliant way for the very first time.”Related: Without staking, institutional crypto investors cannot escape inflationWonderFi acquires parent company of Bitbuy for $162MDeFi platform WonderFi Technologies agreed to purchase First Ledger Corp, the parent firm of the first regulated crypto exchange in Canada, Bitbuy, this week for an impressive $162 million in a bid to expand the presence of cryptocurrency and DeFi across the country. Backed by renowned billionaire investor Kevin O’Leary, WonderFi detailed its method of funding the takeover through the issuance of 70 million new shares, paying $15.7 million in upfront cash in addition to $23 million in deferred cash via a vendor-take back note due in 12 months. Alongside this, the team stated that it was going to “retain substantially all current Bitbuy employees and enter into employment agreements with key members of the management team.”Established in 2016, Bitbuy became licensed by the Ontario Securities Commission as a fully regulated crypto exchange in Canada after last November. The platform has over 375,000 users who have transacted more than $3.4 billion. In May 2020, the Toronto-based exchange launched the world’s first 1:1 Bitcoin deposit insurance scheme for its customers. Commenting on the importance of licensed marketplaces within the digital asset ecosystem, WonderFi CEO Ben Samaroo stated:“The integration of Bitbuy’s product suite will accelerate and expand the reach and scope that WonderFi can offer to the market, and will drive long-term growth and value for the company.”Related: Kevin O’Leary says his crypto holdings could reach 20% of his portfolioToken performances Analytical data reveals that DeFi’s total value locked slightly decreased by 6.5% across the week to a figure of $131.8 billion, largely in line with the overall market downturn.Data from Cointelegraph Markets Pro and TradingView reveals that DeFi’s top 100 tokens by market capitalization have mainly been bullish over the last seven days.Secret (SCRT) took the lead this week with 26.6%. Chainlink (LINK) grew by 24.2%, while Fantom (FTM) almost exactly replicated last week’s gains with a further rise of 23.4%. Yearn.finance (YFI) and Dai — yes, the stablecoin — claimed fourth and fifth places this week with 8.2% and 0.03%, respectively. Interviews, features and other cool stuffThanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.

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Airdrop culture could pose integral threat to DeFi industry

