BProtocol Uses $7 Million Flash Loan to Push Through Governance Vote On The Maker Platform

  • A first in the DeFi ecosystem, a protocol uses a flash loan to vote and influence its own governance decisions.

BProtocol Foundation, a platform concentrated on developing Bancor Network, raised a governance proposal vote on the Maker platform using a quick $7 million flash loan to pass its proposal. Maker warned users of the possibility of governance proposals being “rigged” through the use of flash loans following the successful vote completed by BProtocol last week.

BProtocol submitted a vote on Maker to be whitelisted to access the latter’s decentralized price oracle on October 23. To make it happen, the team manipulated the governance vote by borrowing a flash loan and voting for themselves – winning the vote. However, this raised questions on the negative impact of flash loans on the emerging DeFi space.

Flash loans are lending agreements that allow a user to borrow a certain amount of Ethereum and return it within the same block. These loans allow holders to simultaneously buy lower-priced tokens and sell them at a higher price on another platform. However, as seen in the latest and former exploits such as the bZx exchange, flash loans cause unexpected risks and security qualms across the largely untested DeFi ecosystem.

In BProtocol’s case, the team proposed the vote on October 23 and three days later carried out the flash loan. Here’s how it worked:

BProtocol locked 50,000 ETH tokens on dYdX exchange to borrow wrapped ETH, wETH. The team then transferred the wrapped Ether to Aave Protocol to borrow $7 million in Maker governance tokens, MKR. These tokens were then transferred and locked on Maker’s platform to vote on their whitelisting. Once the vote was complete, BProtocol unlocked the funds and paid back the loan.

In a statement on the flash loan vote by Maker, the DAO claimed the increase of flash loan attacks is causing a “risk of malicious governance action [becoming] unacceptably high.” At current times over 63,400 MKR tokens are at susceptible risk of being accessed in flash loans. Still, there is no risk of a governance attack yet – only new executive governance proposals are at risk when submitted. The statement reads,

“In the event of a malicious governance attack that leads to a redeployment of the Maker Protocol before the introduction of flash loan guards into the governance process.”

“The community and domain teams should do everything possible to burn the MKR involved in the attack, regardless of whether the owner was directly involved in the attack.”

Maker DAO is currently looking at solutions to prevent such security breaches and flash loans affecting the decentralized voting process. The team plans to increase the waiting time to execute a proposal from 12 hours to 72 hours to give the community enough time to rectify contentious proposals. They also plan to increase MKR on the hat proposal to over 100,000 MKR to prevent flash loans executions.

The executive plan to add Yearn.finance (YFI) and Balancer (BAL) as collateral on Maker has also been delayed due to the recent attacks.

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Author: Lujan Odera

What the Painful DeFi Correction Did, Actually Good For the Market?

The DeFi ecosystem started to recover this week thanks to Bitcoin’s positive momentum that drove the crypto market upwards.

While the likes of YFI, SUSHI, UNI, CRV, RUNE, BAL, and KNC are experiencing mild losses today, less than -5%, considerable gains are recorded by UMA (+32%), AST (-28%), MFT (+27%), and AKRO (+24%) with less than 10% gains seen by YFII, LRC, KAVA, LEND, MKR, COMP, SNX, ZRX, and others.

As a result, the total value locked (TVL) in the sector also saw an uptick, approaching $11 billion yet again.

With this, the DeFi tokens look to be finding the bottom, after all, following the deep correction that went on for a few weeks, that came after a wild rally, resulting in many popular tokens to lose 80% to 90% of their value.

Still, some are glad the pullback happened because “as painful as it was, it accomplished a few things: 1. Washed out the weak hands 2. Gave us a sense of where value for DeFi assets are in a big drawdown 3. Hopefully killed off random food coins offering 10000% APY farming,” noted a former partner at Goldman Sachs who is now part of the crypto fund, The Spartan Group.

According to him, even some of the family offices and high net worth individuals (HNWI) are now “starting to get curious, and they will get into the action via funds as it is too hard for them to do it themselves.”

