ValteSat, May 22, 2021 1:50 AM
Weekly Digest: BSC & DeFi Hacks, USDT On Avalanche With Coinfomania
Every week we make a digest about the most significant news in crypto with bloggers and crypto community members, but this week we decided to check out what our friends from the media find interesting in the world of crypto.
Projects And Updates
UK-based Red Bull Racing Honda started a multi-year technical partnership with Tezos to realise its first NFT collection. Red Bull is also seeking more efficient energy utilization as Tezos performs clean operations and uses as less carbon footprint as possible. Hubertus Thonhauser, Chair at Tezos expressed his excitement about the upcoming collaboration, telling that as Tezos was developed to grow and adapt in the most efficient way possible and as Red Bull Honda is following the same principles both sides of the partnership will win from it.
Stablecoin issuer Tether announced the launch of its USDT token on Avalanche blockchain which is designed for launching dApps and improving the world’s finance industry. This step will grant the traders a faster and more cost-effective way of transferring the stablecoin plus to make the advantages of Avalanche available for them. Though the exact date isn’t revealed yet, the launch is expected to happen before the end of this year. Tether is already live on 8 different blockchains, including Ethereum, Algorand, and Tron and together with Avalanche plans to join Polkadot and Kusama during the second half of 2021. If everything moves as planned USDT will be available on 11 blockchains.
MoneyGram has partnered with the US-based cryptocurrency exchange Coinme to enable for Americans the easy crypto-fiat conversion at retail points, so the customers, especially those who are going to use Bitcoin for the first time will have access to thousands of new sale points. The option is to become available in the coming weeks at selected locations. MoneyGram also has a plan to expand this possibility to other countries as well. According to Alex Holmes, MoneyGram’s Chairman and CEO the company is happy to be a pioneer in creating a crypto-to-cash model and they see it as a way for new growth for the network through monetizing it to new-use cases.
While many of the altcoins suffered massive sinking, ADA increased its price by over 50% in just one week, reached its new all-time high of $2.43, and displaced Ripple from the 4th place in the top of largest coins. Cardano token’s market cap exceeded $77 billion, thus overtaking XPR by more than $5 billion. The prognosis for ADA is ambiguous as it can grow up to $3, but also drop to $2. A similar story happened with MATIC as it became the token to watch by gaining over 100% of its price and reaching ATH of $1.86. As for the meme coins they didn’t experience the most successful week – DOGE dropped by 1% and SHIB lost about 50% of its price just in 5 days after reaching its all-time high.
Following quite turbulent times for the crypto market Ether became one of the worst-hit coins by losing more than 12% in just one day. In fact, its price experienced strong fluctuations from rising to $3’012 to falling as low as $2’050. The bottom point caused the decrease of the Ether market cap to $240 billion. But, by the press time, it had already recovered and settled at the level of $310 billion, coming close to half of the Bitcoin market cap. Though there are talks going around the community that Ethereum might flip the crypto king and become the first coin that is not going to happen too soon as Bitcoin rolls faster than Ether. But analysts believe it can very likely reach the half size of the Bitcoin market by the end of the year as trade concentration on the first-born crypto decreased. It’s also expected for Ether to reach ATH of above $6500 by the end of the year.
Coinbase presented a new Coinbase Wallet extension enabling users to access various DeFi apps and NFT marketplaces through the web browser by just linking the extension to the existing account. Previously the users of Coinbase Wallet had to scan the QR-code every time they wanted to access dApps like Uniswap and Compound, etc, which was a quite tedious process. With the new extension that is now available on Google Chrome users get access to thousands of cryptocurrencies and to the trading on several DEXs as well as to the opportunity to collect NFTs. Despite the security and convenience of the new extension, the company still recommends running transactions using their mobile app to increase the security level.
The Indian government is planning to set up a new committee that will explore the possibilities of regulating cryptocurrencies in the country. The new body wasn’t created yet and still under deliberation, but according to the sources related to the matter, it can be exploring the ways of using crypto to intensify the country's technology industry. If created, the committee will also decide whether cryptos should be regulated as assets or currencies. Additionally, it also might explore the possibilities of implementing a digital rupee. As for the previous suggestion to ban all cryptos, it’s now called out of date. If the new proposal of the crypto regulations comes through, India will join the list of crypto-friendly countries.
“I’m really delighted to learn that India may finally be choosing the right approach towards cryptocurrencies. Regulation is a better move for nations, and India has the talents and population to play a significant role in the emerging crypto space.”
