TronWeekly

Crypto World News

You are here: Home / Archives for News / DeFi

DeFi

CFTC Commissioner is not a big fan of DeFi; calls it ‘illegal’ since it defies archaic laws

by

DeFi has gained significant traction this bull season. It has not only attracted a myriad of previously skeptic market players to rake in profits but has now come under the scrutiny of law enforcement agencies. In the latest development, the Commissioner of Commodity Futures Trading Commission [CFTC], Dan M. Berkovitz has called for a crackdown on unregulated derivatives platforms in the decentralized finance world.

CFTC exec just termed DeFi “illegal”

Berkovitz believes DeFi derivatives platforms may violate the existing Commodity Exchange Act [CEA]. In a keynote address, the commissioner was quoted saying,

“There is no intermediary to monitor markets for fraud and manipulation, prevent money laundering, safeguard deposited funds, ensure counterparty performance, or make customers whole when processes fail. A system without intermediaries is a Hobbesian marketplace with each person looking out for themselves. Caveat emptor—“let the buyer beware.”

He also opined that “unlicensed” DeFi markets for derivative instruments are a bad idea and that he does not see how it is legal under the act which requires futures contracts to be traded on a designated contract market [DCM] that are licensed and regulated by the CFTC.

Berkovitz went on to speculate that it is “untenable” to permit “an unregulated, unlicensed derivatives market” to function adjacent to, what he considers, “a fully regulated and licensed derivatives” market.

Acknowledging the lack of “safeguards’ in the market as well as customer protections, the commissioner said that it would not be fair to enforce the obligations, restrictions, and costs of regulation upon some DeFi while allowing their unregulated rivals to exist wholly free of such obligations, restrictions, and costs.

He said that DeFi should not be allowed to transform into “an unregulated shadow financial” market in a direct match with its regulated counterparts. He also urged that the CFTC along with other regulators of the country, need to concentrate more on the growing concern and address regulatory transgressions appropriately.

Will Uniswap [UNI] break rangebound action to soar above $30?

by

The cryptocurrency market has gathered steam over the past day. Uniswap [UNI] has closely followed the trend to amplify its weekly gains to nearly 6%.

Since the crash on the 19th of May, the digital asset shed the gains it made during the rallies in the first quarter of the year. It fell right back in early February levels. However, the UNI bulls are again trying to push the price above a crucial point of resistance as the market hinted at a recovery.

After posting gains worth 5.12% over the past 24-hours, Uniswap [UNI] was exchanging hands at $28.74. The defi token registered a market cap of $16.16 billion. and a 24-hour trading volume of $563 million.

Uniswap [UNI] Daily Price Chart:

UNI1

After a steep fall, Uniswap [UNI] began to oscillate within a tight range and a consistent upper ceiling, which, if broken, could be instrumental for the token. Both the moving averages hovered above the UNI candles.

The gauge between the two appeared to decrease, as such the 50 DMA [Pink] declined mildly towards the 100 DMA [Blue]. The latter remained pretty steady. Hence, if a bearish crossover transpires, it would be damaging for the price of UNI in the near term.

Uniswap’s moderate volume, however, could aid in pushing the price upward.

UNI2

The Parabolic SAR’s dotted markers moved below the candlesticks and pictured an uptrend for the defi coin. The building up of a bullish momentum was depicted by the green closing bars of Awesome Oscillator.

RSI was still below the 50-median line and the buying pressure has been rising but very slowly.

If the UNI/USD pair turns down from the $30-level again but bounces off the immediate support area of $22.22, it would suggest that bulls are accumulating on dips. However, if the lower level is broken, Uniswap could potentially see severe losses and risk a downfall to another support point of $16.8, a level is last seen almost four months ago.

In the case of a strong market momentum leading to a bullish setup, UNI could target resistance levels of $37 and $43 after the surging past the daily moving averages.

Another Binance Smart Chain-based DeFi Platform Loses Millions In Exploit

by

There is no respite for decentralized finance-based platforms on top of Binance Smart Chain [BSC]. This time, it was the AMM protocol called Belt Finance that suffered a loss of millions after software exploitation.

According to Belt Finance, a flash loan attack was initiated on the Binance Smart Chain’s 4Belt [USDT/USDC/BUSD/DAI] pool. The hacker reportedly created a smart contract that used popular decentralized exchange PancakeSwap for the purpose of flash loans and exploited its beltBUSD pool. The malicious entity, however, did not stop there and proceeded to attack its underlying strategy protocols as well as executed the contract 8 times to rake in a total profit of 6,234,753 BUSD.

