DeFi

Top News, Bitcoin and Altcoin Volatility, Major Hacks, and DeFi Investments

Published

7 months ago

17 June, 2024

Top News, Bitcoin and Altcoin Volatility, Major Hacks, and DeFi Investments

It’s been a wild week for cryptocurrency!

Bitcoin’s price went on a rollercoaster ride, soaring between $65,000 and $70,000, all thanks to a surprising turn of events with the Consumer Price Index (CPI) news. Was this a bullish sign or a bearish blow? What other factors sent shockwaves through the market? This week’s report will crack the code on these burning questions and many more.

This is information you can’t afford to miss. Dive right in.

The burning question on everyone’s mind is: “Is the crypto market in a bull run?” In recent weeks, a series of significant developments have been seen, which have strengthened the market’s position considerably. This week also brought notable fluctuations, and we’ll explore those details in this section.

Terraform Labs and Do Kwon Settle SEC Lawsuit for $4.5 Billion

In a groundbreaking development, Terraform Labs and its former CEO, Do Kwon, finalized a $4.5 billion settlement with the SEC. This agreement, enforced by a U.S. District Court, bars them permanently from the crypto sector following Terra’s $40 billion collapse.

Donald Trump Advocates for U.S. Bitcoin Mining Dominance

President Donald Trump has advocated for all future Bitcoin mining to occur within the U.S., following a meeting with Riot Platforms’ CEO Jason Les and head of public policy, Brian Morgenstern. He expressed his support for domestic mining firms on Truth Social, highlighting the strategic importance of keeping Bitcoin operations stateside.

OKX Reports Identity Theft Incidents

OKX revealed in a statement that a hacker exploited forged “judicial documents” to access the personal information of a few users, with the matter now under investigation by judicial authorities. The breach, revealed by two compromised user accounts on social media, involved the creation of new API keys following unusual risk notification SMS texts from Hong Kong.

CPI Report Sparks Market Volatility

The U.S. Consumer Price Index (CPI) remained unchanged in May, outperforming forecasts of a 0.1% increase and showing a year-over-year rise of 3.3%, slightly below the anticipated 3.4%. This news triggered a brief surge in the market; however, it later triggered significant long-liquidation.

MicroStrategy Increases Bitcoin Holdings

MicroStrategy, led by Michael Saylor, has increased its convertible senior notes offering from $500 million to $700 million, according to a recent announcement. This upsized offering will fund further Bitcoin acquisitions and general corporate affairs.

Bitcoin and Altcoin Performance Highlights

This week, Bitcoin experienced increased volatility due to two key macroeconomic factors. The Federal Reserve’s announcement after its interest rate decision and the release of the Consumer Price Index (CPI) data both led to significant fluctuations in Bitcoin’s price, pushing it close to the critical $70,000 mark. However, the price later fell.

Over the last seven days, investors continued to accumulate BTC near the dip. Japanese company Metaplanet capitalized on the bearish price movement of Bitcoin to enhance its treasury. On June 11, the firm announced that it had acquired an additional 23.25 Bitcoin, increasing its total holdings to 141.07 Bitcoin. These were purchased at an average price of $65,365.

The altcoin market also witnessed a surge in activity due to Bitcoin’s massive volatility. Purchases were not limited to Bitcoin, as Ether also saw significant buying activity among long-term holders. Julio Moreno, the head of research at CryptoQuant, reported on X that accumulation addresses acquired 298,000 Ether within 24 hours on June 12. This figure was just slightly below the record purchase of 317,000 Ether on September 11, 2023.

This week, the price of BTC reached a peak of $70,035 and dipped to a low of $65,103, ultimately reflecting a 5% decrease overall.

Crypto Dominance Shifts and Market Insights

This week witnessed dynamic movements in the crypto market, with Bitcoin asserting its dominance amidst fluctuating trends. Here’s a breakdown of the key developments:

Bitcoin Dominance Grows, Altcoins Retreat

Bitcoin’s market cap dominance rose by 0.83% this week, now standing at 55.3%. Conversely, altcoins (excluding the top 10) saw their dominance decline sharply by nearly 4% to 10.57%, reflecting a shift in investor sentiment towards BTC.

On-Chain Metrics Signal Opportunities

Cumulative Value Coin Days Destroyed (CVDD): Insights from CVDD suggest that Bitcoin may not have peaked yet, hinting at potential upward movements ahead. This analysis positions BTC favorably as a buying opportunity in the current market.

Decline in Profitable Addresses: The recent bearish volatility led to a significant drop in profitable addresses, falling from 98.82% to 91.85%. This decline has triggered increased liquidation in the Bitcoin market.

