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

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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.

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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.

Ethereum’s Vitalik Buterin: Uniswap’s Native [UNI] Should Become Oracle Token

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Ethereum’s Vitalik Buterin is making a strong case for Uniswap’s native, UNI token.

While talking about the importance of a highly secure price oracle in the success story of the decentralized finance realm, Ethereum Founder Vitalik Buterin went on to point that DeFi protocol, Uniswap’s native token ‘UNI’ is in an “excellent position” to be a token for an oracle.

The Ethereum executive called for the need of a robust token-based decentralized oracle for a deFi project on the Uniswap Governance Forum today. He mentioned that it should be based on a token with a large market capitalization.

Uniswap – Highly Secure Oracle System?

While talking about the importance of efficiency of an oracle, Buterin stated,

“An inefficient oracle can always be augmented with a game where one party claims a value and only if another party disagrees is the oracle actually called. Cost of attack, on the other hand, is absolutely essential to maximize, and thus market cap is key. “

The founder then doubled down on two of the high market cap tokens on Ethereum which are Chainlink [LINK] and Uniswap [UNI].

Buterin asserted that the supporting oracles would not just be an act of “altruism” for Uniswap but would also benefit the decentralized exchange with a stablecoin ecosystem that is strong.

Chainlink has dominated the oracle realm for some time now. However, there is a need for a “simple alternative specialized for high-value”, according to the exec.

Meanwhile, Uniswap v3 has been touted as heavily optimized toward ultra-high capital efficiency for stablecoin, hence, it is likely to draw very high amounts of fee revenue from these trades. He also went on to add that if the volume picks up and the robust synthetic assets surface on-chain, then this would be a more bring about more valuable prospects for Uniswap.

Buterin also stated that while the base layer of Ethereum needs to remain governance-minimalist, layer 2, on the other hand, should be more ambitious and that Uniswap, which happens to be one of the largest decentralized exchange on the Ethereum ecosystem, could also take on more responsibilities which includes price oracle offerings.

According to Buterin, this could be a potential step towards Ethereum’s objective of not just a decentralized finance ecosystem and also an increasingly decentralized governance [DeGov] ecosystem.

Yearn.finance TVL smashes past $4B TVL while YFI token hits above $80k

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Yearn.finance and its native token YFI has broken many records this quarter, and there is no stopping it.

Thanks to Ethereum’s meteoric rise, decentralized finance [deFi] protocols, and their native tokens have been on a surge lately. The digital asset management platform, Yearn.finance has recorded yet another milestone as collateral locked in it surged to a new ATH.

According to the deFi platform’s latest edition of the weekly newsletter, the total value locked [TVL] in it has surpassed $4 billion. Since the beginning of the year, the TVL figures have maintained a consistent rise and have not seen any significant downturn. As of the 12th of May, Yearn’s TVL was found to be at $4.48 billion.

YFI TVL

The report mentioned that Yearn.finance’s TVL doubled from $2 billion to $4 billion in a period of just 32 days. This in contrast to the deFi protocol’s jump from $1 billion to $2 billion in total value locked which took a whopping 226 days.

Yearn’s blog also stated,

“Yearn is continuing to see parabolic and continuous growth among its products with no indication of growth slowing down. The Iron Bank product has seen notable increases since the start of April, in conjunction with sustained growth of our v2 yVault product line.”

Yearn.Finance’s Native YFI Records ATH

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Its governance token, YFI, however, had a rocky start in the starting of 2021. Despite a minor breakout, Yearn.finance’s native asset has traded below $40k for the most part of the first quarter. It was amidst the crypto rout in the last week of April, that YFI gained some serious upward momentum that has been in continuation to this day.

In a matter of just two weeks, YFI has doubled in terms of its price and broke above $82k following a short-term period of consolidation. Despite a lackluster price movement for almost two quarters, YFI became the best performer of the week, among its peer deFi tokens, as it accrued gains of nearly 60% over the last 7-days.

DeFi Protocol Rari Capital Loses ~$10M In High Profile Exploit

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Decentralized finance [DeFi] protocol, Rari Capital was exploited on Saturday after an attacker siphoned off with nearly 2600 ETH, or approximately $10 million.

In a post-mortem report, the Co-Founder of Rari Capital, David Lucid revealed that the funds were extracted from the protocol’s Ethereum Pool before the malicious entity was stopped when the contracts were halted. The net loss equated to 60% of all users’ funds in the said Ethereum Pool.

What exactly unfolded at Rari Capital’s ETH Pool?