EtherWrapped, a project designed to provide a yearly summary of users nonfungible token (NFT) activity, launched a little over eight hours ago to palpable fanfare within the crypto community. The website detailed a plan to airdrop YEAR tokens based upon quantitative engagement statistics in users’ MetaMask wallet, or in simpler terms, their number of transactions, volume traded and gas fees, among other data.Upon verification on EtherScan, a number of well-regarded developers and engineering experts in the space assessed the coding of the smart contract. Meows.eth noted that these parties saw a “presence of a function titled _burnMechanism,” but concluded that it was merely a harmless error by the seemingly amateur creator.What we noticed during a brief pass was the presence of a function titled _burnMechanism.This function looked innocent enough, it would fail if you attempted to interact with the contract owner.What myself and others missed is how might one weaponize it for evil. 7/ pic.twitter.com/CthmAw3a2A— meows.eth (@cat5749) December 31, 2021However, unbeknown to all, the creator of the contract maliciously planted this flaw in order to administer the “revokeOwnership” function soon after, designating ownership to themselves and subsequently orchestrating a honeypot scenario in which users could only buy, not sell, the asset.Consequently, those who had connected their wallet and received the airdropped token witnessed their asset soaring in value, and as such, fuelled by the alluring propensity of fear of missing out (FOMO), were incited into purchasing more on the secondary Uniswap V2 market.It must be stated, the action of interacting with the contract or claiming the token did not result in losses, but rather the ensuing investments into the YEAR asset on decentralized exchanges.According to EtherScan, the malicious entity was able to siphon 59.7 Ether (ETH) from the scam, equivalent to $225,000 at current prices. In addition to this, the Uniswap V2 contract registered $6.8 million in daily trading volume.Although not a vast amount in the wider context of DeFi’s $139 billion in total value locked (TVL), the incident does highlight the critical importance of reviewing and verifying the authenticity and contractual diligence of newly formed smart contracts prior to connecting Web 3.0 wallets.Related: Recounting 2021’s biggest DeFi hacking incidentsDecentralization, often in the form of financial distribution, is one of the fundamental principles of Web 3.0. Whereas the previous iteration of the internet curtailed power to centralized Silicon Valley behemoths, Web 3.0 promises to grant power to the people.Last year, a panoply of decentralized finance projects, including UniSwap, dXdY, ParaSwap, and others, successfully deployed native assets — many of which were valued at tens of thousands of dollars — to members of their community in a bid to advance the development of their ecosystem.Last month, ENS become the latest project to showcase the genuine potential for governance models, and more recently, OpenDAO’s SOS token and GasDAO’s GAS token were allocated to those who registered trading activity on leading NFT marketplace OpenSea, and those who spent at least $1,559 of ETH on transactional fees.Now, while these projects are legitimate innovations with openly-documented roadmap objectives, the growing prevalence of such airdrops — especially their inflated speculation and outlandish early-expectations for projects just emerging from the cryptographic womb — could become the catalyst for a trend of rug pulls, Ponzi schemes, and pump & dump projects which pursue short-term monetary gains, akin to the ICO token era of 2017.Although a handful of the assets launched during the initial coin offering (ICO) craze became successful, a vast number experienced catastrophic falls from financial grace, tarnishing the integrity and confidence of the entire cryptocurrency space, as well as fueling the often contemptuous mainstream narrative.Feels like we’re back to the good old ICO token days. But instead of white papers we now get airdrops and rugs.What a great way to end the $YEAR— richerd.eth ᵍᵐ (@richerd) December 31, 2021

Looking ahead, circulating rumors of potential MetaMask and OpenSea tokens are cultivating optimism for the construction of a truly decentralized and community-centric Web 3.0 industry. Whether this technological utopia becomes reality amid the motivations of venture capitalists and tech giants is another matter of debate.The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Finance Redefined: Polygon fixes $24B bug, Hoskinson optimistic for Cardano in 2022, Dec. 24–31

Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.As the calendar year comes to an end, Cardano’s personable leader Charles Hoskinson shares a message of optimism, unity and collaboration for the future of crypto.As a gesture of goodwill for the holiday season, this week our long-form DeFi newsletter will be published in full here as an article alongside the regular email. Subscribe below for full access to next week’s edition!Polygon fixes potential billion-dollar protocol vulnerability Layer-two protocol Polygon announced this week the rectification of a potentially multi-billion-dollar vulnerability in its proof-of-stake Genesis contract through implementing an Emergency Bor Upgrade to the mainnet.The incident and subsequent upgrade took place at the beginning of December. If compromised to the fullest extent by a malicious entity, the vulnerability could have resulted in almost $24 billion in financial losses, equating to 92.7% of the network’s native MATIC tokens and effectively causing imminent demise.All you need to know about the recent Polygon network update.✅A security partner discovered a vulnerability✅Fix was immediately introduced✅Validators upgraded the network✅No material harm to the protocol/end-users✅White hats were paid a bounty https://t.co/oyDkvohg33— Polygon | $MATIC (@0xPolygon) December 29, 2021According to a recent blog post from Polygon, two good-willed whitehat hackers, Leon Spacewalker and Whitehat2, discovered the incident on Dec. 3 and Dec. 4, respectively, alerting blockchain security platform Immunefi.Following procedural investigation and authentication from Immunefi, the information was passed to Polygon, which upgraded the network on Dec. 5, albeit a hacker was able to drain 801,601 MATIC ($2.04 million) before the bug was resolved. Polygon co-founder Jaynti Kanani emphasized the network’s ability to promptly resolve the critical bug, noting in a blog post that:“What’s important is that this was a test of our network’s resilience as well as our ability to act decisively under pressure. Considering how much was at stake, I believe our team has made the best decisions possible given the circumstances.”Leon Spacewalker is set to be rewarded a cool $2.2 million in stablecoins for their efforts, while the second anonymous hacker, Whitehat2, will pocket $1.27 million in MATIC tokens directly from Polygon.Related: Here’s how Polygon is challenging the limitations of Ethereum, as told by co-founder Sandeep NailwalCardano founder Charles Hoskinson predicts DeFi “greater extinction”This week, in an end-of-year YouTube live stream titled “DApps and Cardano DeFi Alliance,” Cardano founder Charles Hoskinson spoke candidly about the emerging landscape of DeFi projects and creators on Cardano in addition to advising participants about the volatile nature of exponential markets. “It’s very hard to do this kind of engineering and to do it right, with an eye and foresight for the future. Unfortunately, many of the projects in this space will not stand the test of time. It’s just a fact that we will see a great extinction occur in the next five to 10 years.”Broadcasting with evident enthusiasm from “warm sunny Colorado” — a location which he humorously describes as “always warm, always sunny, sometimes Colorado” — Hoskinson predicted a big year ahead for the cryptocurrency space and his beloved Cardano.The “only thing that holds us back is us,” he said before exclaiming that empathetic and friendly collaboration is a fundamental component to productive dialogue and progress toward our shared pursuit of a more prosperous financial future.[embedded content]Following the successful launch of Cardano’s smart contracts in September through the Alonzo hard fork, the project has come under scrutiny for tedious developments on its roadmap. Despite this, Hoskinson believes that the user count will exceed 10 times the current 2 million in 2022 because of the vast demand within the nonfungible token space. Alongside this, Hoskinson introduced the Cardano DeFi Alliance, an initiative that seeks to construct an open-source library of resources, tools, services and best practices to cultivate the growth of the entire DeFi ecosystem.Related: Cardano’s ADA price eyes 30% rally with a potential ‘triple bottom’ setupHuobi Research predicts rise in play-to-earn games in 2022Huobi Research, the research arm of crypto exchange Huobi, has identified GameFi — which refers to the combination of gaming and decentralized finance — as an emerging trend based on its quantitative analysis of on-chain data.In an extensive blog post, Huobi detailed GameFi projects’ sharp increases in user activity and volume transacted since June, stating “DApp rankings show that five of the top nine apps are GameFi apps.” Further, “as of early December [2021], GameFi’s weekly active users have reached 9.21 million, a record high.”Thanks @Cointelegraph for covering the report.Read it ➡️https://t.co/MnG14w5KNW https://t.co/mzFggnLp0z— Huobi Research (@Huobi_Research) December 30, 2021

The researchers noted that these games differ from traditional games, such as World of Warcraft, across three distinctive categories: free trading of game materials, free trading and pricing of game currencies, and protection of property rights.Huobi Research argues that GameFi’s ability to “significantly reduce transaction fees for gold farming,” a term used to denote the conversion of in-game tokens to real-world currency, is the primary reason for its heightened financial appeal:“In GameFi, the owners have the right to decide whether to sell certain resources or not, which lifts the degree of user independence and stimulates market competition, thus saving transaction costs.”Additionally, developers in the GameFi space have the advantage of deploying private property rights via nonfungible tokens at a lower cost: “This not only is a comparative advantage that traditional game developers never had, but also reflects the intrinsic value of blockchain technology in the gaming industry,” the firm stated.Related: Korean government tells Apple and Google stores to take down P2E gamesToken performances Analytical data reveals that DeFi’s total value locked has decreased by 1.8% during the week to $140 billion, seemingly slowing down for the holiday season.Data from Cointelegraph Markets Pro and TradingView reveals that DeFi’s top 100 tokens by market capitalization have mainly been bullish over the last seven days.SushiSwap (SUSHI) took the lead this week with 42% gains. Oasis Network (ROSE) blossomed 37.5%, while Fantom (FTM) grew 26.1%. Gnosis (GNO) and PancakeSwap (CAKE) claimed fourth and fifth places this week with 25.4% and 3%, respectively.Interviews, features and other cool stuffThanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space. Happy New Year!

