OpenSea Bug Transfers Tokens to Burn Addresses, Over $100K Worth of NFTs Lost

OpenSea Bug Transfers Tokens to Burn Addresses, Over $100K Worth of NFTs Lost

Despite the success of the crypto market, the sector has found it hard to shake off the constant security issues that plague the industry.

This week, the non-fungible token (NFT) space got a brutal reality check after NFT marketplace OpenSea was hit by a bug that destroyed multiple tokens.

Burning Tokens Without Permission

On Wednesday, Nich Johnson – a lead developer on the Ethereum Name Server (ENS), announced on Twitter that he had accidentally “burned” the first ENS ever registered. The developer explained that he had tried to transfer the ENS – named “rilxxlir.eth” – to one of his personal accounts.

While Johnson had planned to offer the ENS as an NFT through PaperclipDAO, it would have been impossible to do this until he transferred the ENS as an ENS account held the name. The developer moved to OpenSea to process the transfer, where he discovered a glitch in the marketplace’s code.

Rather than send the ENS to Johnson’s address, OpenSea sent the NFT to a burn address-never to be seen again. OpenSea has reportedly patched the issue, but not before it affected 32 other transactions – involving 21 users and 42 traded NFTs. At the time of his tweet, all NFTs affected were collectively valued at 38.44 ETH.

“It transpires I was the first and apparently only victim of a bug introduced to their transfer page in the past 24 hours, which affected all ERC721 transfers to ENS names. Ownership of rilxxlir.eth is now permanently burned,” Johnson said.

Not the Best Time for OpenSea

The transfer glitch on OpenSea is quite disturbing, considering how important the marketplace is in the sector. But this was expected considering their staffing problems. In late August, the company’s head of product, Nate Chastain, posted that they had been severely understaffed, with only 37 people processing 98 percent of all NFT volumes.

OpenSea’s careers page also shows various open positions, from business development officers to finance professionals and full-stack engineers. Chastain added that OpenSea is looking to expand its team to take the stress off its existing workforce.

The company’s security flaws and staffing issues are also coming at a bit of a challenging time, with competitors now coming into the market. This week, top decentralized exchange and derivatives trading platform FTX launched a native NFT marketplace on the Solana blockchain.

As the company explained, the NFT marketplace is exclusive to American customers, and it will enable users to buy, sell, and mint NFTs. All tokens are tradable across the Etheruem and Solana blockchains, with deposits and withdrawals coming in the next few weeks. The deposits and withdrawal feature will essentially allow users to deposit external NFTs on the platform too.

Top crypto exchange Binance also launched an NFT marketplace in June. The company is looking to reduce transaction costs, and it will be based on the exchange’s blockchain infrastructure.

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Author: Jimmy Aki

Unique Addresses Using DeFi Protocols Grow by 65% in Q2, Institutional Capital Flooding in DeFi Too: ConsenSys

Unique Addresses Using DeFi Protocols Grow by 65% in Q2, Institutional Capital Flooding in DeFi Too: ConsenSys

As of July 1, 2021, 161 million unique Ethereum addresses have been created, an increase of 10% over Q1 and a decrease in the 12% growth since January, according to ConsenSys’ 2Q21 report.

2.91 million unique addresses used at least one DeFi protocol by the end of Q2, representing a 65% growth from Q1. However, DeFi addresses are just 1.81% of all Ethereum addresses. The report noted,

“As community driven education, simple user interfaces, appealing yields, and general awareness around DeFi best practices increased throughout the quarter, so too did the number of new addresses.”

Growth in DeFi usage can also be seen in popular Ethereum wallet, MetaMask’s monthly users, which surpassed 8 million due to the development of DeFi applications on other Ethereum Virtual Machine (EVM) compatible networks that users can access via MetaMask, like BSC and Polygon.

These EVM compatible blockchains took off in Q2, attracting users with much lower fees and higher throughput with the number of transactions on BSC and Polygon’s Proof of Stake commit-chain overtaking Ethereum.

In the DeFi space, DEXs saw their highest volume ever in Q2 at $343 billion, surpassing the leading crypto exchange in the US, Coinbase’s $335 billion volume in Q1. Coinbase had identified decentralized exchanges as one of the key threats to their business in S-1. It went public via a direct listing in Q2.