On May 18, China’s authorities issued a statement prohibiting any financial service provider in the country to perform any crypto-related transactions, including, trading, registration, cleaning, and settlement. Moreover, crypto businesses aren’t allowed to issue any crypto-related financial products, including organizing ICOs. The statement was signed by three major Chinese industry bodies - the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China. According to the text of the statement, that was made to prevent speculative trading and to protect people’s property. Although the document doesn’t obstruct from holding cryptos, the government has warned the citizens that cryptocurrencies aren’t supported by the real value and their prices can be easily manipulated.
“We’ve heard this news from China countless times, and the latest FUD isn’t really different. It normally comes when prices are near their peak, and appears to be a coordinated effort by whales to tank the markets so they can buy more at cheap prices.”
Pancake Bunny, a DeFi yield optimizer project made on Binance Smart Chain was exploited when a single user drained BUNNY tokens of roughly $1 billion that were later exchanged to BNB, Binance-pegged USDT, and other tokens via Pancakeswap. According to the Pancake Bunny team report, the hacker borrowed a big amount of BNB which he used to manipulate USDT/BNB and BUNNY/BNB which allowed him to receive a huge amount of BUNNY.
Pancake Bunny is a DeFi startup that managed to raise $1,6 million of investment in April, helped BSC users to maximize their yields, so users locked their tokens in Bunny's Smart contract to earn the rewards. The project had over $10 billion in total value locked at its peak and was working on a new approach to control token emission when the exploit changed the plans. In the aftermath, the attack caused a more than 97% token price drop.
“The incident with Pancake Bunny was the second high profile attack on a BSC-based project, with Venus also suffering a similar misfortune last week. While these attacks are not entirely new, it is gradually dampening user interest in BSC projects and needs to be resolved before it gets out of hand.”
CiperTrace Blockchain analysis start-up published a cryptocurrency crime report showing that DeFi related hacks and frauds made up 54% of the total value lost in crypto crimes. From about $432 million loose only in the first four months of 2021, $240 million of the exploits are related to DeFi. In percentage — 60% of attacks in 2021 were made on the DeFi projects, and 47,4% of the rug pulls taking up about $83.4 million also comes from there. Unfortunately with the explosive growth of DeFi projects, a 200% increase of the fraud volume compared with 2020 is also noted.
"The recurring hack incidents with DeFi protocols only reinforces arguments that DeFi is far from reaching the level of security required for mainstream adoption. I do hope we reach that level someday."
FinNexus DeFi project has been exploited with the hackers minting 383 million of its native FNX tokens with a total value of $7.6 million at the time of the attack. The malefactors got the network’s private key access that allowed them to change the address of the contract owner and to mint 323 and then 60 more million tokens on Ethereum and Binance Smart Chain networks. The tokens later were dumped in the market and caused a bad dip of the price that fell over 97%. The FinNexus team posted the announcement on Twitter asking the investors to withdraw their funds from the liquidity pools.
Tesla and SpaceX CEO Elon Musk last week disclosed on his Twitter that Tesla will not accept Bitcoin for its products anymore. He attached a document containing a message explaining that the decision comes after the realization of the increased use of fossil fuels in Bitcoin mining and transactions and that the company is ready to return to the currency as soon as it transits to more sustainable energy. Despite that, Tesla is not going to sell the Bitcoins it holds (around $2,5 billion at the end of the first quarter) . Later that same week Musk asked his followers if Tesla should start accepting DOGE, which he had been promoting for a long time, for its cars. It is worth mentioning though, that Dogecoin uses the same energy-intensive proof-of-work concept.
"I honestly do not believe that Musk and the due diligence team at Tesla did not research Bitcoin’s energy usage before deciding to invest $1.5 billion in Bitcoin. I kinda agree with Anthony Pompliano of Morgan Creek about Tesla’s possible launch of a renewable energy product for mining Bitcoin. Musk is probably laying a strong foundation for whenever they’re ready to enter the bitcoin mining market, and we only have to wait and see how this unfolds."
Despite the massive Bitcoin bear run caused by Elon Musk's recent announcements, Fundstrat Global Advisors’ Managing Partner and Head of Research, Tom Lee is convinced that Bitcoin will rise above this price drop up to $125 000 by the end of 2021. In his opinion Tesla’s decision to stop accepting Bitcoins for its products could have been influenced by the investors. Though Lee doesn’t think that this decision will have much effect on Bitcoin’s bulls and the currency’s overall performance, he concerns that Musk’s message will make people focus on the problems caused by the digital assets and he calls this a call to action for Bitcoin industry to focus on more efficient ways to provide proof-of-work. Tom Lee also pointed out that Bitcoin’s benefits are much bigger than the risks and that it will regain and increase its dominance during the bear market.
"I totally agree with Tom regarding Bitcoin's long-term performance and the fact that it would recover its dominance following the recent sell-off. The next leg up, which probably isn't too far away, will likely put Bitcoin in content for a six-figure price."