Welcome to the latest edition of our Market Roundup, where we cover the highlights of the past week in the rapidly evolving world of blockchain and decentralized technologies.
Overall, it was a week of cryptocurrencies going into the red. The tokens with the highest market capitalization mostly dipped slightly, although a few dived, including XRP (–7.08%), DOGE (–4.71%), and SOL (–10.26%).
(as of 1:30 AM UTC, August 4, 2023)
The halving of Litecoin (LTC) took place on Wednesday, August 2. This shrank the rewards for mining LTC by half, taking it down to 6.25 LTC per block, meaning the rate at which new LTC tokens are minted will be slower. The objective is to also create conditions such that the value of LTC rises. But this didn’t happen after the halving. In fact, the price of LTC has moved down, bucking the intended bullish action. LTC had previously climbed to US$110 in July, but has been sliding since then.
Meanwhile, BTC crept lower than US$29,000, hitting a six-week low. It see-sawed between US$28,785 and US$29,955, wrapping up the week slightly above the US$29,000 mark.
Although the crypto market slumped for the week, conventional institutions continue to demonstrate interest in this space. This time, financial service providers Direxion and ProShares filed to launch exchange-traded funds that would hold futures contracts involving BTC and ETH.
The growing roster of crypto ETF applicants is a clear signal that mainstream investors are expressing demand for exposure to crypto assets. And when these applications begin to receive approval, a range of financial instruments involving different on-chain assets may emerge to fit investors with different objectives.
For more insights about market movements, be sure to check out the routine updates on BTSE’s blog.
- In the aftermath of a recent exploit, an ethical hacker successfully retrieved US$5.4 million in ETH and returned it to Curve Finance, a DeFi protocol. Curve has US$3 billion in liquidity and is the second-largest DEX. The exploit, caused by malfunctioning reentrancy locks in the Vyper programming language, resulted in losses estimated at US$70 million and exposed vulnerabilities in other DeFi protocols. While the white hat hacker, known as “c0ffeebabe.eth,” managed to recover some of the stolen assets, Twitter accounts impersonating Curve Finance have begun promoting a fake refund scheme, targeting victims of the hack. Additionally, the US Securities and Exchange Commission has implemented new rules for public companies, requiring them to disclose cyberattacks promptly. Other DeFi protocols, like BNB Smart Chain, have also experienced copycat attacks due to the Vyper vulnerability, with approximately US$73,000 stolen across three exploits.
- Shibarium, the SHIB-based layer-2 network on Ethereum, has taken a step closer to launch with the introduction of a testnet bridge allowing token transfers between the two networks. Currently, only dummy assets are supported in the public testing phase. This development has led to significant gains for dog-themed tokens, including Shiba Inu (SHIB) and ShibaSwap (BONE). While bridges have been targeted by cybercriminals in the past, this cross-chain solution could enhance the utility of the Shiba Inu ecosystem and shift its image away from being solely a memecoin. Despite the recent surge, affiliated tokens like BONE and SHIB still remain well below their all-time highs from 2021.
- Nomura’s crypto subsidiary, Laser Digital Middle East FZE, has obtained a full operating license from Dubai’s Virtual Asset Regulatory Authority (VARA). With this license, Laser Digital can now offer crypto broker-dealer and asset management services from its Dubai entity. The firm plans to introduce over-the-counter crypto trading services and investment products for institutional investors in the near future. Despite past crypto collapses, traditional financial institutions like Nomura are still showing confidence in the sector. This move comes after the Dubai regulator increased scrutiny on crypto license applicants, and other major financial players, such as Société Générale and BlackRock, have also been venturing into the crypto space.
- Immunefi, in collaboration with cybersecurity research firm Trail of Bits and the Solana Foundation, has introduced “The Rekt Test,” a security benchmark aimed at ensuring Web3 projects meet a minimum standard of security performance. The test includes seven security assessments to help consumers and investors evaluate the quality of a project before getting involved. The initiative is supported by Fireblocks and Ribbit Capital and comes in response to the staggering US$3.9 billion lost to hacks and fraud in the Web3 ecosystem last year, emphasizing the need for improved security standards.
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- In July 2023, crypto investors faced the worst month of the year, with losses totaling US$303 million due to exploits and hacks. Decentralized finance (DeFi) vulnerabilities were highlighted by the recent exploit of Curve Finance, resulting in the loss of US$52 million in digital assets. Earlier, Multichain also suffered a drain of approximately US$125 million in assets. DeFi protocols remain highly susceptible, with exploits occurring at an unprecedented speed and scale, according to Ari Redbord, head of legal and government affairs at TRM Labs. Flash loans, a sophisticated exploit method, contributed to losses, with around US$8.7 million of assets drained through this approach.
- In a recent development in the crypto ecosystem, Justin Sun, the founder of Tron, acquired 5 million CRV tokens from Curve’s Michael Egorov in a likely over-the-counter (OTC) deal for US$2.9 million, which is lower than the market price. Alongside the acquisition, Sun announced a partnership between Tron and Curve to introduce a stUSDT pool, aiming to empower the community and enhance decentralized finance. The CRV market has faced turbulence, hitting a low point at US$0.50 before rebounding to US$0.59, and Egorov attempted to stabilize his DeFi position amid sharp volatility.
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