Interestingly, DEXs enable trading only for EMV-compatible assets while more than half Coinbase’s trading is in Bitcoin.

Regulated Institutional Investors Stepping In

Over the past year, DeFi has come a long way and has now started to attract institutional investors’ attention. ConsenSys noted,

“With radical financial innovation and growth comes radical investment returns and opportunity, leading to more and more institutional capital flooding into this space.”

This can be seen in Coinbase custodial assets at over $90 bln and Gemini having more than $30 bln in assets under custody, while purely institutional custodians like Bitgo having have at least $16 billion assets under custody.

The report further mentions PWC reporting 47% of traditional hedge fund managers representing $180 billion of AUM looking at investing in crypto. An Intertrust survey finds that hedge funds are expected to hold 7% of their assets, equating to $312 billion in crypto in 5 years.

DeFi projects like Aave and Compound are already taking steps towards this with permissioned pools and Treasury to earn a fixed rate. MetaMask also launched a wallet built for institutions with an address tracking system called Codefi Compliance that allows custodians to identify addresses within pools suspected of nefarious activity effectively. The report says,

“Driven to take advantage of the exceptional investment returns, but also able to do so from a regulatory and compliance perspective, more regulated institutional investors are now stepping into this space.”

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Author: AnTy

Only 1% of Ethereum Addresses Are Currently Using DeFi: ConsenSys Report

Only 1% of Ethereum Addresses Are Currently Using DeFi: ConsenSys Report

As of April 1st, 2021, there were 146 million unique Ethereum addresses, 16 million more since the beginning of the year. However, only 1% of these addresses are using decentralized finance (DeFi).

By the end of quarter first, 1.75 million unique addresses had used at least one DeFi protocol, despite DeFi users growing by 50% this quarter and a 10x increase from the end of Q1 2020, states the latest report on the DeFi sector by ConsenSys.

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The growth of DeFi represents the increasing demand for the sector, increasing the median gas price to 50% in ETH and average transaction fees to spike 4.2x.

In Q1 2021, Ethereum’s total fees were double of the Bitcoin blockchain. This gap continues to widen between both the blockchains, with Ethereum generating more than 850% fees daily than Bitcoin this month. Even leading AMM, Uniswap is doing more in fees than the largest network.

Due to the persistent issue of high fees, developers are moving to layer 2 solutions such as Polygon (MATIC), Optimism, and Starkware’s STARK-based roll-ups.

Within DeFi, each sector gained a 50% increase in users in the first quarter. DEX volume increased 2.5x to $63 billion, and outstanding loans rose 3x to $10.8 billion.

The report further covered NFTs, which saw a meteoric rise due to the coronavirus pandemic, which left 62% of artists unemployed. NFTs are about 10% of global art sales, it noted.

Now, in Q2, the trends to watch, according to ConsenSys, involve DAOs investing in NFTs and Flashbots dominating the Ethereum Network.

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Author: AnTy

Just 270 Addresses Responsible for Majority of Money Laundering in Crypto: Chainalysis

Just 270 Addresses Responsible for Majority of Money Laundering in Crypto: Chainalysis

The United States, Russia, and China receive the highest volume of digital currency from illicit addresses.

Just 270 deposit addresses are being used for the majority, 55% of all of the cryptocurrency value sent from illicit addresses in 2020, as per the latest research of Chainalysis. These addresses collectively received $1.3 billion worth of illicit crypto, while just 24 received over $500 million worth of it.

Additionally, 1,867 deposit addresses received 75% of all cryptocurrency value sent from illicit addresses in 2020. This level of concentration is greater than in 2019, showing that a small group of crypto services is being used by criminals to launder hundreds of millions of dollars.

Money laundering actually makes up a huge portion of the illicit funds that travel to service deposit addresses, as per the report. A smaller but significant portion of illicit funds also goes to deposit addresses that do a high volume of legitimate transactions and flies under the radar.

Cryptocurrency sent from illicit addresses facilitating money laundering tends to wind up at just a few services, mostly five including mainstream “risky” exchanges, mixers, gambling platforms, ever since 2017.