The Binance Smart Chain-based defi protocol also revealed that beltBUSD vault users endured a loss of 21.36% of funds, while 4Belt pool users sustained a loss of more than 6% of funds. Other pools/vaults were not affected. Soon after detecting the attack, the defi platform paused withdrawals and deposits in a bid to prevent more losses. It added,

“While we are aware that this may cause our users inconvenience, it was done to prevent the same exploit from attacking our other vaults/pools. All other pools/vaults and all funds remain unaffected and safe from this attack, and we have now patched the attack vector that allowed this exploit of 4Belt and beltBUSD.”

Belt Finance also revealed that the team was devising a compensation plan that will be released within the next 48 hours.

According to the Rekt Blog, which analyses defi exploits, explained that the lost $6.3 million in a total of eight transactions.

Binance Smart Chain Weighs In

The bloodbath for the BSC does not seem to stop anytime soon. In just nine months, the network’s rise to prominence has attracted many platforms. However, several of these defi protocols operating on top of Binance Smart Chain’s decentralized finance ecosystem have suffered back-to-back hacks and exploits in a short period of time.

Binance Smart Chain had recently stated that the “well-organized hackers” behind the flash loan attacks and security breaches were targeting the platform specifically.

Binance Smart Chain believes hackers are specifically targeting it following back-to-back DeFi exploits.

by

Binance Smart Chain believes hackers are specifically targeting it following back-to-back DeFi exploits.

Several defi protocols built on top of Binance Smart Chain [BSC] decentralized finance ecosystem have suffered one after another hacks and exploits in a short period of time that has stemmed especially this past month. The platform believes that the recent flash loan hacks were orchestrated against BSC specifically.

The platform said on the 30th of May,

“There are >8 flashloan hacks recently, we believe, an well organized hackers are targeting Binance Smart Chain now. It is very challenging time for the BSC community.”

In a series of tweets, Binance Smart Chain also went on to urge the team behind the decentralized applications [DApps] to work with their audit companies to do another health check.

It also asked the cloned and forked defi projects, to “double and triple check” the changes from the original version and employ necessary risk control measures to actively identify any peculiar activities in a real-time manner and halt the protocol if any such strange activity indeed occurs.

Binance Smart Chain’s Rise to Fame

Since its inception last September, BSC saw tremendous success. The activity on Binance Chain’s parallel blockchain has dramatically soared as it continued to make headlines as one of the more viable rivals to the Ethereum network which was riddled with scalability issues.

However, as BSC rose to popularity, so are the bad actors that have breached various protocols and managed to siphon off with billions in crypto.

Binance had recently stated that it was not responsible for exploits on BSC protocols. Samy Karim, who happens to be the coordinator of business and ecosystem development at the cryptocurrency exchange, had earlier stated that Binance Smart Chain is a public permissionless infrastructure that enables anyone to deploy. He went on to add,

“You have malicious actors there and hacks, and exploits in defi are not new and definitely not unique to BSC.”

In another related news, BSC had added the blockchain analytics and cryptocurrency intelligence company, CipherTrace for the purpose of tracking illicit transactions.

Polkadot’s [DOT] rapid buying the dip fails to invalidate bearish cues

by

Riding along with the wave of the broader cryptocurrency market, Polkadot [DOT] gained steam to make a quick rebound. Several other defi tokens also staged a recovery, both big and small, as part of the overall rally in digital assets.

After two weeks of incessant bearish pressure, DOT tokens fell to levels that were last seen in February this year as investors exited their investments. It would be interesting to see if the technicals are in favor of the major comeback.

Over the past 24-hours, Polkadot was up by 5.50% which pushed its price to $23.57. The defi token held a market cap of $23.04 billion and a 24-hour trading volume of $3.27 billion, at the time of writing.

Polkadot [DOT] Daily Price Chart:

DOT 1

Polkadot appeared to be heading for a v-shaped recovery after hitting a nearly 4-month low price. The Volume has firmly supported the digital asset’s rise after the free fall as investors jumped in to rake in profits on the 19th of May. After this level cracked, investors bought another dip at a lower level three days later following which DOT jumped above.

The moving averages, however, suffered a bearish crossover and was above the DOT price candles which depicted a weakness in the bulls.

dot1

The dotted markers of Parabolic SAR aligned above the DOT price candles indicated bearish cues in the market. The red closing bars of Awesome Oscillator [AO] also depicted a weakening bearishness in the coin market. the RSI was also yet to recover from the bearish territory.

Hence, Polkadot’s recovery in progress could potentially halt and could result in the price turning down from $18.01-support, a break below which could sink it below $8.3 and $4.5 respectively.

On the other hand, a move above the resistance at $29.01 will invalidate this prediction. Regaining the range between $29-$38 could potentially flip bearish conditions and eventually push the price of Polkadot to another point of resistance at $45.7.