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Finance Redefined: Binance leads $60M Multichain funding, Interlay raises $6.5M, Dec. 17–24

Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.As the crypto community filled its crypto stockings for the holiday season, the Grinch emerged to gift a grimacing fate to two DeFi platforms, stealing their festive spirit and a whole lot of dollars. Reading this article, you’re only receiving a portion of the content from our DeFi newsletter. Drop your email below for the full copy.Binance VC arm leads $60M round in cross-chain protocol MultichainBinance Labs, the venture capital side of global crypto exchange Binance, facilitated a $60-million capital funding raise for cross-chain router protocol Multichain. Other notable participants included Sequoia China, IDG Capital and Three Arrows Capital.Amid Multichain’s corporate rebrand from AnySwap last week, analytical estimates place the protocol’s total value above $5 billion, as well as reporting over 300,000 users on the platform. The funds raised will be utilized across various domains, including research and development of crypto algorithms, audits, security, and general ecosystem growth.In addition to the capital support, Binance has also pledged to develop a broader relationship with the protocol, announcing that Multichain will be officially recommended as a tool to bridge bToken across chains through Binance’s smart contract platform, the Binance Smart Chain (BSC).BSC expressed high praise of Multichain, noting that it is “one of the biggest routers on BSC.” Zhaojun, a co-founder of Multichain, stated that the protocol connects “more public blockchains and crypto assets than anyone else, with lower transaction fees, shorter bridging time and higher security levels.”Thanks Binance Smart Chain @BinanceChain for promoting #Multichain as officially recommended bridge#Multichain’s top priority is to guarantee the security of on-chain assets https://t.co/CEocRygXzq— Multichain (Previously Anyswap) (@MultichainOrg) December 20, 2021Related: Binance to launch $1B fund to develop BSC ecosystemInterlay raises $6.5M to accelerate Bitcoin DeFi interoperabilityDeFi infrastructure startup Interlay announced a $6.5-million Series A funding round led by venture fund DFG Capital with additional participation from Hypersphere and Nexo Finance, among others.The funding is set to support the construction of DeFi applications cross-chain to Ethereum, Cosmos and Polkadot, as well as onboard new developers to the team.Interlay was designed to enhance the interoperability of crypto assets such as Bitcoin (BTC) to networks that typically facilitate DeFi activity such as Ethereum and Polkadot, a vision that the Web3 Foundation understood when it invested in the platform via a grant in March 2020.Interlay’s core product, a Bitcoin-backed digital asset titled InterBTC, can be utilized within the Polkadot ecosystem for various DeFi activities such as yield farming, lending and acting as a collateral asset. Tokenizing a Bitcoin derivative opens the possibility of greater utility for the asset in comparison to the functional capacity of the Bitcoin network.Speaking on the funding raise, James Wo, founder and CEO of DFG, stated that Interlay’s solution would “expand the cross-chain possibilities for Bitcoin” before tweeting:We are glad to lead the recent round of @InterlayHQ I believe what they do is very fundamental to the Polkadot ecosystem. If they gain 1% of BTC to use InterBTC, that’s $9 billion! @DFG_OfficiaI @inter_btc $DOT https://t.co/phFpVXeG0L— James Wo (@realjameswo) December 21, 2021