The Macro Trend

The overall crypto market is currently experiencing the greens, with Bitcoin and altcoins seemingly belonging to the same asset class and being correlated to each other.

However, according to the quant trader and entrepreneur Qiao Wang, “Reality is BTC is increasingly behaving like a macro asset whereas alts are still very much venture bets.”

In the macro world, the markets are eagerly waiting for the US presidential election, coming in November, to end the uncertainty prevalent in the market currently. Moreover, the stimulus package isn’t expected to be approved until then, either.

According to Bloomberg’s latest crypto newsletter, while Joe Biden’s win as the president would be good for Bitcoin, in contrast with Donald Trump’s “hands-off policy,” it would hamper DeFi’s growth.

“The world has morphed into one big macro trade. Asset prices are increasingly driven by global policy expectations rather than underlying fundamentals. Deflation + insolvency risk is rising,” noted Kevin Kelly, co-founder Delphi Digital.

The current environment outlines the bull case for Bitcoin and crypto, “the backdrop has never been more conducive for this industry to thrive,” with historical Q4 performance suggesting we could push to new highs.

But the “risk of deflation, insolvencies, and upside dollar risk are of paramount concern for markets,” including bitcoin and crypto alike, added Kelly.

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Author: AnTy

Coinbase, Huobi, & Dragonfly Invest $500k into Uniswap Rival CoFix

CoFix, a decentralized exchange (DEX) focused on solving the pricing issues in the DeFi ecosystem, has received funding of $500,000 from prominent crypto firms, including Huobi, Dragonfly Capital, and Coinbase.

The project, founded in March by a China domiciled team, is set to launch tomorrow as it looks to disrupt the DEX market with its decentralized oracle pricing solution. Currently, Uniswap and peer competing DEX’s leverage external price feeds, which in some cases is derived from Centralized Exchanges or other DEX’s. This has since presented an arbitrage issue when it comes to pricing the DeFi market products.

CoFix’s value proposition is to solve this shortcoming; the DEX derives its pricing mechanism form a decentralized pricing oracle dubbed ‘NEST.’ It also leverages an underlying risk model to enhance the DeFi market efficiency further. The NEST protocol introduces various financial parameters for price information and a mathematical model to account for the associated risk, hence an on-chain computable finance ecosystem.

According to an earlier press release by CoFix, its newly designed approach for pricing DeFi, essentially reduces associated risks and arbitrage opportunities. This gives traders a better opportunity to participate in the DeFi market, given the pricing harmonization. CoFix CEO, Sharlyn Wu, said that,

“CoFiX is trailblazing a new path in DeFi with an innovative solution that can truly attract institutional traders and market makers to the space,” said Chief Investment Officer Sharlyn Wu … It leads DeFi into a new chapter of ‘Computable Finance.”

CoFix is also set to launch a liquidity mining initiative later in the month, where the firm will distribute 90% of its native token $COFI to the platform users. Founding members of this DEX include devs from the Alpha Wallet DeFi project and the SECBIT blockchain security team.

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Author: Edwin Munyui

As Decentralized Finance Continues to Evolve, Big Four Audit Firms Will Play a Major Role in DeFi

Big four audit firms are set to be a significant part of the Decentralized Finance (DeFi) ecosystem according to the latest blockchain industry report by German-based non-profit, dGen.

The DeFi space, which has seen tremendous capital gains in TVL, will grow even more prominent in the coming decade as per dGen insights on its report. Jake Stott, the co-founder of dGen, noted that support from other financial market stakeholders would be inevitable going forward. Tom Howard, Chief Strategy Officer at Mosendo, said;

‘Over time, traditional financial institutions will have no choice but to interact with  decentralized finance tools, slowly disinter-mediating the industry from the inside out.’

Functions like verifying the authenticity of an invoice, tracking payment settlements, and insurance claims could occur faster with the help of a blockchain. Their role will be to act as an intermediary between DeFi and traditional finance.

