Hashed, which is one of the largest cryptocurrency investment firms in South Korea, officially announced its investment in bZx through the private round before the token release this July.
Among its other investments such as Handshake, QuarkChain, and Oasis Labs, the firm had previously led a $1 million Pre-A Investment round with Dapp.com, the data analytics platform for decentralized app products built on blockchains.
Sharing the thesis behind the latest investment, the South Korean blockchain VC firm referred to bZx’s exploit that took place during the ETH Denver hackathon and stated,
“Those who failed and resiliently stood back up can accomplish growth much faster through their lessons learned. Just like we supported bZx, Hashed will also continue to support talented founders who stay resilient from failures and strive to win numerous challenges in the blockchain ecosystem.”
bZx, which is a set of smart contracts built on top of the Ethereum network, focuses on lending and margin trading. Months after launching site whitepaper in February 2018, it secured $7.8 million in their Initial Coin Offering [ICO] of BZRX tokens.
In February 2020, two hackers used flash loans to attack the protocol, first in a $350,000 attack and later in a $600,000 attack.
Despite this, Hashed believed that the bZx team has done everything in its power to fulfill its responsibility as a DeFi protocol. It further added,
“When bZx struggled through the aftermath of the attack, Hashed supported the team along the process. Indeed, we could actually witness how this team solved the unprecedented DeFi incident. We believe the team showed integrity”
However, not all were optimistic about the whole fiasco. For one, Robert Leshner, the Founder of the rival DeFi lending protocol Compound, had previously lashed out and said that the platform “isn’t capable of protecting user funds” and should “immediately cease operations until it can be thoroughly and completely audited”.
As a result of two back to back attacks, the total value locked [USD] in the protocol dropped from $19.447 million to $7.692 million in a period of just two weeks. Since then, the figures have shown almost no signs of recovery. At the time of writing, TVL locked in bZx was just $646.461K.