Bitcoin Price Rainbow Chart Analysis

Despite recent volatility, the Bitcoin Price Rainbow Chart indicates favorable buying opportunities during price dips. This analysis suggests a strategic entry point for investors anticipating future price increases.

Drop In Whale Interest: The whale interest for BTC price witnessed a drop this week.

Data from IntoTheBlock suggests that large transaction volume faced a drop from the peak of $54.84 billion to a low of $47 billion.

Bitcoin ETF Data Insights

Bitcoin has remained relatively stable in its price movements over the past few months, even though there has been a record $12 billion in net inflows into spot Bitcoin ETFs. This unexpected stability has caused concern among investors, especially since many analysts had forecasted a very bullish trend for Bitcoin following the launch of these ETFs.

According to Farside data, on June 10, Bitcoin (BTC) ETFs saw their first outflows since May 10, totaling $64.9 million and ending a 19-day streak of inflows. The outflows were led by Grayscale’s GBTC with $39.5 million, followed by Invesco Galaxy Bitcoin ETF (BTCO) at $20.5 million, Valkyrie’s Bitcoin Strategy ETF (BRRR) at $15.8 million, and Fidelity’s Bitcoin ETF (FBTC) with $3 million. Despite this, the net inflows for these ETFs generally remain positive.

Ticker	ETF Name	Price	Price Change	Volume
IBIT	iShares Bitcoin Trust	$37.3	-0.6 (-1.58%)	$838.92M
GBTC	Grayscale Bitcoin Trust (BTC)	$58.18	-0.96 (-1.62%)	$295.92M
FBTC	Fidelity Wise Origin Bitcoin Fund	$57.25	-0.88 (-1.51%)	$398.52M
ARKB	ARK 21Shares Bitcoin ETF	$65.42	-1.09 (-1.64%)	$133.01M
BITB	Bitwise Bitcoin ETF	$35.69	-0.58 (-1.60%)	$56.32M

Bitcoin ETFs experienced over $226 million in net outflows on Thursday, marking the third day of withdrawals this week, a pattern similar to late April. Preliminary data from SoSoValue indicates that Fidelity’s FBTC led with $106 million withdrawn, followed by Grayscale’s GBTC with $62 million, and Ark Invest’s ARKB with $53 million in outflows. BlackRock’s IBIT was the exception, gaining $18 million. Valkyrie, Franklin Templeton, Hashdex, and WisdomTree’s ETFs saw no changes in flow. Wednesday was the week’s only day of net inflows, adding $100 million.

Bitcoin’s Technical Analysis

Bitcoin price opened this week at $69,075; however, it failed to maintain this trading range by the end of this week. On 11 June, BTC’s price dropped toward a low of $66K; however, it later surged ahead of the CPI report and FOMC meeting. As CPI came in softer than expected, Bitcoin and other assets witnessed a steep decline, with the price testing buyers’ patience around $65K. As of writing, BTC price trades at $66,230, declining over 0.6% in the last 24 hours.

The 20-day exponential moving average (EMA) has begun to decline, currently sitting at $67,025, and the relative strength index (RSI) has moved below the midline, suggesting that bears currently have an advantage. A drop below the $65K level might send the BTC price to test $60.1K.

For the bulls, time is critical. They need to push and sustain the price above the 20-day EMA to avert further declines. If successful, the pair could ascend towards $70,000 and possibly extend gains up to $72,000.

Top Cryptocurrency Weekly Analysis

Setting Bitcoin aside, we will now dive into other areas of the cryptocurrency market that have seen significant activity this week. This will cover detailed analyses of meme coins, AI tokens, and stablecoins, as well as a review of the week’s top gainers and losers and key blockchain activities.

Top Gainers/Losers This Week

This week in the cryptocurrency market, several tokens stood out with notable gains. Non-Playable Coin (NPC) led the pack with a remarkable 54.1% increase in its price, followed by Beldex (BDX) and Metaplex (MPLX), which rose by 30.7% and 27.3% respectively. Rocket Pool (RPL) also saw significant growth at 14.5%, showcasing its strong market presence. Rollbit Coin (RLB), while having the smallest gain among the top performers, still managed a respectable 9.2% rise.

