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DeFi Trails Broader Market Uptrend to Hit New TVL at $223 Billion

The Total Value Locked (TVL) in decentralized finance (DeFi) protocols have crossed the biggest range in history. It is trading at its highest value of $223 billion, according to data from DeFiLlama.

The current uptick in DeFi’s TVL is marked as an encompassing growth in the broader digital currency industry, whose market cap now sits at $2.42 trillion at the time of writing.

By ranking, Curve Finance comes off as the most prominent protocol in the space and currently holds a total of $17.14 billion in Total Value Locked. As an interoperable decentralized exchange liquidity pool on Ethereum, the protocol’s uptrend growth is similar to the broader ecosystem, with the largest bit of assets locked on the Ethereum protocol.

Lending protocol Aave also sits comfortably in the second position with a $16.69 billion TVL, with the top five largest protocols made up by MakerDAO, Wrapped Bitcoin, and InstaDapp. Despite the biggest contributors of Ethereum blockchain native protocols, other public blockchain networks, including the Binance Smart Chain (BSC), Avalanche, and Fantom, also have protocols that contribute their bit to the overall growth.

DeFi has grown to offer new assistance to a wide range of investors as mainstream investment offerings do not look promising. The advent of the coronavirus pandemic placed a massive burden on the global economy. Based on this situation, central banks around the world set extremely low-interest rates to ease off the pressures. Investment securities, including government and corporate bonds, interests in savings, and others, directly impacted the broad economic fallout.

The shakedown of the global economy presented an opportunity for decentralized finance to showcase itself, offering higher interest rates and correspondingly lowering the barriers to entry per crypto-backed loans.

The growth of DeFi has seen the TVL climb from $13.7 billion back in November 2020 to the $223 billion it currently is today, a price point that showcases the blockchain offshoot is just getting started.

DeFi Growth Outlook for 2021: From $18.71B to $258.58B

New milestones were achieved across the digital currency ecosystem in 2021, a growth that was translated into Decentralized Finance (DeFi) sub-niche.

According to data from DeFiLlama, the DeFi ecosystem, encompassing the top blockchain networks saw a massive growth surge from $18.71 billion in Total Value Locked (TVL) as of January 1 this year to $258.58 billion it is pegged at as of today.

This growth pace which represented a 1,282% upshot within the space of 12 months showcases the increasing advances in the DeFi world. New projects emerged in the digital currency ecosystem that heralded the emergence of several innovative DApps and smart contracts.

The DeFiLlama data showcases the split in various protocols that make up the DeFi ecosystem. Curve Finance takes the largest cut in the pie with over $23.4 billion in TVL across multiple networks. Ethereum centred Convex Finance and MakerDAO occupy the second and third positions with $19.36 billion and $19.18 billion respectively.

Over the course of the past year, three major protocols, Solana, Avalanche, and Terra have all surmounted expectations with the pace at which new smart contracts are proliferated on their platforms. The protocols themselves have also impressed investors with their offerings, further boosting the overall adoption across the board.

Apart from Ethereum-focused protocols, Anchor Finance, a Terra native money market service provider occupies the 10th position as the largest contributor to the broader DeFi TVL with $8.98 billion in TVL.

The digital currency ecosystem has seen a fair number of trends come and go since its inception, and despite its newness, the sub-niche is still showing great potential for future growth. The broader cryptocurrency industry has recorded a massive correction this year, and this has in no way impacted the growth rate of the DeFi ecosystem. This amongst other pointers with backing data showcases the DeFi world is on track to record even greater growth in the near future.

DeFi TVL Drops below $200Bn, Reflecting General Bearish Market Slump

The Total Value Locked (TVL) in Decentralized Finance (DeFi) platforms has slumped below $200 billion, down from the $230 billion towards the end of April.

While the hit of the DeFi ecosystem has been facing models a related trend in the broader digital currency ecosystem, the DeFi slump notably lends more insight as a gauge into investors’ readiness to embrace crypto investment and passive income generation when compared to the traditional financial ecosystem.

