DeFi exploits and attacks have become increasingly commonplace as the space evolves and attracts both money and participants. The latest of these attacks took place earlier today and saw over $14 million worth of stolen crypto.
Furucombo, an Ethereum-based transaction “batching” protocol, said this morning that the platform had been exploited and asked all users to cease all approvals as caution.
The tool is built for end-users to optimize their DeFi strategy by using a simple ‘drag and drop’ mechanism. The tool allows users who don’t know how to code but understand DeFi markets to create and run their own strategies.
The protocol saw an exploit this morning. “We have deauthorized the relevant components and believe the vulnerability to be patched but we recommend users remove approvals out of an abundance of caution,” Furucombo said in a tweet.
We are working on the next steps and will update our community as soon as we can
Please remove your token approvals on https://t.co/jcZmbiUQOR towards our contract at the earliest.
Our smart contract:0x17e8Ca1b4798B97602895f63206afCd1Fc90Ca5f
— FURUCOMBO (@furucombo) February 27, 2021
As per The Block researcher Igor Igamberdiev, the attacker was able to conduct the exploit by tricking Furucombo’s smart contracts to trust and process a fake dataset belong to a decentralized lending service Aave—a protocol that allows users to take out loans via collateral (or flash loans with no collateral).
“An attacker using a fake contract made Furuсombo think that Aave v2 has a new implementation, said Igamberdiev in a tweet. He added that this reason caused all interactions with “Aave v2” to be “approved” and sent to an address controlled by the hacker.
On-chain data further shows that the attacker transferred the funds of every user who had ‘approved’ Furucombo to conduct transactions on their behalf, resulting in over $14 million getting stolen.
Over 3,900 stETH (a staked Ethereum token) and $2.4 million in stablecoin USDC were the biggest bags hit. The attacker/s have been transferring their illicitly-gained stash to privacy mixer Tornado Cash, a tool that masks addresses and allows users to swap cryptocurrencies on-chain.
Hsuan-Ting, the CEO of crypto exchange Dinngo, the firm that builds and maintains Furucombo, said the firm takes responsibility for getting attack and asked users to not “worry about any of their losses.
We are calculating how much is lost and planning what is the mitigation plan,” Hsuan-Ting said, adding:
“Will keep everyone posted. Together we are stronger.”
Meanwhile, Curve Finance’s Julien Bouteloup said on Twitter that such “evil contract” exploits were seemingly the new “holy grail.”
“evil contract” exploit is the new DeFi Holy Grail🔥
= a contract that fools the protocol into believing it is an existing "safe" contract
Furucombo got fooled with this new contract thinking it was aave v2 stuff. And top users with infinite allowance got rekt…
>$13.5M lost pic.twitter.com/s03egtRO7w
— Julien Bouteloup (@bneiluj) February 27, 2021
He was likely referring to previous attacks on Alpha Finance and Pickle Finance that saw a similar “evil contract” drain millions of dollars in cryptocurrencies by tricking the protocols into approving and accepting fake contracts. The projects mitigated further damage at the time and continue to live on.
Report: Driven by DeFi, North America’s crypto volume increased 1,000% year-over-year
Digital analytics firm Chainalysis reported that the growth in North America’s crypto market has been driven by the rise in popularity of decentralized finance.
In its 2021 Geography of Cryptocurrency Report, Chainalysis said the monthly crypto transaction volume across North America grew by more than 1,000% from July 2020 to June 2021. The monthly volume reached a peak of $164 billion in May 2021 before dipping to just over $100 billion in June.
According to Chainalysis’ report, decentralized finance, or DeFi, was largely responsible for North America continuing to maintain its position as one of the largest crypto markets worldwide. DeFi transactions represented 37% of North America’s overall transaction volume from July 2020 to June 2021, with residents sending roughly $276 billion in crypto to platforms in the DeFi space.
The Central, Northern and Western Europe region sent the most in crypto overall — $389 billion, roughly 40% of its overall transaction volume during the same time period. Chainalysis said “DeFi whales” were responsible for turning the region into the world’s biggest cryptocurrency economy, with the majority of institutional-sized transfers going towards platforms in decentralized finance.