Name	Price	Volume	7d Change
Non-Playable Coin (NPC)	$0.02583	$3,835,941	54.10%
Beldex (BDX)	$0.04459	$1,199,460	30.70%
Metaplex (MPLX)	$0.3534	$3,058,845	27.30%
Rocket Pool (RPL)	$23.79	$143,927,905	14.50%
Rollbit Coin (RLB)	$0.07031	$3,731,547	9.20%

Beercoin (BEER) led the losses with a drastic 47.7% drop, followed closely by Wormhole (W) which decreased by 35.7%. Curve DAO (CRV) also faced a tough week, declining by 32.2%. Echelon Prime (PRIME) and SATS (Ordinals) (SATS) were not far behind, recording losses of 31.7% and 30.1% respectively.

Name	Price	Volume	7d Change
Beercoin (BEER)	$0.00002305	$124,931,341	-47.70%
Wormhole (W)	$0.4582	$93,683,362	-35.70%
Curve DAO (CRV)	$0.2821	$248,640,668	-32.20%
Echelon Prime (PRIME)	$10.42	$22,090,479	-31.70%
SATS (Ordinals) (SATS)	$0.06123	$29,303,237	-30.10%

Top Memecoins Analysis Of This Week

This week in the cryptocurrency market, notable meme coins by market cap have shown varied price movements. Dogecoin (DOGE) experienced an 8.06% decline, while Shiba Inu (SHIB) saw a more substantial drop of 13.88%. Pepe (PEPE) also faced a decrease of 7.98%. Dogwifhat (WIF) recorded a 14.27% decline, marking significant volatility. The most dramatic fall was seen in FLOKI, which plummeted by 28.29%. Despite these declines, there were minor positive changes in the hourly changes, suggesting some level of trading cooldown among meme coin enthusiasts.

Name	Price	1h %	24h %	7d %	Market Cap
Dogecoin (DOGE)	$0.1362	0.59%	-4.36%	-8.06%	$19,706,421,135
Shiba Inu (SHIB)	$0.00002068	0.60%	-3.75%	-13.88%	$12,185,736,385
Pepe (PEPE)	$0.00001195	2.02%	-0.95%	-7.98%	$5,025,420,824
dogwifhat (WIF)	$2.43	0.31%	-0.41%	-14.27%	$2,422,507,273
FLOKI (FLOKI)	$0.00002057	0.92%	-2.97%	-28.29%	$1,966,723,403

Top AI Coins Analysis Of This Week

This week, top AI-related cryptocurrencies exhibited notable declines. NEAR Protocol saw the largest drop at 18.00%, while Bittensor decreased by 23.33%. Injective and Render also faced significant downturns.

Name	Price	1h %	24h %	7d %	Market Cap
NEAR Protocol (NEAR)	$5.60	-0.10%	-5.22%	-18.00%	$6,100,048,038
Render (RNDR)	$8.05	0.98%	-3.48%	-15.45%	$3,127,342,483
Injective (INJ)	$25.91	0.28%	-11.13%	-12.84%	$2,420,108,447
The Graph (GRT)	$0.2387	0.35%	-3.57%	-11.76%	$2,269,864,276
Bittensor (TAO)	$298.23	-0.71%	-6.58%	-23.33%	$2,068,294,698

Top Metaverse Tokens Analysis Of This Week

This week’s top metaverse tokens by market cap experienced significant fluctuations. Immutable (IMX) faced the sharpest weekly decline of 16.57%, while Gala (GALA) also dropped considerably by 17.22%. FLOKI saw the most severe downturn at 29.09%. In contrast, Notcoin (NOT) displayed stability with a modest weekly gain of 0.83%. Axie Infinity (AXS) declined by 14.18%.

Name	Price	1h %	24h %	7d %	Market Cap
Immutable (IMX)	$1.73	0.26%	-3.70%	-16.57%	$2,609,235,531
Notcoin (NOT)	$0.01946	-0.34%	7.68%	0.83%	$1,998,143,481
FLOKI (FLOKI)	$0.000204	-1.00%	-3.74%	-29.09%	$1,950,648,966
Gala (GALA)	$0.03305	-0.36%	-4.16%	-17.22%	$1,047,225,530
Axie Infinity (AXS)	$6.75	0.48%	-3.53%	-14.18%	$984,049,540

Top Stablecoins Analysis

This week in the stablecoin sector, Tether (USDT) continues to lead with a market cap of over $112 billion, despite slight fluctuations in trading volume. USDC and Dai showed modest changes, with market caps of approximately $32 billion and $5 billion, respectively. Notably, Ethana USDe reported a significant 51.6% increase in its market cap, highlighting growing investor interest. Conversely, First Digital USD experienced a sharp 33% decrease.

