Onyx Protocol exploiter begins siphoning $2.1M loot on Tornado Cash

November 1, 2023 Coin Telegraph

Onyx Protocol exploiter begins siphoning .1M loot on Tornado Cash

The bug the Onyx Protocol hacker exploited to steal $2.1 million was previously used by a hacker to extort $7 million from Hundred Finance.

Decentralized peer-to-peer lending platform Onyx Protocol lost roughly $2.1 million in an exploit of a market with no liquidity that was deployed on Oct. 27.

The Onyx Protocol hacker exploited a known bug, a rounding issue behind the popular CompoundV2 fork, explained blockchain investigator PeckShield soon after alerting about the hack that went unnoticed by the protocol.

#PeckShieldAlert @OnyxProtocol has been exploited for ~2.1M pic.twitter.com/5Z50tCg6MD
— PeckShieldAlert (@PeckShieldAlert) November 1, 2023

The alleged liquidity lacking oPEPE market was “abused with donation to borrow funds from other markets with liquidity,” found PeckShield’s independent investigation on the matter.

“The donated funds were then redeemed by exploiting the known rounding issue.”

Previously, on April 16, an attacker exploited the same bug to steal $7 million from multichain lending protocol Hundred Finance.

#CertiKSkynetAlert @HundredFinance’s attacker manipulated the exchange rate between ERC-20 tokens and htokens which allowed them to withdraw more tokens than they had originally deposited. The estimated losses of this attack is around $7.4 million.

Stay vigilant! https://t.co/1hxAnFoNjj
— CertiK Alert (@CertiKAlert) April 15, 2023

In Hundred’s case, the attacker manipulated the exchange rate between ERC-20 tokens and hTOKENS, allowing them to withdraw more tokens than originally deposited, according to CertiK.

Consistent hack attempts from bad actors require a greater understanding of the art of tracking cryptocurrencies.

A recent Cointelegraph Research article details the various methods that can be used to fortify crypto security with blockchain analysis. As explained, tracking stolen crypto using blockchain analysis broadly involves six major steps: transaction tracing, address clustering, behavioral analysis, pattern recognition, regulatory vigilance and collaboration.

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Mixin Network offers $20M bug bounty to hackers in $200M hack

September 27, 2023 Coin Telegraph

Mixin Network offers M bug bounty to hackers in 0M hack

Coin Telegraph

Mixin Network suffered a breach in its third-party cloud server database resulting in the theft of nearly $200 million worth of digital assets.

Mixin Network, a decentralized cross-chain protocol, in a message to the hacker behind the $200 million exploit on Sept. 23, has offered a $20-million bug bounty for the return of the remaining funds.

Mixin Network encrypted the message with the exploiter transaction, requesting the exploiter to return the funds as the majority of the stolen funds were user assets.

“Most of our platform assets were users, and we hope you can refund them. You can keep $20M of the assets as a BUG Bounty Reward for the BUG.”

Mixin Network confirmed the exploit on Sept. 25, claiming the exploiters managed to breach a third-party cloud service provider, which resulted in the theft of nearly $200 million of assets from the platform.

[Announcement] In the early morning of September 23, 2023 Hong Kong time, the database of Mixin Network's cloud service provider was attacked by hackers, resulting in the loss of some assets on the mainnet. We have contacted Google and blockchain security company @SlowMist_Team…
— Mixin Kernel (@MixinKernel) September 25, 2023

Feng Xiaodong, founder of Mixin, said at the time that the company would reimburse affected users up to a “maximum of 50%,” with the remaining amount being handed back in bond tokens that the business would then repurchase with its earnings.

Mixin is yet to offer full details about what led to the exploit, but an on-chain analytic platform highlighted a history of the hacker’s interactions with Mixin Network. The hacker-associated address 0x1795 received 5 Ether (ETH) from Mixin in 2022.