However, the report said North America’s DeFi transactions were led by retail investors in the last year, with many transactions under $10,000. Uniswap was the most popular DeFi platform in North America, with users having sent more than $100 billion in transaction volume between July 2020 and June 2021.
“Right now, DeFi is targeted towards crypto insiders,” said dYdX growth lead David Gogel. “It’s people who have been in the industry for a while and have enough funds to experiment with new assets.”
In addition, Eastern Asia’s crypto market has been declining, likely driven by the regulatory crackdowns on China’s crypto industry and mining in the region. Chainalysis reported P2P trade volume in China had dropped significantly over the last year, ranking the country in the 155th position worldwide compared to 53rd the year prior. Though Eastern Asia still received $591 billion in crypto transactions between July 2020 and June 2021 — a growth of 452% year-over-year — the firm labeled the region as the “slowest-growing” in its analysis.
“Mining isn’t the only part of China’s cryptocurrency economy affected by the crackdown,” reported Chainalysis. “The government has taken other actions such as campaigning against cryptocurrency in state-sponsored media, placing official warning messages on cryptocurrency-related apps, and potentially leaning on social media companies to suppress cryptocurrency-related content.”
DeFi Presents Multi-Billion Dollar Use Case To Disrupt Foreign Exchange Market, According to Shark Tank Star Kevin O’Leary
Shark Tank star Kevin O’Leary is saying that the foreign exchange market is a multi-billion dollar use case for decentralized finance (DeFi), a form of blockchain technology that supporters claim can revolutionize financial services by eliminating the need for intermediaries.
During this year’s SALT conference in New York City, O’Leary relates how investors must rely on foreign exchange middlemen to invest in overseas markets. He says the extra steps required in such dealings are often unnecessary and burdensome.
“Let’s say a traditional mandate, such as I want to go long Europe, I’m going to buy 50 stocks. I have to buy Swiss francs, Euro-based stocks and British pounds because I want to trade them on their domestic exchanges.
In between me and that transaction is what’s called the bane of the earth – the FX trader, the currency trader who clips me every time I buy and sell. Adds zero value and sucks friction out of the system. I can’t wait until we solve this problem and give them a new career shining shoes, because they add no value whatsoever.”
The celebrity investor believes that DeFi has the potential to eliminate costly middlemen from the foreign exchange market system.
“This is where DeFi can take us, on just one use case. But it’s a multi-billion-dollar one, and I want to be alive to have a regulator domestically allow me a payment system to a Swiss franc, back and forth if I want to trade it 50 times a day, with zero FX traders. That’s my mission in life, to help them find a real job.”
In May 2020, O’Leary led a $20 million fundraising round for what is now WonderFi Technologies, a Canadian firm that plans to launch a platform to simplify access to DeFi.
Top DeFi Projects Outside Ethereum Ecosystem To Follow in 2021
The decentralized finance (DeFi) market has been instrumental to the crypto bull run of 2021. In fact, the DeFi market is currently projected to be an $800 billion industry by 2022. There has been an influx of DeFi projects into the market, and most of them rely on the Ethereum network. However, the issue of transaction fees and speed on the Ethereum network has not given these DeFi projects a foundation to fulfill their full market potential. For example, the average transaction fee on the network is between $15 to $50 and can be as high as $300 on busy days.
This situation led to some DeFi projects beginning to explore other blockchain protocols with less transaction fees and more transaction speed. Here, we will take a look at the emerging DeFi projects outside the Ethereum ecosystem.
The Emerging DeFi Projects Outside The Ethereum Blockchain
The first on our list of emerging DeFi projects outside Ethereum’s ecosystem is the Sovryn platform. Sovryn is a decentralized finance (DeFi) protocol that is built on the Bitcoin network. The project started in 2020 with only 5 developers and was officially launched in April 2021. Today, Sovryn has a core of over 60 contributors working on the project. It allows users to trade, loan out, and borrow in a permissionless manner without personal data requirements. Sovryn is currently the only truly decentralized financial protocol built on the Bitcoin Network. Users also keep the keys to their assets; therefore, they have control of the protocol.