The Rari Capital Ethereum Pool deposits ETH into Alpha Finance’s ibETH token as one of the DeFi platform’s yield-generating strategies. This strategy is essentially involved in tracking the value of its ibETH as ibETH.totalETH() / ibETH.totalSupply(). The exploit was related to this ibETH vault inside which the attacker reportedly executed a few steps repeatedly. Following are the steps that were carried out on loop:

  1. Ether [ETH] flashloan from the non-custodial decentralized exchange, dYdX was noted.
  2. Ether [ETH] deposited into the Rari Capital Ethereum Pool.
  3. The value was manipulated by inflating it artificially high.
  4. More Ether [ETH] was withdrawn from the platform’s Ethereum Pool than the attacker deposited because its balances were artificially inflated.
  5. In the end of ibETH.work, the value of ibETH.totalETH() bounced back to its true value, which resulted in the Rari Capital Ethereum Pool’s balances to lower than they were prior to the exploit. The malicious entity ended up withdrawing a lot more than it deposited since the balance was artificially pumped.

The Rari Capital contributors were unable to understand that ibETH.totalETH() could be manipulated for the duration of these external calls from ibETH.work. Furthermore, the exploited code was reportedly audited by blockchain security platform, Quantstamp.

While talking about few steps to implement to mitigate the risks of attacks in the future, Lucid stated,

“Of course, we hope to enlist more top auditing firms other than Quantstamp and Omniscia. We already have another audit planned with OpenZeppelin.”

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The native token behind the deFi protocol, the Rari Governance Token [RGT] crashed by more than 20% following the exploit. It was currently exchanging hands at $13.86 after the drop. It also negated its weekly gains by 5.96%.

Binance smart chain invests in DeFi protocol lab under the $100M Fund Set-up

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Binance Smart Chain [BSC] has infused reportedly an undisclosed sum of funds into the decentralized finance [DeFi] called DefiDollar. The amount comes under the $100 million fund set up to further advance the DeFi ecosystem on Binance’s blockchain network.

According to the official blog post by the platform, the investment led by Binance Smart Chain is a strategic move to boost the decentralized finance ecosystem by supporting a team such as DefiDollar to bring about innovative products that provide – indexes, yield diversification as well as better capital efficiency.

DefiDollar describes itself as a “Defi Protocol Lab” that aims to take DeFi to the masses and also intends to simplify access to Web3.0 based decentralized finance products.

Siddhartha Jain, COO and Co-Founder of DefiDollar commented on the development,

“We aim to create value for users via our DeFi focused product suite. Our future roadmap revolves around launching value-added products like ibBTC and Opeth. These will help the protocol serve a wider audience and help users to access the composable power of DeFi in an intuitive and easy-to-use manner.”

The executive of the DeFi platform also revealed the team’s intentions to expand its multichain presence and have launched the protocol, as well as a savings account, on Binance Smart Chain [BSC] which enables access to users who previously got priced out due to high fees.

DefiDollar also plans to create value across the full spectrum of decentralized finance activity on Binance Smart Chain, from the savings product to ibBTC.

Binance Smart Chain’s Rise To Prominence

BSC

Five months into 2021, the sector shows no sign of slowing down. Binance with BSC has been nothing short of a trailblazer among the centralized entities in the DeFi space. It has been growing exponentially and has cut into the market leader, Ethererum’s share.

As of 6th May, the total value locked [TVL] in the Binance Smart Chain ecosystem was found to be nearing $50 billion.

Ethereum-based DeFi, Uniswap’s 3rd Iteration Goes Live

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Popular decentralized exchange, Uniswap has announced the launch of its V3 deployment on the Ethereum mainnet. This highly anticipated and ambitious version of the protocol promises to let users more control over the liquidity they provide and feature more upside for riskier trades.

In short, the main objective of Uniswap v3 is to make the platform “the most flexible and efficient AMM ever designed.”

“Uniswap v3 is the most powerful version of the protocol yet, with Concentrated Liquidity offering unprecedented capital efficiency for liquidity providers, better execution for traders, and superior infrastructure at the heart of decentralized finance.”

What Does Uniswap v3 Entail?

This is what the third iteration of the decentralized finance [DeFi] protocol Uniswap involves:

Firstly, Uniswap has focused on concentrated liquidity which is any AMM’s basic functionality. The platform revealed that the liquidity providers [LP] will be able to concentrate their capital within custom price ranges, thus offering greater amounts of liquidity at desired prices. As a result, the LPs build individualized price curves that reflect their own preferences.

