The decentralized finance (DeFi) sector continues to attract increased attention from cryptocurrency investors. ForkLog has compiled the most important events and news from the past few weeks into a summary.
Key DeFi Segment Indicators
The volume of blocked funds (TVL) in DeFi protocols has increased to $232 billion. The Curve Finance protocol still holds the lead with $21.42 billion. Lido ($20.15 billion) took second place in the rankings and MakerDAO ($15.92 billion) fell to third place.
Data: DeFi Lama.
TVL in Ethereum applications has reached $126 billion. Over the past 30 days, the indicator has increased by 11% (the value was $113.58 billion on March 2).
Data: DeFi Lama.
Trading volume on decentralized exchanges (DEX) in the past 30 days was $63.7 billion
Uniswap continues to dominate the noncustodial exchange market, accounting for 77.8% of total revenue. The second DEX in terms of trading volume is Curve (6.3%), the third is Sushiswap (6%).
The price of the Aave token exploded after the launch of the third version of the protocol
On March 17, DeFi landing platform Aave announced the launch of the third version of the protocol. Since then, the price of the project token has increased by more than 70%.
AAVE/USDT 4-hour chart of the Binance exchange. Data: trading view.
The market capitalization of the asset has exceeded $3 billion, according to CoinGecko.
The developers say that Aave V3 has a higher level of security, as well as better capital efficiency for users.
The new platform is integrated with six networks: Polygon, Fantom, Avalanche, Arbitrum, Optimism and Harmony. Ethereum mainnet support is coming soon.
Many well-known DeFi projects are already interacting with Aave V3, including ParaSwap, 1inch, Instadapp, DeBank, DeFi Saver, Zapper, and Zerion.
In the new version, cross-channel compatibility has been improved. Gas consumption has also been optimized, making transactions “as cheap as possible”.
Implemented “Isolation Mode”: By interacting with potentially high-risk tokens, users can borrow limited amounts of funds. According to the developers, this approach allows you to add many new assets to the platform.
Morgan Stanley highlighted obstacles to continued explosive growth in DeFi
Oversizing and regulation will limit the continued exponential growth of the DeFi sector in the years to come. Morgan Staley analysts have come to such conclusions.
Investment banking experts noted that they did not find much evidence for the thesis that DeFi protocols significantly improve the traditional financial system.
“The projects appear as a means of attracting cash flows for the enrichment of their operators. DeFi is vulnerable to hacking and the risk of financial crime due to its anonymity,” they wrote.
Lack of KYC/AML will limit adoption among institutionalists, and integrating these requirements will make DeFi more centralized, experts explained.
The European Parliament supported the mandatory verification of DeFi wallet users
The European Parliament has supported amendments to the regulation on the exchange of information between counterparties, which involve the collection of data on users of non-custodial cryptocurrency wallets.
The changes will require cryptocurrency exchanges and other platforms to verify users of non-custodial wallets when transacting with them. At the same time, the de minimis principle does not apply to such transfers, so we are talking about the collection of information in connection with any transaction, regardless of its volume.
Investing in DeFi
The ParaFi Foundation led an investment round of the Bastion landing protocol powered by Aurora, the NEAR network’s second-layer blockchain platform. The total amount of charges in Bastion has not been named.
Jane Street, Digital Currency Group, Crypto.com, CMS and Manifold Trading have also invested in the project. Angel investors included Ilya Polosukhin, co-founder of NEAR, and Jeffrey Kuan, director of business development at Terraform Labs.
The project has seen “explosive growth,” according to the Bastion blog. In the first 24 hours after the mainnet launched on March 7, funds in the amount of $200 million were locked in the protocol.
Parachain Project Acalaoperating in the Polkadot ecosystem, announced the launch of the $250 million aUSD ecosystem fund to boost usage of the Acala USD (aUSD) stablecoin.
Various industry companies are participating in the initiative, including Alameda Research, Arrington Capital, Digital Currency Group, IOSG, Jump Crypto, Kraken Ventures, and Pantera Capital.
The Acala Foundation will provide grants to early-stage Polkadot ecosystem projects that work in areas such as decentralized finance, derivatives, payments and DAO, and use the aUSD token.
Hacks and scams
DeFi Protocol Deus Finance CAD was attacked. The hacker’s profit was around $3 million, including 200,000 DAI and 1101.8 ETH.
The Deus Finance team confirmed the hack, but said the funds were safe and promised to reveal details of the incident at a later date.
According to PeckShield experts, the malefactor used instant loans to attack. The hack was made possible by manipulating the oracle that determines the price of the USDC/DEI pair, they discovered.
After the attack, the hacker sent funds in ETH to the Tornado Cash mixing service.
The attackers hacked Agave and Cent Finance DeFi protocols using re-entry exploit and instant online loans to attack Gnosis Chain.
In total, the hackers withdrew around $11 million in wETH, wBTC, LINK, USDC, wXDAI, and GNO tokens.
DEX Aggregator LiFinancereported a hacker attack in which 205 ETH (~$591,630) was stolen from 29 wallets connected to the service. The project team closed the exploit and refunded most users’ losses.
Li Finance said it reimbursed the losses of 25 wallets for a total of $80,000. The remaining four wallets represent approximately $517,000 in stolen funds. The team contacted the owners of the addresses and offered to convert the lost funds into Li Finance angel investments and future Li.Fi tokens.
Decentralized Oracle Service Umbrella Networkalso reported a hack. The attacker used an exploit while staking contracts for Ethereum and BNB pool liquidity providers.
Following the attack, the hacker withdrew tokens from these pools. The project team said the striker sold over 2.2 million UMB on the open market. PeckShield experts estimated the damage at $700,000.
Umbrella Network has guaranteed that it will pay compensation to all affected users. The team also pointed out that other protocol smart contracts were not affected.
The stablecoin multi-chain yield optimization protocol OneRing financing Has been hacked. The hacker took out $1.45 million using an instant loan, the project lost about $2 million.
To execute the exploit, the attacker placed a special smart contract on the Fantom platform. Because the script was set to self-destruct, it’s nearly impossible to determine which vulnerabilities were exploited, the project team noted. To get at least some information, she works with node providers.
After deploying the smart contract, the attacker borrowed 80 million USDC through an instant loan, which he used to manipulate the price of the OShare token in the liquidity pool.
After repaying the loan, his profit was $1,454,672. Another $500,000 was lost due to swap fees and loan repayments. In total, the protocol lost nearly $2 million.
The hacker transferred the stolen funds from Fantom to Ethereum and immediately sent Tornado Cash to the mixer. Through the same service, he replenished the newly created wallet he used for the attack.
OneRing assured that they were working on a recovery plan.
The protocol team offered the hacker 15% of the stolen funds plus 1 million native RING tokens for a refund, although they called such a development “unlikely”.
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