While it is still unclear how the exploiters managed to steal $200 million worth of assets through a data breach, cross-chain protocols in the decentralized finance (DeFi) space have been the target of some of the biggest exploits in crypto history. One report indicates more than half of all DeFi exploits occur on cross-chain protocols, which have resulted in losses of over $2.5 billion.

*Bridge exploits account for more than 50% of DeFi losses. Source: Token Terminal*

Cross-chain protocols help with interoperability between different chains, allowing users to send assets from one blockchain to another. Thus, these cross-chain protocols often hold a significant amount of assets from multiple chains, making them vulnerable to such exploits.

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DYdX to unlock 6.52M tokens worth $14M for community treasury, rewards

August 29, 2023 Coin Telegraph

DYdX to unlock 6.52M tokens worth M for community treasury, rewards

Coin Telegraph

Out of the lot, 2.49 million DYDX tokens — worth $5.36 million — will be allocated to the community treasury, which funds contributor grants, community initiatives and liquidity mining, among other programs.

Decentralized exchange (DEX) platform dYdX will unlock $14.02 million worth of its native DYDK tokens to be allocated to its community treasury and rewards for traders and liquidity providers.

On Aug. 29, dYdX will release 6.52 million tokens, representing 3.76% of the DYDX circulating supply. Out of the lot, 2.49 million DYDX tokens — worth $5.36 million — will be allocated to the community treasury. The treasury funds contributor grants, community initiatives and liquidity mining, among other programs.

*Upcoming dYdX unlock event. Source: token.unlocks.app*

The remaining 4.03 million DYDX tokens will be split between liquidity provider rewards (1.15 million tokens worth $2.47 million) and trading rewards (2.88 million tokens worth $6.18 million).

*Full funds allocation for dYdX. Source: token.unlocks.app*

DYdX conducted an identical unlock event on Aug. 1 with the same allocation of funds. Data on dYdX’s full allocation from TokenUnlocks suggests that investors hold the highest allocation at 27.7%, followed by trading rewards and community treasury at 20.2% and 16.2%, respectively.

*Total unlock progress for dYdX. Source: token.unlocks.app*

DYDX has a maximum supply of 1 billion tokens, and over 75% are locked, as shown above.

DYdX founder Antonio Juliano recently recommended crypto entrepreneurs explore markets outside the United States.

Crypto is aligned with American values. What could be more American & capitalist than a financial system of the people, by the people, and for the people

That is literally what we’re building here. America will realize that eventually
— Antonio | dYdX (@AntonioMJuliano) August 25, 2023

Juliano emphasized that crypto startups could scale faster overseas in friendlier markets:

“Crypto builders should just give up serving US customers for now and try to re-enter in 5-10 years. It’s not really worth the hassle/compromises. Most of the market is overseas anyways. Innovate there, find PMF [product market fit], then come back with more leverage.”

As the U.S. government continues to drag its heels on establishing crypto regulation, Juliano suggested that the crypto sector needs to grow further to have more sway over U.S. policy.

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Magnate Finance on Base rug-pulls users of $6.5M, as predicted by on-chain sleuth

August 25, 2023 Coin Telegraph

BASE

Magnate Finance first deleted its Telegram channel and X account followed by taking down the website before pulling the plug on its TVL.

Magnate Finance, a lending and borrowing platform on Coinbase’s layer-2 protocol, Base, has rug-pulled its users of $6.5 million hours after on-chain sleuths like ZachXBT warned about the possibility of an exit scam due to several actions of the founders of the project.

Earlier on Aug. 25, the Magnate Finance protocol deleted its Telegram group and took its website offline, raising concerns among users of a possible exit scam.

Magnate Finance also deleted its X account and removed all possible social media presence. ZachXBT had notified that the Magnate Finance deployer address is directly linked to the Solfire $4.8-million exit scam.

Community Alert: Magnate Finance on Base will likely exit scam in the near future currently with over $6.4M TVL.

The deployers address is directly linked to the Solfire $4.8M exit scam. pic.twitter.com/mBDUy3D66j
— ZachXBT (@zachxbt) August 25, 2023

Just hours after deleting the Telegram group and taking their website down, the project developers manipulated the price oracle of the protocol and removed all the assets, leading to the collapse of the $6.4 million of total value locked (TVL) in the protocol.

