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BNB Chain’s dApps Breaks New Ground: Report

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BNB chain’s dApps grew over the past weekend amidst the bear market. A tweet shared by BNB Chain’s official account on 5 December, revealed that dApps like The Velvet Capital and The Harvest have surged in terms of growth, contract development, and award recognition.

The Harvest for one was among the GAM3 Awards’ Game of the Year nominees; winners would be announced on 15 Dec 2022. Cross-chain AUM protocol Velvet Capital has registered a weekly growth of 15% in unique users.

Binance Smart Chain or BNB is the umbrella network of Binance’s layer-1 blockchain, created in September 2020 as a hard fork of the Go Ethereum [Geth] protocol.

Since BSC is an offshoot of Ethereum, this makes the chain compatible with the Ethereum Virtual Machine [EVM] and able to execute smart contracts and run decentralized applications.

Being EVM compatible also makes it easier for developers to move dApps from other blockchains, like Ethereum, Polygon, Solana, and Avalanche, to BSC.

When it comes to anything DeFi, the Ethereum blockchain is the gold standard notably for smart contracts and Dapps like P2E gaming, trading, and staking platforms, etc.

Here’s Why BNB Chain Is Gaining Prominence

Despite starting considerably later than Ethereum, BNB Smart Chain’s network activity has increased to a level that is comparable to Ethereum’s. Just two years after its start, BNB Chain has more than 218 million unique addresses and a TVL of around $5.2 billion.

Apart from that, the chain now hosts 1445 dApps including well-known projects such as PancakeSwap, BakerySwap, Alpaca Finance, and Venus Protocol.

These figures demonstrate that the user, business, and development communities on BNB Chain are thriving.

BNB Smart Chain also offers support in the form of financial grants, coaching, advice, and other forms of assistance providing incentives for developers and companies to build on the network.

But recently, one of its DeFi projects Ankr, fell victim to an exploit where anon hackers took advantage of an unlimited minting bug, TronWeekly reported.

Later, BNB Chain confirmed the hack and said it had blacklisted the exploiter. Binance founder and CEO Changpeng Zhao tweeted that the bad actor gained illegal access to a developer’s private key and used it to update the smart contract. The exchange has frozen about $3 million of funds moved to its platform.

Multiple DeFi Protocols Compromised In GoDaddy Hack

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Multiple DeFi Protocols were compromised after unknown attacker/s managed to exploit a vulnerability in the world’s biggest domain registrar Godaddy. There were unconfirmed reports that the hacker might have used Godaddy’s account recovery method to target the crypto domains.

Polygon-based DEX QuickSwap which was among the affected sites has regained access and stopped the phishing attack. It also mentioned that its funds were unaffected and were assisting other projects in “defending against this large-scale DeFi attack.”

One of Fantom’s biggest DeFi exchanges SpiritSwap managed to take quick action as the anonymous hacker manipulated the swap parameters and was able to take away not more than $18,000.

The DEX then provided another update stating that they have disabled swapping to prevent hackers from further stealing and assured that contracts and funds are safe but domain spiritswap.finance has been compromised.

SpiritSwap has suspended transactions, as of press time.

On the price front, Fantom’s native token FTM shed over 30% but recovered by 12.5% in the last 24 hours and is now trading at $0.36.

If we look at FTM’s history, the recent incident is Fantom’s fourth major hack in the past three months. In April, this year, FTM-based protocol Deus Finance succumbed to a flash loan exploit leading to a massive loss of over $13 million.

Prior to that, another FTM-run DeFi platform Fantasm lost more than $2 million in an exploit.

GoDaddy Hack used to redirect swapped funds across DeFi protocols

Given that several crypto projects use Godaddy to host their domains, the full extent of the damage is not clear at the time of writing this post.

That said, this is different from the recent “Coinzilla Ad Hack” where an ad caused a popup on sites like CoinGecko or Etherscan and when clicked, can drain one’s wallet. Here the attacker used the hosting platform GoDaddy appears to redirect swapped funds on DEXes like QuickSwap, and SpiritSwap.

As reported by TronWeekly, on 13th May, several other major crypto platforms were attacked in a phishing attempt. CoinGecko, EtherScan, and Dextools all warned users against malicious popups encouraging them to connect their MetaMask wallets.

DeFi wallet DeBank secures $25M in equity round led by Sequoia China

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Leading DeFi tracker protocol DeBank secured $25 million funds in an equity round spearheaded by US-based venture capital entity Sequoia China along with a host of several well-known crypto investment firms such as Dragonfly, Hash Global, and Youbi. The funding round also featured strategic investments from Coinbase Venture, Crypto.com, payment platform Circle, and crypto hard wallet creator Ledger.