Coin	Price	24h Volume	Exchanges	Market Cap	30d Change
Tether (USDT)	$0.9988	$45,015,746,781	352	$112,403,514,928	1.30%
USDC (USDC)	$0.9998	$6,128,906,377	368	$32,355,569,902	-2.60%
Dai (DAI)	$0.999	$405,706,788	272	$5,221,305,817	-4.60%
Ethana USDe (USDE)	$1.00	$119,982,239	9	$3,516,028,181	51.60%
First Digital USD (FDUSD)	$0.9982	$5,914,936,729	23	$2,541,603,279	-33.00%

Top Blockchains Weekly Analysis

In this segment, we’ll dive into the major activities across top blockchains, examining their market dominance and total value locked (TVL). We will separately analyze layer-1 and layer-2 blockchains to offer a detailed view of current market trends and sentiments.

Dominance of L1 Chains

This week’s overview of the top layer-1 blockchains shows Ethereum leading significantly in both market dominance at 81.65% and total value locked (TVL) at $61.775 billion. BNB Smart Chain and Solana follow, with market dominance of 6.81% and 5.66%, respectively, and TVLs over $5 billion each. Bitcoin, usually not categorized purely as a smart contract platform, shows a TVL of $1.102 billion with a 1.46% dominance. Avalanche also features, with a TVL of $786 million and a 1.04% market dominance.

Chain	24h Change	7d Change	30d Change	24h Volume	TVL	Dominance
Ethereum	0.10%	-4.50%	14.90%	$1,704,146,226	$61,775,390,527	81.65%
BNB Smart Chain	-0.40%	-8.70%	16.10%	$466,225,871	$5,154,620,039	6.81%
Solana	-0.90%	-7.10%	-2.30%	$1,258,114,417	$4,280,422,686	5.66%
Bitcoin	-0.80%	-5.30%	-2.50%	–	$1,102,578,965	1.46%
Avalanche	-2.50%	-7.20%	17.20%	$33,493,066	$786,784,013	1.04%

Dominance of L2 Chains

This week’s analysis of top layer-2 blockchains reveals varied performance. Arbitrum One leads in market dominance at 28.85% with a notable 12.1% increase over 30 days. Blast showed a significant 35.7% growth, the highest in the group. Base and Optimism recorded moderate long-term gains. Despite recent declines, Polygon POS maintains steady activity.

Chain	24h Change	7d Change	30d Change	24h Volume	TVL	Dominance
Arbitrum One	-0.50%	-5.20%	12.10%	$465,765,028	$2,974,377,689	28.85%
Blast	0.10%	-6.40%	35.70%	$141,082,628	$2,078,697,971	20.16%
Base	-0.50%	-3.20%	7.50%	$648,067,948	$1,640,311,770	15.91%
Polygon POS	-0.60%	-6.40%	2.30%	$126,634,465	$881,904,360	8.55%
Optimism	-0.60%	-8.70%	7.90%	$102,280,789	$730,896,188	7.09%

Also Check Out: Blockchain Monthly Report For May 2024: All You To Need To Know To Stay Ahead

Top Crypto Exchanges Performance Analysis (7-day)

Top Centralized Exchanges

Binance, the largest exchange, boasts a normalized 24-hour volume of approximately $8.6 billion and an actual volume nearing $16.6 billion, attracting about 65.5 million visits monthly. Bybit and HTX follow, with notable volumes and lower visitor counts. Coinbase and Gate.io also show significant trading activity, with monthly visits of 40.9 million and 16.1 million, respectively.

Exchange	24h Volume (Normalized)	24h Volume	Monthly Visits
Binance	$8,598,884,565	$16,641,029,643	65.5 M
Bybit	$3,995,307,418	$4,583,085,437	30.4 M
HTX	$2,586,813,439	$2,586,813,439	19.8 M
Coinbase Exchange	$2,210,586,639	$2,210,586,639	40.9 M
Gate.io	$2,113,400,227	$2,812,015,036	16.1 M

Top Decentralized Exchanges

Uniswap V3 on Ethereum leads with a 24-hour volume of approximately $1.04 billion, capturing 18.5% of the market share and attracting over 10 million monthly visits. Raydium and Orca follow, with respective market shares of 10.7% and 8.2%, indicating substantial trading activity. Uniswap V3 on Arbitrum One also shows notable engagement, mirroring the Ethereum platform’s visit count. Curve on Ethereum, though smaller in volume, maintains a consistent user base.