The DeFi TVL, according to DeFiLlama, was pegged at $199.31 billion, up 0.3% in the past 24 hours at the time of writing. In May, it arguably opened up in a bearish style as investors generally evaluate the growing options of protocols that can favour them in the long term.

Curve Finance, the biggest DeFi platform with an $18.84 billion TVL, slumped by 10.45% over the past month, with lending platform Aave taking one of the biggest hits with more than 20% slump in the same time frame. Amongst the elite DeFi platforms around, Terra-based Anchor Protocol came off as the most resilient DeFi platform, which grew its TVL by 4.96% in the past month, per data from DeFiLlama.

Investing funds in the majority of DeFi protocols often makes such capitals dormant, thus, shutting out investors from taking advantage of opportunities that may arise the unannounced. There are extra offshoots of the blockchain ecosystem that notably take up investors’ interest across the board, and Non-Fungible Tokens (NFT) account for one of the most prominent.

With investors hustling to gain access to prestigious NFT collections like the Otherdeed to the Otherside launched by Yuga Labs, the startup behind the Bored Ape Yacht Club (BAYC) collection, over the weekend, the tendency for investors to pull funds from other DeFi platforms is high.

Crypto Market Onslaught Stretches to DeFi as TVL Slumps to $114bn

With a broad-based caution being exercised by investors regarding risk assets, there have been a massive outflow of funds from Decentralized Finance (DeFi) protocols as many investors anticipate calm to re-engulf the ecosystem.

The DeFi world is not spared from the current onslaught in the cryptocurrency space, which has fueled the combined market cap by dropping to $1.25 trillion after an 8.86% drop over the past 24 hours at the time of writing.

Where DeFi Currently Stands

Per data from DeFiLlama, the ecosystem’s Total Value Locked (TVL) has dropped to $113.15 billion atop a 26.16% slump over the past 24 hours. The events ongoing in the Terra ecosystem have largely affected investors’ confidence in relation to the network’s most celebrated project, Anchor Protocol.

In reality, the dominance of Curve has been subsumed by MakerDAO (MKR) whose TVL now stands at $10.03 billion, down 23.52% over the past week. Curve Finance ranks as the next big DeFi protocol at a $9.52 billion TVL as a prominent lending protocol. Aave is still maintaining its third position atop a TVL of $8.32 billion.

Anchor Protocol dropped from $17.05 billion as of May 5 to $1.21 billion at the time of writing. While the DeFi ecosystem measures how far the crypto world is serving the most ambitious revolt against traditional finance, investors backing the revolution often see inconsistencies owing to the inherent volatility.

The plunge of the DeFi protocols is not the first that will be recorded, and it is evidence of the interwoven volatility and correlation amongst protocols. With the $200 billion benchmarks the height to target, time will tell whether the resilience that DeFi proponents are professing will help in regaining the TVL in the long run.

3AC Withdraws $45m from Curve and Convex amid Bankruptcy

Three Arrows Capital (3AC) might have declared bankruptcy, but the firm is still conducting a number of robust transactions, according to insights derived from on-chain data.

The company, which was also declared as a liquidated entity by a court in the British Virgin Islands, has unstaked a total of 20,945 staked ether (stETH), worth $33.3 million, from Curve Finance.

The transaction was discovered in part because the crypto analytics platform, Nansen, had already marked the wallet address used for the transaction as belonging to 3AC. Su Zhu ran the firm and also withdrew some funds, including 2,421 wrapped ether (3.98 million), 202.7 wrapped bitcoin ($4 million) and 4,051,367 USDT stablecoins from the Convex Finance protocol as well.

The wallet address attached to Three Arrows Capital that was used to initiate the transaction with Curve is also what is being used to keep hold of the unstaked $45 million. According to the balances in the Wallet at the time of writing, a total of $57.86 million.

Prior to its liquidation and subsequent bankruptcy, 3AC was a highly capitalized firm, serving as both a hedge fund as well as an active investment outfit in the broader Web3.0 ecosystem. The trading platform is known to be the prominent backer of key projects like Fireblocks and Terraform Labs.

