SushiSwap approval bug leads to $3.3 million exploit

April 9, 2023 Coin Telegraph

SushiSwap approval bug leads to .3 million exploit

Only users who have traded on the decentralized exchange in the last four days are apparently affected.

A bug on a smart contract on the decentralized finance (DeFi) protocol SushiSwap led to over $3 million in losses in the early hours of April 9, according to several security reports on Twitter.

Blockchain security companies Certik Alert and Peckshield posted about an unusual activity related to the approval function in Sushi's Router Processor 2 contract — a smart contract that aggregates trade liquidity from multiple sources and identifies the most favorable price for swapping coins. Within a few hours, the bug led to losses of $3.3 million.

It seems the @SushiSwap RouterProcessor2 contact has an approve-related bug, which leads to the loss of >$3.3M loss (about 1800 eth) from @0xSifu.

If you have approved https://t.co/E1YvC6VZsP, please *REVOKE* ASAP!

One example hack tx: https://t.co/ldg0ww3hAN pic.twitter.com/OauLbIgE0Q
— PeckShield Inc. (@peckshield) April 9, 2023

According to DefiLlama pseudonymous developer 0xngmi, the hack should only affect users who swapped in the protocol in the past four days.

Sushi's head developer Jared Grey urged users to revoke permissions for all contracts on the protocol. "Sushi's RouteProcessor2 contract has an approval bug; please revoke approval ASAP. We're working with security teams to mitigate the issue," he noted. A list of contracts on GitHub with different blockchains requiring revocation has been created to address the problem.

We've confirmed recovery of more than 300ETH from CoffeeBabe of Sifu's stolen funds. We're in contact with Lido's team regarding 700 more ETH.
— Jared Grey (@jaredgrey) April 9, 2023

Hours after the incident, Grey took to Twitter to announce that a "large portion of affected funds'' had been recovered through a whitehat security process. "We've confirmed recovery of more than 300ETH from CoffeeBabe of Sifu's stolen funds. We're in contact with Lido's team regarding 700 more ETH."

The Sushi's community has had an intense weekend. On April 8, Grey and his counsel provided comments on the recent subpoena from the United States Securities and Exchange Commission (SEC).

"The SEC’s investigation is a non-public, fact-finding inquiry trying to determine whether there have been any violations of the federal securities laws. To the best of our knowledge, the SEC has not (as of this writing) made any conclusions that anyone affiliated with Sushi has violated United States federal securities laws," he stated.

Grey claims to be cooperating with the investigation. A legal defense fund in response to the subpoena was proposed on Sushi's governance forum on March 21.

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Sushi sets up legal defense fund after SEC subpoenas head chef Jared Grey and DAO itself

March 21, 2023 Coin Telegraph

Coin Telegraph

The DAO said it would not be commenting on “ongoing legal investigations,” but its existing $100,000 defense fund was apparently not enough.

Sushi DAO proposed the creation of a legal defense fund on March 21 in response to the “recent” subpoena of Sushi head Jared Grey and the decentralized autonomous organization (DAO) itself by the United States Securities and Exchange Commission.

The DAO’s proposal did not provide details about the SEC subpoena. It stated that it was cooperating with the SEC and that “we do not intend to comment publicly on ongoing investigations or other legal matters.” One community member commented:

“How does ‘sushi’ even get subpoenad [sic]? The human I get, but sushi is a dao. […] How are they trying to get the dao? By pressuring us with going after Jared [Grey]? I got no letter in my mail and I am the Dao just like all the other members.”

Japan-based Sushi DAO operates the SushiSwap decentralized exchange using the SUSHI (SUSHI) token. The DAO proposed a redesign of SUSHI tokenomics at the end of last year after losing $30 million on incentives for liquidity providers in 2022.

Sushi created a legal entity “to reduce liability” and then that entity and an individual associated with it got subpoenaed.

PSA: if there’s an entity, it’s not a DAO

Don’t let lawyers talk you into incorporation… unless you want to be a corporation. https://t.co/DATkdiPTCs
— Erik Voorhees (@ErikVoorhees) March 21, 2023

The new proposal suggests dedicating $3 million to the fund, with a top-up of $1 million if needed. Sales of SUSHI would pay for 15% of the fund. It pointed out that Maker DAO proposed a similar fund in December. Sushi first created a legal defense fund in March 2022, with funding of between $85,000 and $100,000.

Sushi is reportedly the first DAO the SEC has “targeted” under the chairmanship of Gary Gensler, although the agency has been widely seen as cracking down on the crypto industry in recent months. It has concentrated on staking and custody in particular. In February, the SEC forced centralized exchange Kraken to discontinue its staking service for U.S. clients. Kraken paid $30 million in penalties.

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DeFi protocols unite to promote permissionless Web3 experiences

February 7, 2023 Coin Telegraph

Aave

The collaboration of over 30 DeFi projects came as an effort to counteract the negative sentiments built in 2022 due to numerous CeFi ecosystem crashes.

The damages caused by the fall of major crypto ecosystems in the last year are on a path of steady recovery as good actors take proactive measures to rebuild trust among investors. Major players from the decentralized finance (DeFi) ecosystem came together to showcase the incentive behind operating trustless, interoperable and permissionless platforms.