Exchange	24h Volume	% Market Share by Volume	Monthly Visits
Uniswap V3 (Ethereum)	$1,042,602,699	18.50%	1,03,88,376
Raydium	$602,205,436	10.70%	34,21,258
Orca	$463,585,969	8.20%	4,80,015
Uniswap V3 (Arbitrum One)	$307,392,576	5.50%	1,03,88,376
Curve (Ethereum)	$288,704,453	5.10%	2,60,162

Top Derivatives

Binance Futures leads with $19.5 billion in open interest and $54.4 billion in daily trading volume. Bybit follows with $13.2 billion in open interest and $19.4 billion in volume. Bitget, Deepcoin, and CoinW also have significant activity, with billions in both open interest and trading volume.

Exchange	24h Open Interest	24h Volume
Binance (Futures)	$19,548,348,236	$54,498,982,029
Bybit (Futures)	$13,177,264,279	$19,411,986,707
Deepcoin (Derivatives)	$10,535,384,835	$7,710,801,075
Bitget Futures	$10,269,511,123	$15,522,748,862
CoinW (Futures)	$6,781,434,672	$23,015,968,916

Crypto Funding Analysis This Week

Crypto Fundraising Trend

The crypto fundraising trend over the past two weeks shows a significant variation in funds raised. From June 10 to June 15, 2024, $112.8 million was raised across 32 fundraising rounds. This contrasts with the previous week, June 3 to June 9, 2024, which saw $409.43 million raised in 29 rounds. While the number of rounds increased in the more recent week, the total funds raised were notably lower

Week	Funds Raised	Number of Fundraising Rounds
June 10– June 15, 2024	$112.8 Million	32
June 3-June 9, 2024	$409.43 Million	29

Active Investors This Week

The table highlights the activity of various investment funds in the crypto space. Electric Capital and Castrum Capital lead with four deals each. Several other funds, including Gains Associates, Kangaroo Capital, and Web3Port, followed with two deals each. Smaller funds like Animoca Brands and Paradigm participated in one deal each.

Funds	Deals
Electric Capital	4
Castrum Capital	4
Gains Associates	2
Kangaroo Capital	2
Web3Port	2
Pantera Capital	2
Big Brain Holdings	2
CSP DAO	2
Mask Network	2
Animoca Brands	1
Delphi Ventures	1
Framework Ventures	1
Outlier Ventures	1
Paradigm	1

Crypto Fundraising by Category

According to Cryptorank’s data, DeFi was the most invested category this week, with Electric Capital and Castrum Capital leading the way. Blockchain infrastructure and GameFi also attracted significant investments, reflecting a diverse interest in various sectors of the market.

Top Hacks This Week

The UwU Lend protocol was hacked for nearly $20 million on June 10. Another exploit resulted in $3.5 million being stolen from UwU during the reimbursement process. Additionally, the cryptocurrency exchange Lykke was breached on June 10, losing $22 million in digital assets.

Holograph’s native token fell 79.4% after a hacker exploited its operator contract, minting 1 billion HLG tokens worth $14.4 million. Holograph confirmed the hack on June 14 and is working to freeze the hacker’s accounts.

Hack	Total Amount Stolen	Date
UwU Lend protocol (first hack)	$20 million	Jun-10
UwU Lend protocol (second hack)	$3.5 million	June 13
Lykke cryptocurrency exchange	$22 million	Jun-10
Holograph (HLG token exploit)	$14.4 million	Jun-14

As a result, nearly $60 million was stolen this week from four different hacks.

Conclusion

Phew! That was a whirlwind week in the crypto market. We unpacked major news like the SEC settlement with Terraform Labs, Donald Trump’s stance on Bitcoin mining, and of course, the wild price swings of Bitcoin. While hacks like the ones on UwU Lend, Lykke exchange, and Holograph cast a shadow, the continued investment in DeFi, blockchain infrastructure, and GameFi hints at exciting things to come.

Stay tuned as we follow these developments closely and keep you informed!

Fuente

DeFi

Haust Network Partners with Gateway to Connect to AggLayer

Published

6 months ago

1 August, 2024

Financial Block Staff

Haust Network Partners with Gateway to Connect to AggLayer

Dubai, United Arab Emirates, August 1, 2024, Chainwire

Consumer adoption of cryptocurrencies is a snowball that is accelerating by the day. More and more people around the world are clamoring for access to DeFi. However, the user interface and user experience of cryptocurrencies still lag behind their fundamental utility, and users lack the simple and secure access they need to truly on-chain products.