Related: Crypto interoperability evolves: From blockchain bridges to DeFi transfersBent Finance and Grim Finance exploited for multi-millionsDeFi protocol Grim Finance reported over $30 million in losses this week after an “external attacker” gained access to the protocol’s vault contract via five reentrancy loops. This made it the sixth platform to encounter a security breach in the month of December, following high-profile hacks such as BadgerDAO’s $120 million loss.In a damning explanatory tweet thread, DeFi security service RugDoc stated that Grim Finance’s largest mistake was not implementing a reentrancy guard on the before-after pattern in the protocol’s smart contract coding. Another mistake was granting the user “more privilege than is necessary” in enabling them to choose the preferred deposit token. RugDoc further explained:“Hopefully, all projects can draw lessons from this incident that there is much knowledge most experienced solidity devs have at hand. If you haven’t acquired this yet, don’t build multi-million dollar projects. Don’t get audits from companies which everyone knows are useless.”Similarly, fellow DeFi platform Bent Finance, known for its capabilities of staking and yield farming, also suffered a malicious exploit this week to the tune of 440 Ether (ETH), or just above $1.6 million at the time of writing.1/ There was an exploit from the bent deployer address, it added balance of cvxcrv and mim to an address on an unvierifed update 20 days ago. We just discovered this today. There are multiple members on this team and we will make this right.— Bent Finance (@BENT_Finance) December 21, 2021

Related: Crypto Could Save Millennials From the Economy That Failed ThemToken performances Analytical data reveals that DeFi’s total value locked has increased 15.74% across the week to a figure of $142.58 billion, engulfing the losses printed in last week’s market downturn.Data from Cointelegraph Markets Pro and TradingView reveals DeFi’s top 100 tokens by market capitalization have mainly been bullish over the last seven days.Yearn.finance (YFI) registered two weeks of gains with 53.28%. Terra (LUNA) rose 36.6%, while Aave printed gains of 34.2%. Curve DAO Token (CRV) and Compound (COMP) claimed fourth and fifth places this week with 28.6% and 15.4%, respectively.Interviews, features and other cool stuffThanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.

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Finance Redefined: 83% of 7-figure Millennials own crypto, Sen. Warren criticizes DeFi, Dec. 10–17

Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.As the market attempted to recover from last week’s pummeling, decentralized finance (DeFi) was once again the topic of discussion in high-profile U.S. governmental offices. Read on to learn more about this news and much more from the world of decentralized finance.What you’re about to read is the smaller version of this newsletter designed for brevity. For the full version of DeFi’s developments over the last week, drop your email below.Senator Warren warns about supposed DeFi dangersSenator Elizabeth Warren publicly scrutinized the decentralized finance sector this week in a hearing with the Senate Banking Committee.Speaking on the topic of “Stablecoins: How Do They Work, How Are They Used, and What Are Their Risks,” Warren conversed with Alexis Goldstein, a regulatory expert on financial matters, on the intricacies of stablecoin transactions, including Tether (USDT) and USD Coin (USDC) and whether the former has genuine one-to-one dollar backing.Following this, the former Democratic presidential candidate questioned Hilary Allen, a professor at the American University Washington College of Law, on whether a run on stablecoins could potentially endanger the country’s financial system.In response, Allen argued that stablecoins runs, in which speculators of the asset sell on mass, would be akin to that witnessed in money market mutual funds and foreign exchange markets and, therefore, could have wide-ranging consequences for the DeFi ecosystem.In closing, Warren stated, “DeFi is the most dangerous part of the crypto world,” adding:“I don’t think DeFi can grow without stablecoins. I think it would struggle. Right now, I think DeFi is contained to the point where it won’t impact financial stability, but if it grows, I think there’s a real threat there, particularly if it becomes intertwined with our traditional financial system.”Warren’s track record in commenting on the cryptocurrency space follows a consistently predictable pattern that largely insinuates illicit activity within the market, alongside advocacy for robust consumer security in light of sparse regulation.In June this year, she spoke dramatically about the emergence of central bank digital currencies (CBDC), stating that cryptocurrencies have “created opportunities to scam investors, assist criminals, and worsen the climate crisis” and that a positive solution could be a centralized, federally-backed U.S. digital dollar.Around the same time as the hearing, Warren became embroiled in an argument with tech titan Elon Musk, accusing the maverick CEO of “freeloading” off the general public after reports emerged about tax contributions among the country’s top earners. Verbal insults were exchanged back and forth between the pair on various mediums, including Twitter.Please don’t call the manager on me, Senator Karen — Elon Musk (@elonmusk) December 14, 2021Related: Elizabeth Warren compares ‘bogus’ crypto to ‘legitimate’ CBDCs in senate hearing$33.5 billion trapped in Ethereum Beacon Chain contractAn Ethereum Beacon Chain staking contract containing 8,641,954 Ether (ETH), equivalent to $33.5 billion, was discovered to be inaccessible this week without the action of a hard fork, an event in which the details have yet to be finalized. The Beacon Chain is the inaugural development in Ethereum’s transition to a proof-of-stake mining consensus. One of the prerequisites for becoming a validator on Ethereum 2.0 is to stake at least 32 ETH in the contract. Therefore, a short-term situation has arisen whereby vast sums of capital are stored in a contract that cannot be spent or transferred out. Once the merger of the Beacon Chain into the Ethereum mainnet is finalized, the transition to Eth2 will be complete. Following this, the hard fork details are expected to be drawn up, creating a solution to what is currently a dormant contract. Related: Small Ethereum investors increase exposure as ETH loses $4K levelNew study finds that 83% of Millennial millionaires own cryptoA survey reported by U.S. news broadcaster CNBC has revealed fascinating insights into the financial portfolios of Millennial millionaires, concluding that a large majority of individuals have invested in the nascent cryptocurrency markets and are expecting to continue doing so for the foreseeable future.Conducted by Spectrem Group, the survey polled investors with assets in excess of $1 million and found that 83% of them had made crypto investments in their lifetime and that 53% of respondents hold 50% or more of their portfolio in the digital asset market.George Walper, president of Spectrem Group, noted that traditional organizations have largely failed to recognize the interest from Millennials in the digital economy, stating:“I’m not sure the wealth management industry has recognized that they need to think of these as completely different generations. Most firms were hoping to ignore it. But millennial millionaires are not going to just grow out of crypto.”Related: Crypto Could Save Millennials From the Economy That Failed ThemToken performancesAnalytical data reveals that DeFi’s total value locked has decreased 13.51% across the week to a figure of $122.89 billion.Data from Cointelegraph Markets Pro and TradingView reveals DeFi’s top 100 tokens by market capitalization are mostly bearish across the last seven days.Yearn.finance (YFI) grew a healthy 33.56%. Avalanche (AVAX) rose 22.03%, while Curve DAO Token (CRV) posted gains of 11%. PancakeSwap (CAKE) and Oasis Network (ROSE) claimed fourth and fifth places this week with 8.48% and 5.6%, respectively.Interviews, features and other cool stuffThanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.

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Finance Redefined: AWS turns crypto exchanges offline, and Sushi CTO resigns, Dec. 3–10

Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.Although the markets may be down and technical indicators built upon AWS malfunctioning, fear not young degens, fundamental news and the spirit of Wagmi is abundant as ever. So, read on and discover all you need to know about the most important events of this week.What you’re about to read is a shorter, more succinct version of the newsletter. For a comprehensive summary of DeFi’s developments over the last week, subscribe below.AWS outage highlights the need for truly decentralized exchanges.An Amazon Web Service outage this week produced significant cascading effects on the global supply chain and delivery industry, as well as hours-long operational disruptions to decentralized exchange dYdX and leading centralized exchanges Binance.US and Coinbase.AWS is the world’s largest cloud service infrastructure, which provides an array of services, including network servers, storage capacities, remote computing and mobile development, to name a few.According to data published this year by Synergy Research Group, the tech titan holds a 33% share of the cloud infrastructure market, followed by Microsoft and Google with 20% and 10%, respectively.Details on the incident were largely undisclosed; however, it was stated on the company’s service health page that “multiple AWS APIs in the US-EAST-1 Region,” located in Northern Virginia, were experiencing connectivity issues.In a Twitter statement shared on Tuesday, and into the early hours of Wednesday, dYdX spoke about enhanced latency across the network, as well as website loading failures, before disclosing its overreliance on the centralized servers, one of which is AWS.Unfortunately, there are still some parts of the exchange that rely on centralized services (AWS in this case). We are deeply committed to fully decentralizing and this remains one of our top priorities as we continue to iterate on the protocol. We apologize for this outage.— dYdX (@dydxprotocol) December 8, 2021Analytical data from DappRadar reveals that dYdX is the 13th largest decentralized finance application built on the Ethereum Network, registering approximately $1.5 billion in daily trading volume. In September this year, dYdX achieved a historic transactional milestone in surpassing the volume of Coinbase over the course of a single day, with $4.3 billion in comparison to $3.7 billion.Decentralization is understood by many early crypto adopters to be a core component of the industry’s architecture. Alongside security and scalability, the former makes up the so-called blockchain trilemma, a concept coined by Ethereum co-founder Vitalik Buterin, to denote the necessity to sacrifice one side of the triad to experience the benefits of the other two.In the world of crypto exchanges, many opt to prioritize security and scalability in pursuit of mass adoption but, therefore, operate with largely centralized, Web 2.0-like structures.Related: Decentralization vs. centralization: Where does the future lie? Experts answerJoseph Delong wraps up time as SushiSwap CTOSushiSwap chief technology officer Joseph Delong, announced his immediate departure from the decentralized exchange this week, pledging to honorably pass the proverbial baton onto the next leader, alongside necessary accounting and information data.Delong explained the reasoning behind his decision in a candid Twitter thread, citing internal conflicts and a lack of unified vision for the project, stating:​​“I wish Sushi the best and am saddened that Sushi is so imperiled within and without. The chaos that is occurring now is unlikely to result in a resolution that will leave the DAO as much more of a shadow than it once was without a radical structural transformation.”Delong has experience working in the Web 3.0 space as a blockchain engineer and developer. Formerly employed as a senior software engineer at ConsenSys, Delong took up the position of chief technology officer at SushiSwap at the beginning of 2021 following Chef Nomi’s infamous exodus in the months prior.Over the past year, Delong has guided SushiSwap to the 12th ranked position in nominal total value locked value (TVL) with $2.85 billion but also suffered obstacles with stringent whitelisting acceptance on layer-two protocol Optimism, as well as a $3-million supply chain exploit on launchpad MISO and, more recently, a rumored vulnerability in its smart contracts to the value of $1 billion.Related: SushiSwap denies reports of billion-dollar bugCoinbase opens cryptography library to promote innovationOne of the leading cryptocurrency exchanges, Coinbase, this week announced the launch of an open-source library-themed platform, titled Kryptology, designed to provide developers with a suite of “secure, audited, and easy-to-use application programme interfaces (APIs).”In an official blog post, Coinbase outlined its intentions for the library in fostering the continued development of this long-standing technology:“While enabling further innovation is our primary goal, we also aim for Kryptology to elevate the standard for what is considered to be a robust, usable cryptographic library.”Related: Coinbase announces support for hardware wallets, starting with LedgerToken performances Analytical data reveals that DeFi’s total value locked has decreased 11.3% across the week to a figure of $143.95 billion.Data from Cointelegraph Markets Pro and TradingView reveals DeFi’s top 100 tokens by market capitalization exceeding bearish across the last seven days.Terra (LUNA) was the sole gainer of the top 100 this week with a mere 1.81%. Not the most memorable technical week for DeFi, let’s put it that way, but unsurprising considering the wider context of the crypto-wide market pullback.Interviews, features and other cool stuffThanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.

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