*Magnate Finance TVL collapse. Source: DeFi Lama*

Blockchain analytic firm PeckShield notified that the scammers behind the project transferred $1.34 million worth of Dai (DAI) tokens to a new address starting from 0x0664 and later bridged $1 million of the stolen funds to the BNB Smart Chain. PeckShield also tracked five different wallets linked to the Magnate Finance scammers.

*Magnate Finance stolen fund movement. Source: Peckshield*

The scammer behind the rugpull has bridged the majority of the profits to Ethereum L2 platforms Arbitrum and Optimism, along with the BNB Smart Chain through Stargate. Currently, around 295 Ether (ETH) and 1.3 million DAI are still held on the Base chain.

Exit scams and rugpulls have become a very common tactic of scammers, especially in the decentralized finance ecosystem due to the added convenience of decentralization. This is evident from the fact that the total value of cryptocurrencies lost in exit scams and hacks amounted to $656 million during the first half of 2023.

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‘Pro crypto bill’ passes out of US House Agriculture Committee

July 27, 2023 Coin Telegraph

Coin Telegraph

The Republican bill, dubbed FIT for the 21st Century, was drafted by two House committees and passed after strenuous preparations by members of both parties.

Tact was pervasive in the United States House of Representatives Agricultural Committee’s consideration of the Financial Innovation and Technology for the 21st Century Act on July 27. With many references to bipartisanship and self-congratulatory mentions of the members’ cooperation and hard work, the committee plowed through a series of amendments calmly and quickly.

The bill, co-written by Republican members of the Agriculture and Financial Services Committee, seeks to create a comprehensive regulatory framework for digital assets. It was debated in the Financial Services Committee along with several other bills a day earlier.

Ranking member David Scott introduced the Democrats’ concerns, claiming that consumer protections need to be strengthened in the bill. It does not provide for third-party auditing, he said.

In addition, funding for the Commodity Futures Trading Commission (CFTC) was not increased in line with the new authorities the bill would give it, though it was later pointed out that the bill provides the CFTC with the minimum level of funding requested by chair Rostan Behnam.

The bipartisanship took a while to show through as Rep. Alma Adams called the bill “a fast track to investor confusion.” Her amendment to guarantee diversity on the boards of market participants was later voted down.

The provisional registration measures evoked comment from several legislators. Eventually, an amendment proposed by Rep. Yadira Caraveo to require provisionally registered parties to belong to a futures trade association was passed, with the purpose of providing some oversight of them while regulations were being worked out.

Shifting over to @HouseAgGOP as they markup the Financial Innovation and Technology for the 21st Century Act, Chair Thompson noted the following in his opening remarks:

"This legislation marks a significant milestone in the House Committee on Agriculture's efforts to create a…
— DeFi Education Fund (@fund_defi) July 27, 2023

Market participants will also be required to have physical addresses under an amendment by Rep. Jasmine Crockett. Disclosure requirements were also strengthened.

The chair, Rep. Glenn Thompson, and ranking member agreed to study decentralized finance further. The bill was successfully passed out of the committee.

The crypto community has vocally supported the bill. Crypto Council for Innovation CEO Sheila Warren praised the committee’s passage of the bill in a statement:

“It's a significant marker that shows keeping the status quo is not an option. There is too much at risk for consumers, US competitiveness and national security to take a back seat.”

Warren added, “The definition of ‘digital asset trading system’ should be narrowed and the new exclusion category to the definition of ‘digital asset’ included in Section 101 and the restrictions on mixed digital asset transactions further clarified.”

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Bitcoin ordinals hit Binance NFT Marketplace in latest update

May 9, 2023 Coin Telegraph

Binance

The Binance NFT marketplace announced that users will soon be able to trade and purchase Bitcoin NFTs on its platform using already-existing wallets.