Yearn Finance [YFI] Undergoes V-shaped Recovery After Hitting Local Bottom

by

After suffering heavy losses during the market-wide collapse, Yearn Finance [YFI] has regained the momentum that helped it breach a crucial resistance level. However, the defi token was still down by more than 33% over the last 24-hours.

The whales had aggressively bought during the dip, which pushed the prices of the coins higher. Despite the ongoing relief rally, speculations regarding the market potentially heading for a bottoming phase emerged.

Yearn Finance [YFI] surged by 13.23% over the last day to climb to a price of $46,492. At the time of writing, the digital asset registered a market cap of $1.69 billion and a 24-hour trading volume of $1.37 billion.

Yearn Finance [YFI] Daily Price Chart:

YFI1

Yearn Finance [YFI] dropped sharply before undergoing a v-shaped recovery. While this abrupt price movement did help the defi token to climb above the 100 DMA [Blue], the 50 DMA [Pink], however, continued to hover above the YFI price candles, thereby resisting more upswing.

The increasing volume however backed the price of the token in the latest surge, which, if maintained, can push it higher potentially invalidating the bearish calls.

Recovery

YFI3

The Yearn Finance [YFI] broke below a crucial support zone on the 23rd of May. This resulted in severe bearish pangs in the market. However, the long tail on the candlestick the very next day suggested the bulls purchased the dip which led to the recovery.

The Chaikin Money Flow [CMF] appeared to be climbing above the zero line, meaning the outflow of capital from the coin market has been on a decline.

The MACD also appeared to be resuming the buying demand as it heads for a bullish crossover. The RSI made a jump towards the 50-median line depicting a sentiment of decreasing selling pressure in the market after the formation of a local bottom.

If the price of Yearn Finance [YFI] turns down from the 100 DMA moving average of $43,665, the bears will make one more attempt to resume the downtrend. Furthermore, a break below $32,972 could open the doors for a drop to the next support at $27,251.

However, if the bulls can push the price of the defi token above $53,733, it could target other resistance levels of $72,740 and $82,889 respectively.

DeFi TVL crashes by over 37% in less than a Fortnight

by

In what seemed like defi heading for another hot summer, instead felt the burn of the market-wide sell off.

It world of decentralized finance has been one of the biggest drivers of the surge in the broader cryptocurrency market over the past few months. However, the space has taken quite the beating after the series of massive corrections unfolded in the market last week.

According to the most recent DeFiLlama stats, the total value locked [TVL] across all decentralized finance platforms tumbled from an all-time high of $164.2 billion on May 10th to $95.5 billion two weeks later.At the time of writing, the TVL value had noted minor recovery and was found to be at $102.9 billion. However, it was still down by more than 37% in a period of fewer than two weeks.

DEFI

It all started with Tesla Technoking, Elon Musk blocking Bitcoin payments which sparked the first major instance of sell-off. Bitcoin also suffered a setback after the hackers of Colonial Pipeline siphoned off with $90 million in a BTC ransom. In addition, China’s back-to-back reports on crackdowns of the cryptocurrency space further proved damaging.

DeFi tokens crumble

The crash in the defi space’s TVL is a result of the depreciation in the value of the tokens. The correction in the market has hit investors hard, especially the newer cohort, most of whom forayed the ecosystem at the beginning of the bull season that started late last year.

Over the past week, these tokens have tanked way more than Bitcoin [BTC] and Ethereum [ETH]. Top tokens such as Uniswap [UNI], Chainlink [LINK], Aave [AAVE], Maker [MKR] was still down by more than 45%, 40%, 44%, and 24% respectively.

Several projects on the decentralized finance space this quarter either pulled the rug or executed an exit scam or suffered a flash loan. These were especially observed on multiple Binance Smart Chain protocols which further added to the investors’ woes.

DeFi protocol developers pull an exit scam; siphons off with $32M

by

DeFi has witnessed spectacular growth off late. While it does bring in limitless opportunities for the participants in the market, it also tags financial perils along with it.

in 2021 alone, exit scams in the decentralized finance space have increased at a worrisome pace. This time investors fell victim to DeFi100, a decentralized finance protocol built on the Binance Smart Chain. Reports alleged that the founders had run away with $32 million in investors’ funds.

The entities had posted a vicious message on the website which said: “We scammed you guys, and you can’t do shit about it”

DeFi100

DeFi100’s only clarification following the incident was a tweet in which it said their website was hacked yesterday and the message was written by the hackers. Shortly thereafter, the website showed an error 404 message.

Some speculated that several projects are bound to show their true colors as the bull season fades and hence it there could be a huge increase in exit scams over these next few months. One crypto analyst urged market players not to invest in projects that are very new, backed by anonymous teams, made as memes, and lack real utility.