For 24-hrs from Feb.6 to 7, over 30 DeFi protocols joined in an initiative to “permissionlessly” share tweets from other protocols — thus highlighting the permissionless and interoperable nature of Web3. Projects participating in this campaign include Yearn, MakerDAO, SushiSwap and Aave, among others.

An experiment in social coordination with @MakerDAO pic.twitter.com/lXOFPeqToS
— Element Finance (@element_fi) February 6, 2023

DeFi has amassed mainstream acceptance with significant institutions making their entrance into the space, it still has a shaky reputation due to its many exploits.

Mamun Rashid, the chief marketing officer at MakerDAO, said that in order to realize the “full potential” of DeFi there needs to be a collaboration between the ideas and expertise that exist in the space.

“Together, we can push the boundaries of traditional finance and build a more inclusive and accessible financial system through DeFi."

The projects collaborating in the campaign defined the “spirit” of DeFi as a more collaborative ecosystem, rather than a competitive one.

Jared Grey, the CEO of SushiSwap said DeFi is being built to challenge the current status quo of known financial frameworks, which historically create barriers and reduce economic freedom.

“Leveraging the composability of this new technology, we can democratize and provide more equitable, safer, and transparent financial tools and products to reach a global audience.”

Grey said the responsibility to portray the true message of DeFi comes first from within the space. Therefore, the initiative and solidarity of more than 30 builders within the space comes at a critical time.

Over the last year, the DeFi space was a major target for exploits. According to a report from Beosin, DeFi-based projects received the highest number of attacks in 2022.

This vulnerability led to a 47.4% rise in security losses in 2022 compared to the previous year, which totaled $3.64 billion in losses.

Additional industry insights revealed that the trend of DeFi exploits should be expected to continue into this year due to new projects entering the market and more sophisticated hackers.

Nonetheless, the space started the year off with significant growth, according to a DappRadar report. In January, a new $150 million ecosystem fund was created by Injective to boost DeFi and Cosmos adoption.

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SushiSwap passes 100% fee relocation, 10.9M SUSHI clawback proposals

January 24, 2023 Coin Telegraph

Blockchain

100% of trading fees on the platform will soon be redirected to the SushiSwap treasury for maintenance and expenses.

According to a governance proposal passed on Jan. 23, decentralized exchange (DEX) SushiSwap will soon redirect 100% of trading fees on the platform to its treasury for operations and maintenance for one year's duration. The move came after CEO Jared Grey warned that the exchange "only has 1.5 years of treasury runway left," even after slashing annual operating expenses from $9 million to $5 million amids the ongoing crypto winter.

"Revenue to the treasury will be in the form of 50% ETH and 50% USDC, with projection of ~$6m being earned over the next year if this proposal were to pass."

In a separate proposal that passed the same day, 99.85% of voters elected to "clawback" 10,936,284 unclaimed SUSHI ($14.8 million) tokens awarded to early liquidity providers during the DEX's launch in 2020. The rewards were available to SushiSwap users who provided trading liquidity for the exchange from August 2020 to February 2021 and had been open to claim for close to two years. Some users argued that "people have earned these SUSHI fair and square," and their claim to these assets should not be denied. Others said that they support the clawback as "idle SUSHI that can be put to better use." The assets will be returned to the SushiSwap treasury.

SushiSwap, the sixth-largest DEX by 24 hours trading volume, has been hit hard by the crypto market downturn and product-market-fit woes. Last December, Cointelegraph reported that the DEX lost $30 million over 12 months alone on incentives for its liquidity providers due to "unsustainable" token emission rates. As a result, the DEX is currently seeking to revamp its tokenomics model.

Calling all Sushi community members

We've just released our new tokenomics calculators and we would love your input

Let’s continue the tokenomics dialogue and make Sushi even better together!

New Tokenomics Calculators:
https://t.co/Tji2ScDKYi
— SushiSwap (@SushiSwap) January 24, 2023

DeFi should complement TradFi, not attack it: Finance Redefined

January 20, 2023 Coin Telegraph

Coin Telegraph

Top 100 DeFi tokens continued their bullish momentum into third week of January with majority of the tokens trading in green on weekly charts.

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.

Following FTX’s demise, the DeFi space is up for a complete remodel as crypto users demand better security and compliance practices.

SushiSwap’s roadmap for the coming year includes the development of a decentralized exchange (DEX) aggregator, a decentralized incubator and “several stealth projects.” All these projects combined can grow its market share 10x, said the CEO.

The co-founder and CEO of Ava Labs spoke with Cointelegraph at the World Economic Forum in Davos, Switzerland, on the future of DeFi and traditional finance (TradFi) and said DeFi should complement TradFi, not attack it. Another DeFi report suggests that decentralized forex could reduce costs by as much as 80%.

The top 100 DeFi tokens saw a second week of bullish price action, with a majority of the tokens trading in the green on the weekly charts.

SushiSwap’s new DEX aggregator will ‘10x our market share’ — head chef

Just a month after warning of a “significant deficit” in its treasury, the CEO of decentralized exchange SushiSwap has shared several planned updates to the platform, which he said are intended to “10x” its market share in 2023.