Bitcoin ordinals — also known as Bitcoin NFTs — have made their way into the limelight of the Web3 space, as more marketplaces continue to adopt and offer digital assets.

On May 9, the cryptocurrency exchange Binance announced that it will support Bitcoin ordinals on its NFT marketplace in late May. The development will expand Binance’s multichain NFT ecosystem to include the Bitcoin network.

Previously the Binance NFT market integrated with other decentralized networks, including BNB Chain, Ethereum and Polygon.

Mayur Kamat, the head of product at Binance, commented on broadening the offerings in the marketplace and Bitcoin’s (BTC) crypto legacy:

“Bitcoin is the OG of crypto.”

The update allows Binance users to purchase and trade Bitcoin ordinals from existing Binance accounts. According to the announcement, the update will also include royalty support and “additional revenue generating opportunities” for those creating Bitcoin ordinals.

Prior to Binance’s announcement, the cryptocurrency exchange OKX similarly announced in late April that it was bringing Bitcoin ordinals to its marketplace and wallet ecosystem. Initially, OKX users could view and store ordinals using their accounts, with the option to mint ordinals being hinted at in the future, according to Haider Rafique, the chief marketing officer at OKX.

The Bitcoin NFTs are also available on marketplaces such as Magic Eden, which integrated the feature back in March.

*Ordinals reach 3 million inscriptions. Source: Dune*

According to recent data, inscriptions of Bitcoin ordinals have been on the rise in recent months. On April 2, Bitcoin ordinals reached 58,179 inscriptions — up 83.5% from the previous month. However, on May 1, the total number of Bitcoin ordinal inscriptions skyrocketed to exceed 3 million.

Nonetheless, they remain a controversial topic within the crypto community, with Bitcoin maximalists criticizing them for deviating from Bitcoin’s original peer-to-peer ethos.

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Innovate some compliance mechanisms, US Treasury official tells DeFi community

April 21, 2023 Coin Telegraph

AML

Assistant Treasury Secretary Elizabeth Rosenberg said the Treasury was enhancing its regulatory regime and DeFi should program in some compliance.

The United States Treasury did a risk assessment of decentralized finance (DeFi) and found the sector lacking in several ways, Assistant Treasury Secretary for Terrorist Financing and Financial Crime Elizabeth Rosenberg reminded an audience at the Atlantic Council think tank on April 21. Get ready for more regulation, she said.

Rosenberg referred to a report released earlier this month by the Treasury that found scammers, money launderers and North Korean hackers benefitting from the lack of Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) compliance in the sector. That report was part of the Treasury’s response to U.S. President Joe Biden’s executive order on the responsible development of digital assets.

The report also found that DeFi was not always very decentralized. “There are generally persons and firms associated with those [DeFi] services to which AML/CFT obligations may already apply,” Rosenberg said. The assessment report established that all DeFi services are liable to compliance with the Bank Secrecy Act, including AML/CFT.

#US Treasury officials Liz Rosenberg and Brian Nelson will embark on a tour that includes stops in #Italy, #Switzerland, and #Germany, to try to coerce institutions into stopping trade with Russia. https://t.co/1jArWjghw8
— IGO Arena (@igoarena) April 12, 2023

“We will assess enhancements to our domestic AML/CFT regulatory regime as applied to DeFi services and monitor responsible innovation of AML/CFT and sanctions compliance tools,” Rosenberg said. She continued:

“I want to offer a specific message to the private sector. ‘DeFi innovation’ should not only occur in the technical, financial domain — there is an enormous need and potential for innovation in compliance mechanisms that could help all players in the digital ecosystem ensure they remain on the right side of the law.”

Rosenberg and her team were freshly back from the Financial Action Task Force (FATF) Virtual Assets Contact Group meeting in Tokyo, she said. The team presented the results of the Treasury’s DeFi risk assessment there as well.