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The report also found that the United States, Russia, and China received the highest volume of digital currency from illicit addresses, reflecting their high shares of crypto trading volumes.

Scams followed by stolen funds make up the largest crime type in the US while Russia receives a “disproportionately large share” of darknet market funds, which according to Chainalysis, is because of Hydra. As for China, ransomware and stolen funds are the dominating crime types that the country receives funds from.

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Author: AnTy

“DeFi is Inevitable,” 4Q20 Recorded 100k New Addresses Daily: ConsenSys Report

“DeFi is Inevitable,” 4Q20 Recorded 100k New Addresses Daily: ConsenSys Report

“This year Ethereum proved that an entire decentralized financial (DeFi) ecosystem is inevitable,” reads ConsenSys’ DeFi 4Q20 report.

While this gained momentum last year, with all the drama surrounding the retail traders pumping up the prices of heavily shorted stock prices and now being suspended from trading them on Robinhood, a popular trading venue among retailers and other platforms are working on taking this moment forward in speed this year.

After the DeFi sector heated up in Q2 and cooled down in the subsequent quarter, Q4 saw its rise yet again. By the end of this quarter, 1,195,000 unique Ethereum addresses interacted with DeFi protocols, more than doubling in the quarter. Moreover, on average, 100k new addresses were created daily in Q4 2020. Custody providers and professional traders are also increasingly seeking exposure to the sector. The report states,

“With interest rates on trading pairs or lending protocols in the range of 5-12% APY compared to US treasuries at 0.92% yield, it’s easy to see the appeal.”

So much activity had an obvious effect on the fees, which saw “tremendous growth.” Besides the team, these fees also go to the uses of the applications.

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During this period, stablecoins, which are essential to the rise of DeFi, also continued their success. 70% of all the stablecoins worth $20 ln as of Jan. 1, 2021, are issued on Ethereum only.

Interestingly, “stablecoins are now responsible for more trade volume on Ethereum than the asset that pays for computation — ether (ETH) — itself,” at almost $1.6 trillion, notes the report.

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DeFi is also attracting other blockchains, and by the start of 2021, more than 138,774 BTC (about $3.9 billion) has been converted to ERC-20s.

The report also covered the growing trend of NFTs, whose marketplace value is estimated to be $52,293,650.

Despite all this growth, “DeFi is still in its infancy as an industry” and has a huge room for growth with “many new innovations just on the horizon that will further increase the accessibility and variability of DeFi.”

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Author: AnTy

Big Uptick in 1k BTC Addresses Shows Institutions Bought the Dip

Big Uptick in 1k BTC Addresses Shows Institutions Bought the Dip; Goldman Sachs says Still Just 1% of Institutional Money

Despite the healthy pullback, more correction cannot be ruled out yet but $30k will be protected because many institutional investors bought around this level.

Bitcoin is taking a breather and hovering around $35,000 after the deep pullback earlier this week. This profit-taking at an ATH of $42,000 was expected after Bitcoin rallied more than 1,000% from the March 2020 lows.

“There’s signs that retail investors are taking profit,” said Ryan Rabaglia, OSL’s global head of trading. “Heightened volatility is often correlated with an uptick in retail participation.”

The market is particularly focusing on the US Dollar Index right now, which has been gaining strength, currently hovering around 90.

“We think a pullback is healthy,” said David Grider, the digital strategist at Fundstrat Global Advisors. According to him, the recent price action doesn’t indicate that Bitcoin has topped out.

However, further losses can’t be ruled out either, with miners continuing their selling while no significant stablecoin inflows in the picture. No outflows are seen from Coinbase either; as a matter of fact, BTC is flowing into exchanges.

On the basis of this, “We might have second dumping,” said Ki Young Ju, CEO of data provider CryptoQuant.

Still, $30k will be protected, and in the event of a dip, we might not go down below $28k because “there are many institutional investors who bought BTC at the 30-32k level,” Young Ju added.

These institutions were actually into buying the dips that came on Sunday and Monday. The large amounts of BTC holders that can be seen as a proxy for institutional adoption “increased significantly” since the start of 2021. This jump in address with at least 1,000 BTC shows that this institutional adoption is here to stay.