Haust Network is a network and suite of products focused on changing this paradigm and bringing DeFi to the masses. To achieve this goal, Haust Network has announced its far-reaching partnership with bridgeseasoned veterans in rapidly delivering revolutionary blockchain utilities for projects. The Gateway team empowers blockchain developers to build DAOs, NFT platforms, payment services, and more. They drive adoption of crypto primitives for individuals and institutions around the world by helping everyone build their on-chain presence.

Gateway specializes in connecting sovereign blockchains to the Aggregation Layer (AggLayer). The AggLayer is a single unified contract that powers the Ethereum bridge of many disparate blockchains, allowing them all to connect to a single unified liquidity pool. The AggLayer abstracts away the complexities of cross-chain DeFi, making tedious multi-chain transactions as easy for the end user as a single click. It’s all about creating access to DeFi, and with Polygon’s technology and the help of Gateways, Haust is doing just that.

As part of their partnership, Gateway will build an advanced zkEVM blockchain for Haust Network, leveraging its extensive experience to deploy ultra-fast sovereign applications with unmatched security, and enabling Haust Network to deliver its products to its audience.

The recently announced launch of the Haust Wallet is a Telegram mini-app that provides users with access to DeFi directly through the Telegram interface. Users who deposit funds into the wallet will have access to all standard send/receive services and generate an automatic yield on their funds. The yield is generated by Haust Network’s interconnected network of smart contracts, Haustoria, which provides automated and passive DeFi yielding.

As part of this partnership, the Haust Network development team will work closely with Gateway developers to launch Haust Network. Gateway is an implementation provider for Polygon CDK and zkEVM technology, which the Haust wallet will leverage to deliver advanced DeFi tools directly to the wallet users’ fingertips. Haust’s partnership with Gateway comes shortly after the announcement of a high-profile alliance with the Polygon community. Together, the three will work to build Haust Network and connect its products to the AggLayer.

About Haust Network

Haust Network is an application-based absolute liquidity network and will be built to be compatible with the Ethereum Virtual Machine (EVM). Haust aims to provide native yield to all users’ assets. In Telegram’s Haust Wallet, users can spend and collect their cryptocurrencies in one easy place, at the same time. Haust operates its network of self-balancing smart contracts that interact across multiple blockchains and then efficiently funnel what has been generated to Haust users.

About Gateway

bridge is a leading white-label blockchain provider that offers no-code protocol deployment. Users can launch custom blockchains in just ten minutes. They are an implementation provider for Polygon CDK and have already helped projects like Wirex, Gnosis Pay, and PalmNFT bring new utility to the crypto landscape.

About Polygon Labs

Polygon Laboratories Polygon Labs is a software development company building and developing a network of aggregated blockchains via the AggLayer, secured by Ethereum. As a public infrastructure, the AggLayer will aggregate the user bases and liquidity of any connected chain, and leverage Ethereum as the settlement layer. Polygon Labs has also contributed to the core development of several widely adopted scaling protocols and tools for launching blockchains, including Polygon PoS, Polygon zkEVM, and Polygon Miden, which is currently under development, as well as the Polygon CDK.

Contact

Lana Kovalski
haustnetwork@gmail.com

Fuente

DeFi

Ethena downplays danger of letting traders use USDe to back risky bets – DL News

Published

6 months ago

1 August, 2024

Financial Block Staff

Ethena downplays danger of letting traders use USDe to back risky bets – DL News

Ethena and ByBit will allow derivatives traders to use USDe as collateral.
There is a risk in letting traders use an asset partially backed by derivatives to place more bets.

Ethena has downplayed the dangers of a new feature, which will allow traders to put up its synthetic dollar USDe as collateral when trading derivatives, which are risky bets on the prices of crypto assets.

While allowing users to underwrite their trades with yield-bearing USDe is an attractive prospect, Ethena said there is potential risk in letting traders use an asset partially backed by derivatives to place even more derivatives bets.

“We have taken this risk into account and that is why Ethena operates across more than five different sites,” said Conor Ryder, head of research at Ethena Labs. DL News.

The move comes as competition in the stablecoin sector intensifies.

In recent weeks, PayPal grown up the amount of its stablecoin PYUSD in circulation 96%, while the MakerDAO cooperative plans a rebrandingaiming to increase the supply of its DAI stablecoin to 100 billion.

US dollar growth stagnates

It comes as Ethena has lost momentum after its blockbuster launch in December.

In early July, USDe reached a record level of 3.6 billion in circulation.

That figure has now fallen by 11% to around 3.2 billion.

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New uses for USDe could boost demand for Ethena’s products.

This is where the new plan, announcement Tuesday with ByBit, one of its partner exchanges, is coming.

Ethena users create USDe by depositing Bitcoin or Ether into the protocol.