Secondly, the DEX platform is also introducing multiple fee tiers to enable investors to identify their risk levels while trading volatile assets.

Lastly, Uniiswap will be adding another crucial feature of the “easier and cheaper” oracle. This version will provide significant improvements to the already existing time-weighted average price [TWAP] oracles. These oracles act as a critical piece of DeFi infrastructure. Over the past couple of months, it has been integrated into dozens of projects. The V3 aims to ensure the calculation of any recent TWAP within the past ~9 days in a single on-chain call to mitigate the risk of erroneous data.

Uniswao

Besides, it is a cut-throat competition in the realm of decentralized finance. Especially with the fast flourishing Binance Smart Chain’s projects, the space is heating up. Currently, Uniswap is the fourth-largest DeFi protocol on the Ethereum blockchain according to the latest stats by DeFi Pulse. On the 6th of May, it registered a $7.16 billion in terms of total value locked [TVL].

Binance Smart Chain’s DeFi Project Losses Over $30M In Flash Loan Exploit

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A DeFi project Spartan Protocol’s contract suffered an exploit that led to loss of more than $30 million in funds. The incident reportedly originated due to a flawed liquidity share calculation in the protocol, that resulted in the drainage of assets from the pool.

In the post-mortem blog post, the security firm PeckShield detailed,

“In particular, the specific hack inflates the asset balance of the pool before burning the same amount of pool tokens to claim an unnecessarily large amount of underlying assets. The consequence of this attack results in more than $30M loss from the affected pool.”

The decentralized protocol [DeFi] was built on Binance Smart Chain for incentivized liquidity and synthetic assets. While first reporting the incident Spartan had revealed that the malicious entity used $61 million in Binance’s native token BNB to control the pools via an unknown economic exploit path to remove almost $3 million in funds from the pools.

According to the post-mortem report, the flash loan was taken on BSC’s popular DEX PancakeSwap for 100,000 wrapped BNB [wBNB]. This amount was to be paid back at the last step with 260 wBNB as the flash loan fee. However, the hacker allegedly swapped the wrapped BNB to Spartan’s native token – SPARTA five times via this exploited pool of the protocol. It swapped wBNB to SPARTAN an additional ten times through the same pool.

After inflating the asset balance in the pool, tokens were burnt to withdraw the liquidity. This process was repeated until the flash loan of 100,260 wBNB was returned and the hacker drained more than $30 million from the DeFi protocol.

DeFi Flash Loan Attacks One After Another

Rekt, which posted another assessment of the incident, also stated that Spartan’s latest exploit with $30 million funds drained is the sixth biggest incursion on its leaderboard.

This news comes jist days after the attackers of yet another Binance Smart Chain’s DeFi exchange Uranium Finance siphoned off with more than $57 million in exploit from a similar attack. In April 20th, layer two protocol EASYFI lost around $59 million.

DeFi Major Aave Rolls Out Liquidity Mining Program

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Decentralized finance [DeFi] lending giant Aave announced the initiation of its liquidity mining program for V2 after the Aave Improvement Proposal [AIP] 16 received “overwhelming” affirmative votes from the community on the 24th of April and was officially executed.

The AIP was put forth by user Anjan Vinod, who happens to be an investment analyst at blockchain and DeFi focussed investment firm, ParaFi Capital. The launch of liquidity mining incentives for the Aave V2 protocol includes paying out governance token rewards exceeding 20% to users who borrow stablecoins. According to the DeFi platform, most of the rewards will target stablecoins in a bid to boost stablecoin liquidity.

The lending platform revealed that 2,200 staked AAVE [stkAAVE] will be allocated at a 50/50 ratio between depositors and borrowers until the 15th of July and is worth approximately $880,000 at press time prices. The distribution strategy is based on the markets’ borrowing demand.

Over two-thirds of rewards have been directed to the stablecoin USD Coin [USDC] and Tether [USDT] markets. The remainder of around 33% is being distributed among Aave’s DAI, ETH, wBTC, as well as GUSD markets. The platform’s official tweet detailing the announcement read,

“AIP 16 increases the liquidity in the Aave Ecosystem Reserve, which can be used to fund grants, devs, and builders through a community-led grants programme (currently an ARC on the governance forum) EyesHandshake”

The main objective of the program’s goal is further advance the lending and borrowing activity across markets and amplify the decentralization of the protocol’s governance that can be achieved by the distribution of governance tokens to more number of users.