SushiSwap CEO, Jared Grey, laid out the plans for the DeFi platform in a Jan. 16 Medium post, saying it will focus on its product stack in line with prior plans to make Sushi more sustainable.

Continue reading

DeFi should complement TradFi, not attack it: Ava Labs CEO | Davos 2023

DeFi is moving from becoming a small niche within the financial industry to something TradFi is trying to incorporate.

In an interview with Cointelegraph at the World Economic Forum in Davos, Switzerland, Emin Gun Sirer, the co-founder and CEO of Ava Labs, spoke on DeFi’s role in TradFi ecosystems and what users can expect in a future where both are center stage.

Continue reading

Decentralized forex will reduce costs by as much as 80%: Report

If the foreign exchange market starts using DeFi protocols instead of the current centralized systems, the cost of remittances could be reduced by “as much as 80%,” according to a Jan. 19 paper jointly published by researchers at Circle and Uniswap.

The authors studied the trading activity of Circle’s USD Coin (USDC) and Euro Coin (EUROC) on Uniswap from July 2022 to January 2023. They found that the coins had $128 million in total volume, with trading volume as high as $8 million on some days.

Continue reading

Raydium exploiter moves $2.7M to crypto mixer Tornado Cash

In an alert, blockchain security firm CertiK reported that the Raydium protocol exploiter had sent 1,774.5 Ether (ETH) to the Tornado Cash cryptocurrency mixer. The amount is worth around $2.7 million at the time of writing.

While security teams from various exchanges continue to combat the efforts of hackers, funds continue to flow to the sanctioned Tornado Cash.

Continue reading

DeFi market overview

Analytical data reveals that DeFi’s total market value remained over $40 billion this past week, trading at about $44.9 billion at the time of writing. Data from Cointelegraph Markets Pro and TradingView show that DeFi’s top 100 tokens by market capitalization had a bullish week, with nearly all the tokens breaking past multi-week highs.

Convex Finance (CVX) was the biggest gainer on the weekly charts, registering a 37% price surge over the last seven days, followed by Kava (KAVA) with a 34% surge. Synthetix (SNX) recorded a 29% surge on the weekly charts, while the rest of the tokens in the top 100 also saw bullish gains over the past week.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education in this dynamically advancing space.

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SushiSwap’s new DEX aggregator will ’10x our market share’ — Head Chef

January 17, 2023 Coin Telegraph

2023 plans

SushiSwap’s roadmap for the coming year includes the development of a DEX aggregator, a decentralized incubator, and "several stealth projects."

Just a month after warning of a "significant deficit" in its treasury, the CEO of decentralized exchange (DEX) SushiSwap has shared several planned updates to the platform which it says is intended to "10x" its market share in 2023.

Sushi CEO Jared Grey laid out the plans for the decentralized finance (DeFi) platform in a Jan. 16 Medium post saying it will focus on its product stack in line with prior plans to make Sushi more sustainable.

"Sushi commands ~2% of the AMM market & 0% of the aggregation market. By executing our vision, we intend to 10x our market share in 2023."

Newly announced plans include a DEX aggregator set for launch in Q1 and a “decentralized incubator” on the cards for 2023.

Grey said the upcoming DEX aggregator — a tool giving users access to various DeFi protocols — was built in “stealth mode” throughout last year, and is part of its plans to drive scalability and sustainability of its business.

Read how we're revitalizing @SushiSwap in 2023!https://t.co/KTnNgtUMaw
— Jared Grey (@jaredgrey) January 16, 2023

Grey also laid out the vision for Sushi Studios, a so-called decentralized incubator where Sushi will help launch self-funded projects “to support ecosystem growth without burdening the DAO treasury.”

He added “several stealth products” are currently in development along with its long-awaited nonfungible token (NFT) marketplace Shoyu expected for a first-quarter launch and a perpetual DEX platform.

The push for more offerings comes after a Dec. 6 governance proposal put forward by Grey revealed Sushi’s treasury only had one and a half years of runway left that “threatens Sushi’s operational viability.”

On Dec. 11, Grey said the DEX lost $30 million over the prior 12 months on incentives for liquidity providers (LPs).

Later that month he put forward a proposal to redesign the tokenomics of the SushiSwap (SUSHI) token to try to strengthen Sushi’s treasury reserves.

Grey confirmed in his latest post that "we took measures to secure our runway for multi-year operations."

As for Sushi’s other 2023 plans, the platform is also building a governance dashboard and focusing on user experience.

The dashboard showcases Sushi's budget, crypto wallets for each project and Treasury expenditure audit results.

“Ultimately, we will provide deep liquidity, optimal pricing, sustainable tokenomics, & an easy-to-use platform, placing you first in everything we build,” Grey said.

SushiSwap

SushiSwap’s new DEX aggregator will ‘10x our market share’ — head chef

DeFi should complement TradFi, not attack it: Ava Labs CEO | Davos 2023

Decentralized forex will reduce costs by as much as 80%: Report

Raydium exploiter moves $2.7M to crypto mixer Tornado Cash

DeFi market overview

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