Announcing the same via Twitter on Tuesday, the latest funding brought the wallet tracker’s total valuation to $200 million. For the uninitiated, DeBank is a cryptocurrency wallet designed to track DeFi data, including decentralized applications or exchanges [DEX] and DeFi interest rates. It also enables users to navigate and manage various decentralized assets and projects.

The platform includes analytics for Blockchain lending protocols, stablecoins, margin trading platforms, and others. DeBank was co-founded in 2018 by research and development expert Tang Hongbo who is also the Chief Executing Officer with its office based in China. As per his LinkedIn profile, the exec is based in Shanghai’s Jing’an district. Currently, the DeBank dashboard allows users to track 798 protocols across 17 chains like Ethereum [ETH], the Binance Smart Chain [BSC], Polygon [MATIC], Fantom [FTM], Avalanche [AVAX], and others as per data provided on its website.

In addition to that, six months ago, the platform announced a browser extension wallet geared towards DeFi users. The wallet called Rabby was built to switch automatically between chains, according to the blog post. The project targeted traditional MetaMask-like extension wallets which are ideal only for a single-chain scenario. Whereas, Rabby’s in-built pre-transaction risk-scanning feature aims to offer extra leverage in the highly competitive market.

As the year comes to an end, DeFi has truly evolved from the days when it was just a buzzword.

DeFi heralded a major shift in 2021

2021 has seen a major transformation from token-oriented days to a brand new DeFi oriented era with the rise of several DeFi platforms gaining mass adoption among users. Earlier in May, one of DeBank’s competitors- DeFi Dashboard Zapper announced raising $15 million in a fundraising round led by Framework Ventures, joined by Hollywood star Ashton Kutcher’s led Sound Ventures and entrepreneur Mark Cuban. Following that, in July this year, another decentralized startup Zerion too wrapped up an $8.2 million funding round to create a new alternative financial ecosystem for its users.

Cream Finance succumbs to third hack with a loss of $130M

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The decentralized finance (DeFi) lending and borrowing protocol Cream Finance once again suffered a hack that led to a loss of $130 million. The DeFi protocol operates on the Ethereum network but has been facing a series of hacks and the latest one happened to be the third attack.

The blockchain security and data analytics company PeckShield Inc. identified the attack as a flash loan, resulting in the theft of mostly Cream tokens, CREAM.

Cream Finance witnessed two more attacks in the past. In February, a flash loan hack caused a loss of $37.5 million, which brought the price of CREAM down by 30% within an hour after the attack. The story continued to August when Cream Finance was exploited again, with hackers making over 418 million in Flexa Network’s native token AMP and around 1,300 Ethereum (ETH).

The latest hack caused the price of CREAM to crash by around 35% in less than two days. CREAM is currently trading at $102.10.

Cream Finance joins streak of DeFi attacks

Despite being hit several times by hackers, Cream Finance is not the biggest or only DeFi protocol facing a loss. 

As TronWeekly reported, Poly Network, the famous interoperability DeFi protocol, also suffered from a similar attack leading to a loss of over $600 million worth of funds in August. Unfortunately, this was deemed the biggest DeFi hack in the history of the crypto world.

These recurring hacks are bringing voices calling intense attention to consumer protection in the DeFi industry. Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), while talking at the Yahoo Finance All Markets Summit, said that the DeFi space requires robust consumer protection strategies for healthy survival.

“There’s a lot of lending going on. There’s a lot of trading going on. And without protection, I fear that it’s going to end poorly.”

Gary Gensler, SEC chair

Gensler has always been very particular about user protection in the crypto world. He recently called out unregulated crypto markets and previously termed DeFi a “misnomer.”

Has Avalanche [AVAX] topped out after over 460% growth?

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Avalanche [AVAX] a relatively new layer-one solution has gained wide recognition of late. Its rally in terms of price and adoption comes at a time when the leading smart-contract platform, Ethereum, struggle with high transaction costs and slower processing times. Since hitting the June lows, Avalanche has been up by well over 460%.

A quick primer: Avalanche is essentially the brainchild of Cornell University computer science professor Emin Gün Sirer, and is often heralded as an “Ethereum killer.” It is designed to be a high-performance blockchain platform that provides a scalable and secure environment required for the creation of decentralized applications [DApps].

One of the massive driving factors was the announcement of Avalanche Rush last week, which happens to be a $180 million liquidity mining incentive program rolled out along with Aave and Curve. It is created to set the stage for more applications and assets to its thriving decentralized finance [DeFi] ecosystem.