Ethena then covers these deposits with short positions – bearish bets – on the corresponding asset.

This creates a stable support for USDe, unaffected by price fluctuations in Bitcoin or Ether.

Mitigate risks

While using USDe as collateral for derivatives trading is proving popular, it is unclear what the effects will be if the cryptocurrency market experiences major fluctuations.

Using derivatives as collateral to place more bets has already had disastrous effects.

In June 2022, Lido’s liquid staking token stETH broke its peg to Ether following the fallout from the Terra collapse.

Many traders who used looping leverage to increase their stETH staking yields were liquidated, creating a cascade that caused the price of Ether to drop by more than 43%.

Ethena Labs founder Guy Young said: DL News His office and his partners have taken many precautions.

Ethena spreads bearish bets supporting the USDe across the five exchanges it partners with.

According to Ethena, 48% of short positions supporting USDe are on Binance, 23% on ByBit, 20% on OKX, 5% on Deribit, and 1% on Bitget. website.

In doing so, Ethena aims to minimize the impact of an unforeseen event on a stock market.

The same theory applies to the distribution of risks across different supporting assets.

Fifty percent of USDe is backed by Bitcoin, 30% by Ether, 11% by Ether liquid staking tokens, and 8% by Tether’s USDT stablecoin.

Previous reviews

Ethena has already been criticised regarding the risks associated with USDe.

Some have compared USDe to TerraUSD, an undercollateralized stablecoin that collapsed in 2022.

“It’s not a good design for long-term stability,” said Austin Campbell, an assistant professor at Columbia Business School. said as the USDe launch approaches.

Young replied to critics, saying the industry needs to be more diligent and careful when “marketing products to users who might not understand them as well as we do.”

Ethena has since added a disclaimer on its website stating that USDe is not the same as a fiat stablecoin like USDC or USDT.

“This means that the risks involved are inherently different,” the project says on its website.

Tim Craig is DL News DeFi correspondent based in Edinburgh. Feel free to share your tips with us at tim@dlnews.com.

Fuente

DeFi

Cryptocurrency and defi firms lost $266 million to hackers in July

Published

6 months ago

1 August, 2024

Financial Block Staff

Crypto companies, defi lost $266m to hackers in July

In July 2024, the cryptocurrency industry suffered a series of devastating attacks, resulting in losses amounting to approximately $266 million.

Blockchain Research Firm Peck Shield revealed in an X post On August 1, attacks on decentralized protocols in July reached $266 million, a 51% increase from $176 million reported in June.

The most significant breach last month involved WazirX, one of India’s largest cryptocurrency exchanges, which lost $230 million in what appears to be a highly sophisticated attack by North Korean hackers. The attack was a major blow to the stock market, leading to a break in withdrawals. Subsequently, WazirX launched a program in order to recover the funds.

Another notable incident involved Compound Finance, a decentralized lending protocol, which suffered a governance attack by a group known as the “Golden Boys,” who passed a proposal who allocated 499,000 COMP tokens – valued at $24 million – to a vault under their control.

The cross-chain liquidity aggregation protocol LI.FI also fell victim On July 16, a hack resulted in losses of $9.73 million. Additionally, Bittensor, a decentralized machine learning network, was one of the first protocols to suffer an exploit last month, lo m ing $8 million on July 3 due to an attack targeting its staking mechanism.

Meanwhile, Rho Markets, a lending protocol, suffered a $7.6 million breach. However, in an interesting twist, the exploiters research to return the stolen funds, claiming the incident was not a hack.

July 31, reports The Terra blockchain protocol was also hacked, resulting in a loss of $6.8 million across multiple cryptocurrencies. As crypto.news reported, the attack exploited a reentrancy vulnerability that had been identified a few months ago.

Dough Finance, a liquidity protocol, lost $1.8 million in Ethereum (ETH) and USD Coin (USDC) to a flash loan attack on July 12. Similarly, Minterest, a lending and borrowing protocol, saw a loss of $1.4 million due to exchange rate manipulation in one of its markets.

Decentralized staking platform MonoSwap also reported a loss of $1.3 million following an attack that allowed the perpetrators to withdraw the liquidity staked on the protocol. Finally, Delta Prime, another decentralized finance platform, suffered a $1 million breach, although $900,000 of the stolen funds was later recovered.

Fuente

DeFi

The Rise of Bitcoin DeFi: Then and Now

Published

6 months ago

1 August, 2024

Financial Block Staff

The convergence of Bitcoin’s robust security and Layer 2 scaling solutions has catalyzed the emergence of a vibrant DeFi ecosystem.