Since its launch in April, Sovryn has facilitated an estimated $568 million in transactions, $77 million Total Value Locked (TVL), and $551 million Assets Under Management (AUM). Savryn also allows its users to participate in margin trading, swaps and adding liquidity.
A decentralized cohort of different stakeholders governs the Sovryn protocol (Bitocracy). There is no single entity that controls the direction of the protocol. The project also offers gas fees that are 0.01% of what is obtainable on Ethereum. The privacy of users is protected due to the fact that the protocol is completely permissionless. Also, the Sovryn protocol is Ethereum Virtual Machine (EVM), meaning that it can be used on any blockchain platform. Some of its notable features include Origins Launchpad, FastBTC Relay, Fait on-ramp, and leveraged trades.
Clover is a blockchain-based operating system with a decentralized finance protocol layer and other layers like storage, smart contract, and eApp. The system is built on the Polkadot blockchain network. The project supports various basic DeFi protocols like swaps, lending, borrowing, insurance, and so many more. According to the Clover Litepaper, the project builds a foundation layer for DeFi applications to operate seamlessly. The team also aims to facilitate a gasless transaction layer to give users a simplified and convenient experience.
The Clover team is currently working on joining as a parachain for Polkadot in order to achieve a high level of interoperability and become a renowned DeFi provider on the Polkadot blockchain. Clover is currently developing series of cross-chain implementations ranging from desktop to mobile, thus allowing users to interact with DeFi applications from multiple fronts ends seamlessly. Aside from bridging Ethereum and Polkadot in one unified space, Clover has developed an EVM-compatible infrastructure.
SORA is a decentralized multiverse economic system that decentralizes the concept of a central bank. It is trying to develop a parachain blockchain connecting to the Polkadot relay chain and ecosystem using in-built tools focused on DeFi. The SORA Network thrives at creating tools for decentralized applications that utilize digital assets like atomic token swaps, bridging tokens to other blockchains, and developing programmatic rules involving digital assets.
The SORA project is completely decentralized and depends on its community members to run nodes. The validator nodes are responsible for making blocks in the SORA network. The SORA DeFi ecosystem utilizes three different tokens. The SOR token is used for the payment of transaction (gas) fees within the network. There is also the VAL token used to reward validators on the SORA network. Finally, the PSWAP is used to reward liquidity providers on Polkaswap via the SORA network. It utilizes the Polkadot protocol and Parity Substrate to improve scalability better than Ethereum, and it doesn’t deploy an expensive mining process for consensus.
xWin is a decentralized fund management platform built on the Binance Smart Chain (BSC). With xWin Finance, anyone with their trading or fund management skills can open their own funds. The users can then subscribe to those funds and earn profits in return. xWin aims to create a one-stop DeFi protocol that enables every beginner to benefit from the greatest wealth transfer in recent human history.
xWin Finance also serves as Sector Index, where it provides a series of sector index funds in the Binance Smart Chain. The platform makes it easier for beginner investors in the DeFi ecosystem in terms of diversification of portfolios. So far, there are three sector indexes in mainnet and they include the xWin BSC DeFi index (xWin-DeFi), xWin Binance-Peg Infra Index (xWin-XFI), xWin Collectibles & NFT Index (xWin-NFT), and Japan Crypto Index (JPI).
To make the investment easier than ever before, the team is aiming to launch a series of BSC ecosystem indexes based on the current landscape. They chose Binance Smart Chain over Ethereum because it is faster and cheaper. The superior transaction speed of BSC and its lower transaction fees ensured it was chosen over Ethereum. xWin certainly deserves its place on this list of emerging DeFi projects out of the Ethereum blockchain network.
As DeFi innovators continue to seek solutions for the shortcomings of the Ethereum blockchain, more emerging projects built outside will be launched outside the Ethereum ecosystem. However, these emerging projects have to need to spend ample time in the market before they can really rival the leading Ethereum projects.