The timing of Rosenberg’s speech is also notable because the European Parliament passed the Markets in Crypto-Assets Act (MiCA) a day earlier. MiCA legislation included provisions for tracing or blocking certain payments using crypto assets. This AML/CFT practice is already used in traditional finance and is known as the “travel rule” in the FATF. It was also a key part of the Treasury risk assessment.

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Web3 economy to gain more traction in Africa through DeFi-based financial inclusion

April 13, 2023 Coin Telegraph

Africa

DeFi-based financial inclusion serves to increase liquidity and earning opportunities for African micro-entrepreneurs through Fonbnk’s partnership with Tanda.

Web3 in Africa began with cryptocurrency, with blockchain technology bringing a lot of transformation regarding transparency and people’s control over their finances. The Web3 economy in Africa continues gaining traction with decentralized finance-based financial inclusion.

Fonbnk, the Web3 on-ramp that allows Africans to obtain cryptocurrency assets by exchanging their airtime credits, has partnered with Tanda, a merchant network platform in East Africa, to launch an airtime trading marketplace across Tanda’s network of agents.

The partnership between Tanda agents and vendors in East Africa can increase liquidity in the marketplace through the buying and selling of prepaid airtime for profit. This, in turn, can create opportunities for agents to earn revenue and also allow them to store their profits in dollarized stablecoins.

The partnership gives African micro-entrepreneurs more earning opportunities, creating a growth flywheel effect through improved liquidity and marketplace efficiency. This cycle builds trust and generates even more liquidity. Moreover, this partnership enables more African users to participate in the Web3 economy — without requiring bank accounts or cards — by using only their airtime credits.

Although Fonbnk operates throughout Africa, its partnership with Tanda is concentrated in East Africa. Fonbnk plans to expand earning opportunities for African micro-entrepreneurs and bring decentralized finance-based financial inclusion to the masses across Africa.

During the first episode of Cointelegraph’s Hashing It Out podcast, the co-founder of Fonbnk identified the rise in crypto adoption as being due to several factors, such as the chance to earn money, inflation, currency devaluation and the ease of doing business on a global scale.

Web3 can open up an intra-African exchange economy, and it can be used for purchases and transportation between African nations thanks to the ability to be used between borders. It will assist Africans in generating more economic value in the wider market.

According to BitcoinAfrica.io, the top five African countries whose communities are adopting Web3 and crypto are South Africa, Nigeria, Zimbabwe, Kenya and Ghana. They have the most demand for digital currency and the most active local cryptocurrency communities.

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NFT marketplace LooksRare launches v2, reducing fees from 2% to 0.5%

April 7, 2023 Coin Telegraph

Coin Telegraph

The previous version of the nonfungible token marketplace will be sunsetted by April 13, 2023.

Nonfungible token (NFT) marketplace LooksRare has upgraded to version 2, reducing fees by 75% and implementing several other features, according to an April 6 announcement from the company.

!

Rolled out rn:
- Fee dropped to 0.5%
- Gas 50% cheaper than Blur
- One-signature bulk listing
- Buy 70+ NFTs at once
- Sellers get ETH instead of WETH

Full deets https://t.co/3XXGeGK2r2
— LooksRare (@LooksRare) April 6, 2023

The LooksRare version 1 platform charged 2% per trade. This has been reduced to 0.5% in version 2. In addition, v2 has more gas-efficient contracts, allowing users to save approximately 30% on gas fees versus the previous version of the app.

The company explained that in version 2, sellers receive Ether (ETH) instead of Wrapped Ether (WETH) for most sales, and the smart contracts allow for bulk buying and selling orders if a user wants to place multiple trades simultaneously. In addition, aggregators can now implement custom recipients, allowing users to buy an NFT with one wallet but send it to another.

Sellers can also list their NFTs for sale in token prices instead of ETH, including for a fixed U.S. dollar price to be paid in equivalent ETH.

The team said in a separate April 7 post that LooksRare v1 will be sunsetted. On April 12, the app’s front end will no longer allow users to post version 1 auctions through the public API. All current v1 auctions will be removed from the website at 10:00 am UTC on April 13, and the smart contracts themselves will be disabled through an admin function at 11:00 am UTC.