The bet on Terraform Labs fueled its downfall, and the cataclysmic impact accounts for what has dragged many other crypto firms like Voyager Digital into the bankruptcy circle.

According to liquidation proceedings, it was discovered that the embattled crypto hedge fund owed as much as $3.5 billion to creditors, one of whom was Blockchain.com.

While Teneo Restructuring is in charge of the liquidation proceedings, some investors, particularly those with small stakes in the firm, can be adjudged as not having a visible edge in reclaiming their funds.

It is not immediately clear what the unstaked funds are meant for, as no comment or reference has been gleaned from 3AC or its representatives.

Curve Finance CEO Michael Egorov and Spouse Acquire Two Melbourne Mansions, Amassing an Impressive 5663 Square Metre Estate

In an unprecedented move showcasing a hefty investment in Australia’s property market, Curve Finance(CRV) CEO Michael Egorov and his wife Anna have made a grand purchase in the heart of Melbourne, according to Financial Review. They’ve managed to acquire not one, but two stately mansions, amalgamating an impressive landholding of 5663 square metres.

The significant size of their newly consolidated property underscores the Egorov’s bullish stance on Melbourne’s luxury housing market. The financial details of the acquisitions have not been made public, but given the premium location and the large combined land size, the transaction is likely to be one of the highest this year in Melbourne’s high-end property sector.

As one of the leading figures in the decentralized finance industry, Egorov’s recent real estate acquisitions have gained significant attention. Curve Finance, the firm that Egorov heads, is a prominent player in the cryptocurrency sector. It is known for its decentralized exchange for stablecoin trading, which has grown in popularity among crypto traders worldwide.

This move may fuel speculation about whether the Egorov’s see the Australian property market as a safe investment haven amid the volatility of the cryptocurrency world. Alternatively, their purchase could signal a potential interest in exploring more real estate-based blockchain initiatives.

Melbourne’s property market has been a hotspot for high-profile buyers in recent years, particularly from international investors. The city is renowned for its quality of life, making it an attractive destination for affluent individuals and families worldwide. The Egorov’s recent acquisitions add to a list of illustrious investors in Melbourne’s thriving real estate scene. Further details about the purchased properties, including their exact location, architectural features, and the couple’s plans for their new landholding, remain undisclosed.

Curve Finance and the Vyper Vulnerability: A Technical Post-Mortem Report

On July 30, 2023, multiple Curve.Fi liquidity pools were exploited due to a latent vulnerability in the Vyper compiler, specifically in versions 0.2.15, 0.2.16, and 0.3.0, resulting in approximately $70 million in losses. This caused panic within the DeFi community.

The hacks led to a 5% decline in CRV, Curve’s native token, and triggered fears of contagion effects for some DeFi protocols. The lending protocol AAVE appeared to be at risk due to a massive borrow position secured by CRV token collateral.

This report provides a deep-dive into the Vyper compiler’s vulnerability, its root cause, and the lessons learned from the incident.

What is Vyper?

Vyper is a contract-oriented, domain-specific, pythonic programming language targeting the Ethereum Virtual Machine (EVM). Its main goals include simplicity, pythonicity, security, and auditability.

Re-Entrancy: A Widespread Web 3.0 Problem

Re-entrancy is a common problem in blockchain programs. It occurs when the control flow of a contract is relinquished to another invoked program, allowing the invoked contract to re-enter the original caller while it is frozen.

Solutions

The ecosystem has developed two ways to combat re-entrancy attacks: the Checks-Effects-Interactions (CEI) pattern and re-entrancy guards. Vyper introduced a re-entrancy guard at the language level via the special `@nonreentrant` function decorator.

Vyper Vulnerability Historical Timeline

The @nonreentrant` decorators were introduced in the v0.1.0-beta.9 release of Vyper, offering flexibility by allowing a key to be set.

Beginning in 2018, the Vyper compiler started a multi-year effort to refactor its architecture. This culminated in 2023 with PR#3390.