By expanding Bitcoin’s utility beyond simple peer-to-peer payments, these advancements have opened up a new frontier of financial possibilities, allowing users to participate in decentralized lending, trading, and other complex smart contract operations on Bitcoin.

Read on to learn about the rise of Bitcoin-based decentralized finance and how the space has expanded to accommodate a new generation of native assets and features.

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What is DeFi?

Decentralized finance (DeFi) represents a paradigm shift in financial services, offering internet-based financial products such as trading, lending, and borrowing through the use of decentralized public blockchains.

By implementing blockchains, smart contracts, and digital assets, DeFi protocols provide financial services through a decentralized ecosystem, where participants do not have to deal with intermediaries when transacting.

What is Bitcoin DeFi?

The inherent limitations of the Bitcoin mainchain in supporting the intricacies of decentralized finance have created the need to develop smart contract-based Layer 2 solutions.

Additionally, the advent of the Ordinals protocol in 2023, which facilitated the emergence of fungible token standards such as BRC-20 and Runes, catalyzed the growth of DeFi on the Bitcoin blockchain.

This expansion in protocol diversity has broadened the applications of the world’s leading cryptocurrency network beyond the core base-layer use cases around value preservation and transactional capabilities.

Therefore, Bitcoin DeFi has become a nascent sector within the digital asset market, after previously being a missing essential part of the Bitcoin ecosystem.

Bitcoin DeFi in its early days

Integrating decentralized finance (DeFi) concepts into the Bitcoin ecosystem has been a journey of innovation and perseverance. Early attempts to bridge the gap between Bitcoin’s fundamental simplicity and DeFi’s complexities have spawned pioneering projects that, while laying essential foundations, have also encountered significant obstacles.

Colored coins

Colored coins represented an early foray into tokenizing real-world assets on the Bitcoin blockchain. By leveraging the existing network to track ownership of assets ranging from stocks to real estate, this approach highlighted Bitcoin’s potential as a platform beyond digital currency. However, scalability and practical implementation challenges have limited its widespread adoption.

Counterpart

Building on the colored coins, Counterparty has become a platform for creating and trading digital assets, including non-fungible tokens (NFTs), on Bitcoin.

The introduction of popular projects like Rare Pepe NFTs has demonstrated the growing appeal of digital collectibles. However, constraints around user experience and network efficiency have hampered its full potential.

These early experiments, while not fully realizing their ambitions, served as valuable stepping stones, informing Bitcoin DeFi’s subsequent developments. Their challenges highlighted the need for more sophisticated infrastructure and protocols to harness the full potential of decentralized finance on the Bitcoin network.

Bitcoin DeFi Today

Today, building DeFi applications on Bitcoin is primarily done in the realm of Layer 2 (L2) networks. This architectural choice is motivated by the limitations of Bitcoin’s base layer in supporting complex programmable smart contracts.

Bitcoin’s original design prioritized security and decentralization over programmability, making it difficult to develop sophisticated DeFi protocols directly on its blockchain. However, the recent emergence of protocols like Ordinals, BRC-20, and Runes, while not DeFi in their own right, has sparked possibilities for future DeFi-like applications on the main chain.

In contrast, L2 solutions offer a scalable and programmable environment built on Bitcoin, enabling the creation of various DeFi products.

By expanding Bitcoin’s capabilities without compromising its core principles, L2s have become the preferred platform for developers looking to build DeFi applications that encompass trading, lending, staking, and more.

Leading L2 networks such as Lightning Network, Rootstock, Stacks, and Build on Bitcoin provide the infrastructure for these efforts. Some of these L2s have even introduced their own native tokens to the network, further expanding Bitcoin’s DeFi ecosystem.

Essentially, while Bitcoin’s core layer presents challenges for DeFi development, its security and decentralization have provided a foundational layer for the innovative L2 landscape to thrive.

Bitcoin Layer 2 offers a promising path to building a robust and thriving Bitcoin-based DeFi ecosystem that offers trading, staking, lending, and borrowing. All you need is a DeFi Wallet like Xverse to access the new world of decentralized financial services secured by Bitcoin.

Conclusion

The integration of DeFi principles into the Bitcoin ecosystem, primarily facilitated by Layer 2 solutions, marks a significant evolution in the digital asset landscape.

Building on the foundational work of pioneers like Colored Coins and Counterparty, the industry has evolved into more sophisticated platforms like Rootstock, Stacks, and Build on Bitcoin to create a thriving Bitcoin-powered DeFi ecosystem.