Reaction to the announcement was mostly positive, as many LooksRare users believed the new features would provide a strong challenge to competitors such as OpenSea and Blur.

pic.twitter.com/fYnXUbNtSv
— Luke Cannon | Lukecannon.eth ‍♂️ (@lukecannon727) April 6, 2023

But not everyone was convinced that LooksRare v2 would be enough of a change to woo users from other platforms. Some users expressed that v2 still fails to provide good token incentives or allow enough collections to be listed.

LooksRare faced some controversy in October when it decided to eliminate creator royalties. However, it has also benefited from the recent boom in NFT prices.

European DeFi startups saw a 120% increase in VC funding in 2022: Finance Redefined

March 31, 2023 Coin Telegraph

Coin Telegraph

The top 100 DeFi tokens had a mixed week, with little changes and a majority of the tokens trading in green.

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 ongoing downturn in the crypto market hasn’t stopped European venture capital (VC) firms from investing in DeFi projects. A new report revealed that European DeFi startups saw a 120% increase in VC funding last year.

The Euler Finance saga continued to dominate headlines, with the exploiter returning a significant chunk of the $190 million in stolen funds. The exploiter has returned over 58,000 stolen Ether (ETH) in one installment, and another $37 million worth of ETH and Dai (DAI) in the second one.

Traditional banking giant, Citibank, forecasts tokenization will take over traditional finance and predicts that by 2030 trillions in assets could be tokenized.

MakerDAO passed a new constitution to create multiple offices tasked with fulfilling various jobs for the protocol, each with its powers and responsibilities.

The top 100 DeFi tokens had a mixed week and didn’t see many changes from the previous week, with a majority of the tokens trading in green.

European DeFi startups saw 120% increase in VC investment in 2022: Data

2022 was a turbulent year for the crypto space, from an ongoing bear market and high-profile collapses of some of the industry’s most prominent players, like Terra and FTX. Despite the setbacks, venture capital investors continued supporting crypto startups.

According to a new study released by European investment firm RockawayX, VC investment in crypto startups based in Europe reached its all-time high in 2022, with $5.7 billion invested. European decentralized finance startups hit $1.2 billion in 2022 — a 120% increase from the previous year’s investments of $534 million.

Continue reading

Euler Finance exploiter returns over 58,000 stolen Ether

The hacker behind the $196 million exploit on lending protocol Euler Finance has returned most of the stolen assets, according to on-chain data.

In a transaction on March 25, the exploiter returned 51,000 ETH, worth around $88 million at the time of writing. A second transfer of 7,737 ETH was made on the same day, worth over $13 million. Previously, on March 18, the hacker sent 3,000 ETH to the protocol, worth nearly $5.4 million at the time. The exploiter still controls some of the stolen assets. By April 27, the attacker returned another $37.1 million worth of ETH and DAI.

Continue reading

‘Killer use case’: Citi says trillions in assets could be tokenized by 2030

Citibank is betting on the blockchain-based tokenization of real-world assets to become the next “killer use case” in crypto. The firm forecasts the market to reach between $4 trillion and $5 trillion by 2030.

That would mark an 80-fold increase from the current value of real-world assets locked on blockchains, Citibank explained in its “Money, Tokens and Games” March report.

Continue reading

MakerDAO passes new ‘constitution’ to formalize governance process

MakerDAO, the decentralized autonomous organization that governs the DAI stablecoin, has passed a new proposed “constitution” intended to formalize governance processes and help prevent hostile actors from taking over the protocol, according to the official forum page for the proposal.

According to the proposal’s text, a constitution is needed because the Maker protocol “relies on governance decisions by humans and institutions holding MKR tokens,” which can “expose weaknesses and vulnerabilities that can fail the Maker protocol or the loss of user funds.”

Continue reading

DeFi market overview

Analytical data reveals that DeFi’s total market value rose above $50 billion this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most of the tokens trading in green, barring a few.

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.

decentralized marketplace