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However, according to Goldman Sachs’ Jeff Currie, the level of institutional investment in the market is still very small though “the market is beginning to become more mature.”

“The key to creating some type of stability in the market is to see an increase in the participation of institutional investors, and right now they’re small,” said the investment bank’s head of commodities research on CNBC., adding that the investment in BTC is, “roughly 1% of it is institutional money.”

While for institutions, Bitcoin is a hedge against fiat debasement and risk of inflation, as it emerges as a store of value, for some, it is a way to fix economic injustice as well.

“For the first time in history, we have a Plan B option to the current financial system which has seen years of redlining, racial discrimination and other egregious acts by retail banks to the Black community,” said Isaiah Jackson, author of “Bitcoin & Black America.”

According to him, Bitcoin gives Black people an opportunity to not only shift their money but also their mindset because the world’s leading digital currency is unconfiscatable and has no barrier to entry.

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Author: AnTy

Over 12,000 BTC Moved to Coinbase’s Custody Wallet; Bitcoin Active Addresses Climb to 1.1M

Over 12,000 BTC Moved to Coinbase’s Custody Wallet; Bitcoin Active Addresses Climb to 1.1M

While Bitcoin’s adoption grows at a fast pace, “BTC veterans continue to hold strong.”

It’s been over a week now that the price of Bitcoin has been keeping above the 2017 high of $20,000. The BTC price continues to hold above $23,000 but is in red today with $4.77 billion in ‘real’ volume.

Price-wise, Bitcoin is trading in a range between $23,300s and $24,000. Trader Josh Rager said,

“A break above $24,000 would lead to bullish continuation but looks like liquidity was grabbed with fake-out. Further pullback with close below $22,550s likely lead to back down to $20k.”

The ongoing strong institutional adoption, however, spells only bullish momentum for BTC. Today, 12,006 BTC flowed out from Coinbase and were transferred to the “custody-looked-like wallets,” which makes Ki-Young Ju, CEO of CryptoQuant “very bullish on BTC.”

CryptoQuant

Source: CryptoQuant

The biggest benefactor of this price action on the bitcoin network has been the fees, transfer value, and the market cap of the digital asset.

Last week, the network transferred $4.3 billion in adjusted value, up from $0.8 billion at the start of 2020. Much like this, in January, the average fee on the network was 2 cents which have now increased substantially to $12.

Amidst this price action, the active BTC addresses have hit a new yearly high.

The number of active addresses, 7-day average, on the Bitcoin blockchain is currently at 1.1 million, fast approaching the December 2017 record high of 1.13 million active addresses.

These addresses have been increasing consistently throughout this year to reach the levels that haven’t been seen since late 2017. At the beginning of this year, the number of active addresses was about 500k on average which went to 1.14 million just this week.

While the number of bitcoin daily active addresses doubled over the course of 2020, those holding at least 0.01 BTC grew by more than 700k during the same period.

“While adoption grew, BTC veterans continued to hold strong,” noted Coin Metrics.

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Author: AnTy

Dutch Crypto Exchanges Want a Screenshot of Your Wallet to Prove the Legitimate Ownership of BTC

Bitcoin exchanges in The Netherlands are taking additional verification measures regarding BTC addresses in reference to the Dutch Central Bank (DNB)’s Sanction Act.

One such exchange Bitonic announced on Monday that it is now “forced” by the DNB to provide additional details regarding the intention behind BTC purchases and the kind of wallet you are using. As such, Bitonic is now,

“Obligated to verify that you are the legitimate owner of the given bitcoin address by requesting you to upload a screenshot from your wallet, or by signing a message.”

As per the Sanction Act, released in Nov. 2019, no funds are to be made available to the individuals and entities that are on the Dutch and EU sanction list by the crypto service providers.

In the event of an actual hit in a sanctions list, the institution needs to notify DNB and either freeze any assets, block the transaction, or do both.

The exchange is against the measure and has pleaded with Bitonic to drop the requirement as it is ineffective and disproportionate. Bitonic is inviting its customers to send their complaints to [email protected] as an “opportunity to formally object to these additional measures and the registration of this data.”