PR#2308 and PR#2379 were part of efforts to make storage allocation smarter and avoid corruption. However, these updates introduced bugs, leading to the “yanking” of v0.2.13 and v0.2.14 releases.

Issue #2393 revealed that re-entrancy guard tests were failing in v0.2.14, leading to an overlap in storage.

The v0.2.15 release attempted to fix the corruption but introduced a vulnerability where all `@nonreentrant` decorators within a Vyper contract would utilize a unique storage offset regardless of their key.

The vulnerability went undetected for a 4-month period between July 21, 2021, and November 30, 2021.

The v0.3.1 release resolved the vulnerability through two different PRs, PR#2439 and PR#2514.

Vulnerability Summary

Versions Affected: v0.2.15, v0.2.16, v0.3.0

Root Cause: Improper remediations to re-entrancy guard data corruption issues introduced in v0.2.13

Vulnerability in Brief:** Cross-function re-entrancy is possible on all contracts compiled with the susceptible versions.

The Vyper team has outlined several practical steps to improve the correctness of smart contracts compiled with Vyper, including improved testing, providing developers with better tools, tighter feedback with protocols, and focusing on securing past releases.

New security-related initiatives within and beyond the Vyper team include:

1. A short-term, competitive audit in partnership with Codehawks

2. Bug bounty programs in partnership with Immunefi

3. The Vyper Security Alliance

4. Collaboration with multiple audit firms

5. Expansion of the team, including a dedicated security engineering role

6. Collaboration with existing security toolkits

7. Design of a language specification

The Vyper team’s commitment to learning from this incident and implementing these initiatives reflects their dedication to making Vyper a rock-solid and secure smart contract language and compiler project.

Curve Finance Announces Refund Plan Following $62 Million Hack

Decentralized finance (DeFi) platform Curve Finance has announced its plan to refund users affected by the recent attack that resulted in a loss of $62 million. The incident, which occurred on July 30, 2023, involved a malicious hacker exploiting security vulnerabilities in Curve Finance’s Vyper compiler, specifically targeting versions 0.2.15 to 0.3.0.

Exploiting a Security Vulnerability

The attacker’s skillful manipulation of these vulnerabilities led to the targeting of pools including CRV/ETH, alETH/ETH, msETH/ETH, and pETH/ETH, as well as three pools on the Layer-2 scaling network Arbitrum. Experts in the field have emphasized that detecting these security vulnerabilities required a significant amount of skill and resources. One contributor to Viper even stated that the attack was likely planned weeks before execution.

Recovery and Refund

According to official posts from Curve Finance’s account, ongoing investigations have made progress, and approximately 79% of the funds have been successfully recovered as of August 11, 2023. The platform also announced that it will evaluate each affected user for refunds to ensure the fair distribution of resources.

In a surprising turn of events, 10% of the stolen assets were offered as a reward to the responsible person behind the attack, and upon accepting this offer, the hacker started refunding the funds. According to on-chain data from Etherscan, the total value of the refunded funds reached 4,821 Ethereum, equivalent to approximately $8,891,578.

Impact on Curve Finance

The attack has had a profound impact on Curve Finance. Data from DefiLlama revealed that the total value of assets locked (TVL) on Curve Finance has dropped to its lowest level in two years, standing at $2.83 billion at the time of writing. This represents a 24% drop since the exploit on July 30.

Furthermore, trading volume on Curve totaled $100 million as of August 10, down from $143 million prior to the hack. Activity on one of Curve’s leading pools, ETH/stETH LP, has dwindled since the hack, with trading volume reduced around 70% in the last two weeks.

Curve Founder Michael Egorov Withdraws Near 12 Million CRV Tokens

Michael Egorov, the founder of decentralized finance (DeFi) platform Curve Finance, withdrew nearly 12 million CRV tokens (11.85 million to be precise), equivalent to $5.08 million, from the platform’s vesting contracts. The disclosure was made by Scopescan on its official Twitter account at 3:05 PM. The detailed data regarding this withdrawal can be accessed via Scopescan’s entity dashboard.