In the beginnng, it only acquired around 60% support from its community for the AIP when first published on governance forums. The community had a change of heart after witnessing the success of other liquidity mining schemes following which they let the platform experiment in the new initiative.

Aave’s TVL Shoots Up To ATH

AAVE

According to the latest stats by DeFi Pulse, the total value locked [in USD] in the open-source non-custodial protocol has surged to a fresh all-time high of $7.52 billion on the 27th of April. At the time of writing, it became the third-largest DeFi protocol on Ethereum trailing behind other lending platforms – Maker and Compound.

DeFi’s TVL Surpasses $60 Billion As Institutional Interest Surges

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DeFi mania might have subsided, but the influx of capital into the ecosystem has not. Along with their centralized counterparts, these decentralized platforms are slowly becoming essential in attracting attention to many promising projects. It is needless to say that the market has grown by leaps. In fact, DeFi saw an astonishing increase in terms of the value locked by more than 50x in the past 12 months alone.

In yet another development, the TVL [USD] across various decentralized finance projects has surpassed $60 billion on the 16th of April. This was according to the latest chart published by DeFi Pulse.

The figure took a plunge a few times in between, especially in the first week of this month, but has made a strong recovery this week and was now found to be hovering quite close to its peak. Amidst the chaos of the ongoing bull run, institutional entries, the DeFi ecosystem has been quietly flourishing to levels never seen before.

DeFi

Diving Deep Into DeFi

To put things into perspective, USD denominated volumes for decentralized exchanges [DEX] have increased by 65 times what they were this time last year. It was also found that the trade volume on these DEXs, denominated in USD, has risen more than 50 times what it was last year.

With this, the global crypto market cap has also appreciated over 10x since then. Decentralized finance’s adjusted growth rate was, however, down from 10x between the years 2019 and 2020. This was revealed by Bison Trail’s Protocol Specialist, Elias Simos who tweed that “DeFi is roaring back”.

Talking about the rise of the sector, Simos went on to add,

“If you told me in April 2020 that DeFi would be posting these kinds of numbers in a year, I would have told you maybe 2023. Yes, reflexivity plays a huge part in it all. But the growth rates are persistently high when you look at pockets that are somewhat insulated from it.”

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The DeFi marketplaces are constantly shifting and evolving. On further gauging the space, it was that the space is anticipating yet another bull season with major asset management funds and high-street financial institutions are now getting involved. The launch of DeFi ETFs demonstrated the increasing interest among high-value clients, corporates and institutions.

Tron’s DeFi Ecosystem TVL Surges Past $15 Billion

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Over the past several months, the Tron blockchain has emerged as one of the crucial venues for decentralized finance [DeFi] platforms. The network has hosted several prominent projects since its entry into the decentralized realm.

In yet another milestone, its DeFi sector has hit a new record in the form of total value locked [TVL]. According to the project’s founder and CEO Justin Sun’s latest tweet on the same, TVL Tron’s DeFi ecosystem has surged to an astonishing $15.1 billion as of the 17th of April.

It is important to note that DeFi has taken a backseat in terms of social media discourse and FOMO. However, behind the curtains, the space has been quietly flourishing. Tron, for one, has seen a significant uptick in activity related to it.

The latest data revealed that the total value locked in JustLend, which happens to be Tron’s official lending platform, stood at $2.90 billion. On the other hand, its decentralized trading protocol JustSwap amassed $2.27 billion in TVL figures, The deFi system of USDJ stablecoin on Tron which is called JustStable, raked in $2.48 billion.

Meanwhile, the TRC20 Token Backed 1:1 By Bitcoin, Ethereum, and Litecoin – Just BTC/ETH/LTC, scored a combined TVL of $2.41 billion. Also, Total TRX Frozen, with respect to energy as well as bandwidth, has noted a significant increase and was found to be at $5.032 billion.

Tether on Tron Exceeds Ethereum Amidst Stablecoin Rush

CoinMetrics

In addition to the growing demand in terms of DeFi, the Justin Sun-founded blockchain has observed massive stablecoin demand. So much so that the amount of the world’s largest stablecoin, Tether [USDT] on the Tron blockchain has surpassed that on Ethereum.

On the 14th of April, TRC-20 USDT has reached $24 Billion and this growth was accompanied by high transaction fees on Ethereum that has led investors to look for efficient and cheaper alternatives to lock in gains. Previously, ERC-20 USDT dominated the charts for the major part of 2020. However, the trend changed in the first quarter of 2020.