According to the exchange, the Netherlands is currently the only country in the European Union to demand such “far-reaching measures.”

Reportedly, Switzerland also mandates such information from the cryptocurrency exchanges.

Earlier this month, 39 crypto companies, including exchanges and custodial wallet providers, applied for registration with the Dutch central bank to provide crypto services.

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Author: AnTy

Bitcoin Millionaire Addresses Reaches Highest Level Since January 2018

As Bitcoin’s price holds strong at $13,000, the number of Bitcoin millionaire addresses are also hitting levels not seen since the last bull run.

Those addresses that have been holding more than $1 million worth of BTC have surpassed 20,000, the highest level since January 2018, as per Glassnode.

These numbers have been increasing since March when the sell-off pushed these addresses from about 17,500 to nearly 7,500.

In August, these numbers took a big leap when it added about 5,000 new addresses. Now, it has reached levels that we came close to in the middle of last year.

The number of addresses with more than $1 million of Bitcoin reached its all-time high at just above 28,000 at the top of the market in December 2017 when BTC price hit $20,000.

According to Bitinfocharts, while 20,554 addresses are richer than $1 million, only 2,754 addresses have $10 million worth of BTC.

Meanwhile, more than 25 million addresses have $1 worth of BTC, close to 9.7 million addresses have more than $100 of BTC and 3.64 million has $1,000 worth of Bitcoin.

The number of addresses richer than $10k worth of BTC is moving to 990k, and 182,414 addresses have $100k BTC.

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This has been as Bitcoin works towards solidifying its role as digital gold, a store of value. Recently, a team of analysts at JP Morgan also touted the leading digital currency to be in “intensive” competition with gold, suggesting a “doubling or tripling” in its price if this trend continues.

“The older cohorts prefer gold, while the younger cohorts prefer Bitcoin as an ‘alternative’ currency,” read the research note.

The analysts also added that Bitcoin’s long-term prospects could further improve because of its utility as a payment mechanism.

In that regard, just yesterday, a BTC wallet holder moved over 88,857 BTC, worth about $1.15 billion for a fee of mere 0.00027847 BTC, worth less than $4.

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Author: AnTy

Data Breach at Popular Hardware Crypto Wallet Ledger Affects Million; Trezor Fires Shots

Popular crypto hardware wallet Ledger reported the leak of 1 million email addresses and 9,500 detailed personal information of its customers.

Ledger’s competitor, Trezor, took this opportunity to advertise, “After 90 days, we get rid of all sensitive data about your order in our e-shop database (even e-mail addresses),” complete with promo code “DATAPRIVACY” to offer a discount on its products. But it’s limited to 9500 users.

The company came to know of the data breach on July 14th when a researcher participating in Ledger’s bounty program made them aware of it; Ledger shared in its official report. Ledger immediately fixed the breach and conducted an internal investigation.

Now, a week after patching the breach, the company discovered the vulnerability had been exploited on June 25th by an unauthorized third party. The entity accessed Ledger’s e-commerce and marketing database through an API key, which has now been deactivated and is no longer accessible.

The database access, which has been used to send order confirmations and promotional emails, including mostly email addresses along with contact and order details such as first and last name, postal address, email address, and phone number.

Approximately 1 million email addresses were affected, and a subset of 9500 customers was exposed for first and last name, postal address, phone number, or ordered products.

“Your payment information and crypto funds are safe,” as the data breach has no link and impact on hardware wallets, crypto assets, or Ledger Live security, ensuring the company.

The company has since then informed all of its customers about the situation, and those whose detailed personal information is exposed have been sent dedicated emails.

Ledger has also notified the CNIL, the French Data Protection Authority, which ensures that data privacy law is applied to the collection, storage, and use of personal data.

Last week, they partnered with Orange Cyberdefense to assess the situation and are actively monitoring the evidence of databases being sold on the internet.

The company is now extending the scope of its security and organizational program to e-commerce, which initially focused on Products (HW and Vault). Further steps are taken to meet the requirements listed in ISO 27001.

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Author: AnTy