Following the specified vesting schedule for CRV token holders, Egorov is now eligible to claim 548,600 CRV, which is valued at $235,000, on a daily basis. This amount aggregates to approximately 16.7 million CRV or $7.16 million monthly. The substantial withdrawal of CRV tokens by Egorov showcases the significant earning potentials embedded within the DeFi sector, particularly for founders and early investors of successful projects like Curve Finance.

The disclosure of this hefty withdrawal triggered a variety of responses within the cryptocurrency community. Many were astonished at the ease with which significant sums can be earned and withdrawn from DeFi platforms. A Twitter user, known as Daniel (@wasitzen), voiced the sentiment of many by commenting, “Jesus Christ, making money is just so effortless for some people,” two hours following the disclosure by Scopescan.

Before Michael Egorov substantial withdrawal of nearly 12 million CRV tokens, Curve Finance founder Michael Egorov has already showcased his financial acumen with a significant investment in Melbourne’s luxury housing market. On May 28, 2023, as reported by Blockchain.News, Egorov and his spouse acquired two prestigious mansions in the heart of Melbourne, amassing a sizable estate of 5663 square metres. While the exact financial details remain undisclosed, this acquisition reflects Egorov’s bullish stance on the Melbourne property market amid the cryptocurrency world’s volatility, possibly indicating an interest in exploring real estate-based blockchain initiatives or viewing the real estate as a stable investment avenue amid the crypto market’s fluctuations.

The withdrawal by Egorov warrants an examination of its potential implications on the Curve Finance platform and the broader DeFi ecosystem. While vesting schedules for founders and key stakeholders are common in the crypto space to incentivize long-term holding and project involvement, large withdrawals like this could potentially influence the market stability and the price of the CRV token. However, the market impact of this particular withdrawal remains unclear and may need further monitoring to understand its broader implications fully.

Curve Finance, known for its decentralized exchange liquidity pool on Ethereum, is a cornerstone in the DeFi landscape, facilitating low-cost, low-slippage trades between various stablecoins. The withdrawal event underscores the financial incentives inherent in DeFi platforms, which provide substantial returns for key stakeholders and early investors.

Curve Founder Proposes Venus Protocol Deployment on Ethereum Mainnet

Curve Finance founder Michael Egorov has put forth a proposal to deploy the Venus Protocol on the Ethereum Mainnet, signaling a strategic expansion in the decentralized finance (DeFi) sector. This proposition, aimed at tapping into Ethereum’s substantial liquidity, also includes the integration of Curve’s native tokens crvUSD and CRV as collateral options, paired with a mutually beneficial rewards system.

Ethereum, recognized for its significant liquidity and the volume of on-chain transactions, presents a ripe environment for DeFi protocols. Curve, holding a pivotal position with a Total Value Locked (TVL) of $1.8 billion and a widely used stablecoin (crvUSD) with a supply of $130 million, is set to extend its influence by supporting pools with Venus assets on the Ethereum Mainnet.

The proposed deployment is poised to deliver several advantages: Enhanced visibility and brand recognition for Venus on a premier blockchain network. Additional adoption and utility for Curve’s crvUSD as a stablecoin within lending protocols. The establishment of liquidity pools that further integrate the offerings of both Venus and Curve.

Egorov details the potential for creating core and isolated pools on Venus, presenting specific supply and borrow caps to align with risk-managed approaches. A notable feature is the proposed liquidity mining incentive, which could see an injection of 500,000 CRV tokens to stimulate supply-side participation, with the aspiration of achieving a 10% Annual Percentage Rate (APR) over a span of 120 days.

The response within the community forum has been overwhelmingly positive, with leaders and members expressing strong support for the deployment. The enthusiasm underscores the community’s eagerness for cross-chain collaboration, acknowledging Ethereum’s high gas fees but valuing its considerable volume of transactions.

A gauge system within Curve’s DAO is highlighted as a mechanism to distribute rewards, emphasizing decentralized decision-making. Successful implementation hinges on community votes, with historical precedence showing favorable outcomes for such gauges.