Avalanche had previously lacked a bridge to port over digital assets. However, after the introduction of a new bridge, that enabled the transfer of assets between the Avalanche and Ethereum networks. Soon after this, the platform’s TVL saw an astonishing rise. As of 22nd August, the total value locked in Avalanche was $1.12 billion. As a result, the price of AVAX, the token underpinning the platform skyrocketed.

Are bullish cues in Avalanche [AVAX] fading?

The volatility on the AVAX market is intact and the rise in trading volume has supported the parabolic trend. The Chaikin Money Flow [CMF] also depicted a period of capital inflow into the coin market despite a minor dip. The Awesome Oscillator [AO] also aligned with the intense bullish momentum. The Relative Strength Index [RSI], on the other hand, though above the 50-median line, has bounced from the extreme overbought conditions that indicating AVAX’s sporadic rise facing sellers resistance. This could, at least in the short term, cause a minor pullback in the price of the asset.

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

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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.

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.

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

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.

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.

Uniswap Calls Massive Trade Volumes ‘Not Real’; Delta Hits Back

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Uniswap’s phenomenal growth over the short span of time has been lauded by market players and DeFi experts alike. It has emerged as one of the world’s largest decentralized exchange [DEX] sweeping significant volume in the market. However, the trading volume recorded on the 30th March on Uniswap was much higher than normal.

So what exactly happened on Uniswap?

It was DeFi protocol, Delta Financial’s native token, DELTA that was responsible for the brief and fake volumes on Uniswap. The token recorded a trading volume of more than $6.13 billion, meaning, it contributed to roughly 85% of the total volume on the DEX even as the liquidity stood at a little more than $16 million.

Delta is a newbie in the world of DeFi and identifies itself as on-chain options layer which uses a combination of liquidity standards to minimize premiums and provide competitive options price. In short, it essentially aims to solve the problem of expensive and volatile options trading especially due to lack of liquidity.

The large trading volume figures were due to Delta’s liquidity rebasing system. This is essentially an algorithmic mechanism of increasing the price to mint tokens over time. While this seemed similar to that of wash trading, since it requires swapping tokens back and forth in order to trigger high volume and price of a token, the inventor of Uniswap Protocol, Hayden Adams, clarified that while it is not wash trading, it also does not represent “real” volume either.

He also went on to say that the figures will soon be considered untracked volume on Uniswap.

Adams also stated that the current Delta stats will not influence Uniswap’s global trading volume and added that Delta’s strange protocols are the reasons behind the exploding figures.

Delta Financial has hit back with the following tweet:

“All DELTA data is completely frozen, as if trading is not happening at all. To top it off an engineer wrote ‘Scammy Token’ in the PR. Meanwhile, the volume is still misreported on all other tokens.”

CMS, Alameda Leads $4.9M Funding Round For DeFi Protocol

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Bitcoin’s surge has caused a ripple effect which was felt across the decentralized finance [DeFi] realm as well. In the latest development, a DeFi lending protocol called Alchemix has announced securing $4.9 million in a funding round on the 14th of March.

Interestingly, this round included some names of major industry venture capital groups who poured in capital into the DeFi protocol. Some of them include digital-asset-focussed principle investment firm CMS holdings, FTX’s parent company Alameda Research, crypto hedge fund Immutable Capital, investment firm Nascent, among others.

The team behind the DeFi platform revealed that it had agreed to sell its native ALCX tokens at the price of $700 per token for the total value of $4.9 million. Furthermore, the trading price at the time of the deal, meaning on the 11th of March was between $680-$800. Alchemix also disclosed that the proceeds of this funding round have been transferred to the founders to function as personal funding.

Up until the latest round, Alchemix had not received any funding. As per the official Discord post further stated,

“This is incredibly positive for the outlook of the project offering substantial benefits: Frees up the founding team to commit to full-time development – accelerating towards Alchemix V2. Facilitated our ability to generate funding via OTC, avoiding any sell pressure on the market”

DeFi: The Hot Place For Investments

DeFi has managed to cement itself center stage as the global financial establishment disrupter, flanked by the likes of Bitcoin and Dogecoin. There is a major influx of users, developers, experienced as well as novice investors in DeFi protocols lately.

According to a new study, the accredited investors in the United States were exhibiting a trend of growing inclination towards the world of decentralized finance. This was reported by Xanglo, in its latest survey which revealed that a vast majority of 67% of respondents out of 379 accredited investors in the country have knowledge about the burgeoning space.

Out of this cohort, 90% of respondents are likely to invest in the space in the next 12 months.

DeFi has generated real, working applications that have already managed to attract billions of money and would continue to do so with proper regulations at place.