Another twitter user and a community member who goes by the pseudonym ‘CryptoDragon‘ stated,

“After the dev scammed everyone and posted this picture on the site, some angry people found his internet footprints and exposed his real identity and location. The scammer has now been reported to Interpol and local authorities.”

Defi 100’s native token crashes

chart 2

After the developers absconded from the project, Defi 100’s native token, D100 took a plunge to its lowest value. According to CoinGecko’s latest chart, the defi coin was down by more than 25% which drove its price to $0.040, at the time of writing.

Meanwhile, crimes have become more pronounced in decentralized sector as they continued to boom while attracting bad actors. Along the same line, the crypto intelligence company CipherTrace had recently stated that while losses from cryptocurrency theft, hacks, and fraud declined sharply in the first four months of 2021, the same cannot be said about the defi ecosystem. The report stated that crime in the burgeoning “decentralized finance” space hit an all-time high.

Binance Smart Chain DeFi PancakeBunny Suffers Flash Loan Exploit

by

Another day, another flash loan attack on a defi protocol.

A Binance Smart Chain [BSC] decentralized finance [defi] yield optimizer project called PancakeBunny, has supposedly suffered an “economic exploit”. According to the PancakeBunny team’s official post on Twitter, the protocol was subjected to a flash loan attack from an external actor.

However, the platform clarified that none of the vaults on the platform were compromised.

“We would like to remind the community that no vaults have been compromised. The exploit was an economic exploit that attacked the price of BUNNY, using flash loans. We repeat, no vaults have been breached.”

The malicious entity reportedly borrowed “a huge amount” of Binance Coin [BNB] on DEX Pancakeswap and went on to manipulate the price of USDT/BNB as well as BUNNY/BNB. Subsequently, the hacker dumped all of the acquired BUNNY in the market which led to the crash in the token’s price.

PancakeBunny rebuffed reports that claimed that the attacker siphoned off with $1 billion worth of tokens but has not revealed the actual figures yet. According to calculations, the exploit drained over $200 million from the yield platform’s smart contracts. However, the blockchain security firm Certik said that the losses were around $40 million. Its tweet regarding the same read,

“An alert was published at Certik over an incident on PancakeBunny, which suffered from a FlashLoan attack and resulted in a loss of ~$40M (114K WBNB & 697K BUNNY). An illustration of exploited asset movements is presented & we are actively monitoring further TXs.”

Certick

Further making the situation worse, the hacker left a rabbit-related pun as a note after the execution of the transaction that read “Aren’t Flashloans Earitating”

Notably, the BSC-based defi project is led by Mound, a startup that secured $1.6 million from the exchange’s venture capital and incubator arm, Binance Labs recently.

DeFi Token, BUNNY Free Falls

chart

The native token, BUNNY was trading above $230 before the incident. However, it slashed its gains by more than 80% over the past 24-hours and was currently trading at $31.48, according to CoinGecko.

DeFi Options Platform FinNexus Exploited; FNX Token Crashes By 90%

by

DeFi hacks and rug pulls have become common by the day.

FinNexus, a decentralised finance [DeFi] options platform, was the most recent victim of a malicious entity’s exploit. While FinNexus has yet to publish a post-mortem report, the firm has cautioned users to withdraw their funds from the pools.. Its tweet regarding the same read,

“We regret to inform our traders and investors that the FinNexus erc20 contract appears to have been hacked. For safety reasons please withdraw your funds from the pools. The team is working on this issue and we will provide updates as they become available.”

The platform’s claims of the event being a smart contract hack was rebuffed by popular DeFi analyst and researcher, Chris Blec who speculated that either this is a case of a stolen admin key or was used maliciously by a team member.

What exactly happened with the DeFi Platform?

After digging deeper, another DeFi research analyst Igor Igamberdiev observed that FinNexus [FNX] contract deployer changed the token owner to some address on both Ethereum [ETH] as well as Binance Smart Chain [BSC] network. This address reportedly minted 323 million FNX [which was worth around $6M] on Ethereum and 60 million FNX [approximately $1.6 million] on Binance Smart Chain.

Following the minting, the attacker started dumping coins. In total, the decentralized options platform incurred a loss of $7.6 million.

1 1

So now the community was left wondering if this was a case of rug pull or stolen private key and FinNexus is yet to provide a conclusive report on the same.

FNX Crashes

FNX

Following the development of the exploit, the DeFi platform’s native token, FNX, crashed by more than 90% in the last 24-hours. Before the exploit, it was trading above $0.3 however, its price went on a downward spiral to a new low of $0.062, at press time. The crash could be attributed to the fact that a major portion of FinNexus’ token collateral was liquidated during the attack.