Dubbed the ‘Decentralised Finance: Usecases & Risks for Mass Adoptionreport, dGen paid particular attention to the DeFi space. Currently, over $2.5 billion in funds is locked within DeFi based products. It is an area that has been hailed as the future of markets given almost all traditional assets are finding their way onto Ethereum based protocols. Though still at its infancy stages, dGen acknowledged this underlying potential in DeFi stating that it,

“could leapfrog the current FinTech industry, providing a new structure of financial services.”

Consequently, this optimistic narrative has gained massive support from across financial services, tech, and the academia elite. DGen’s researchers are bullish that the market could grow past the trillion-dollar mark by 2030. The report highlights that DeFi will: “Provide income for thousands of gamers, streamers, and influencers”

It will also be adopted by European financial institutions who will switch to offering “DeFi-enabled savings and pension accounts.”

A recent Q2 report by industry giant, ConsenSys, concurs on the possibility of a DeFi future given historical growth rates in the past three months. It goes on to detail that Bitcoin tokenization protocols and Yield farming frenzy are the fundamental factors behind this growth as per now.

While the DeFi space has emerged as an avenue to make better interest compared to zero percent in some jurisdictions, it continues to face security threats arising from the core infrastructures.

“Knowledge and security risks will continue to reduce, on top of a growing number of securities in the event of a hack. It appears the solutions the industry needs to scale will come from within the industry itself.”

The team is, however, optimistic the underlying issues might be resolved in as little as one year. Kain Warwick, Founder of Synthetix told dGen,

‘Insurance on DeFi is still extremely limited[…] DeFi still has significant tail risk, so insurance is likely to remain very costly in the short term, but as protocols mature, costs should come down[…] allowing for simpler and more useful insurance to emerge’.

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Author: Edwin Munyui

Microsoft’s Blockchain-Based Identity System, ION, Launches Amidst Data Privacy Concerns

Decentralized Identity Foundation (DIF), a non-profit organization aiming at building a digital identity ecosystem, announced the launch of the beta version of Microsoft’s Identity Overlay Network, a Bitcoin-based identity platform.

At the mainnet launch, Microsoft’s ION will enable over 1.1 billion people who lack a legal ID to acquire one and also help in identifying and contact tracing COVID-19 patients.

The accelerating progress in government partnerships to develop decentralized digital ID systems, however, is facing resistance from several experts who believe it may lead to privacy concerns, hacks, and breaches of personal information.

Microsoft’s ION Partnership With Casa Wallet

The spread of COVID-19 has seen multiple digital identity and contact tracing apps come up in a bid to curb the spread of the pandemic. Microsoft’s ION will partner with Casa, a startup known for its Casa HODL Bitcoin wallet, to improve the “authentication, privacy and security” of users’ digital identities on the platform. ION’s project lead, David Buchner said:

“We are thrilled to have Casa collaborating on ION with us, which showcases the potential of building real-world applications that leverage the strong foundation Bitcoin provides.”

The ION project employs a tagging system, whereby instead of including all the data on a specific transaction on the platform, the info is given a reference number. The number is then added to the ledger, and is easy to retrieve the transaction at any time from the ION nodes.

Several other initiatives, including ConsenSys, backed the project, Uport, form the DIF, and this will allow the interoperability of the systems across the DIF platform. DIF leader Rouven Heck said:

“Everybody wants to move fast and has a high interest in demonstrating this technology can be very powerful.”

The miners on the BTC network validate and verify the reference numbers for a small fee.

A Race to Form Partnerships With Governments

Competition across the blockchain digital identity industry is spiking as governments continue to show interest in citizens’ medical and financial records. The targeted blockchain contact tracing on COVID-19 platforms has seen adoption by several governments and corporations.

In compliance with the World Wide Web Consortium (W3C) credentials, over sixty corporations around the world formed the COVID-19 Credentials Initiative (CCI) to develop digital identity passports. Late last year, eleven South Korean startups announced plans to launch the blockchain-based digital identification service within the government’s regulatory sandbox.

However, some analysts remain skeptical of the actual safety and security of the personal data collected on these platforms.

‘Data Collected is Extremely Hard to Protect.’

On the subject of contact tracing and data collection by these decentralized identifiers, Blockchain Commons founder Christopher Allen said the project would have a hard time upholding user privacy as the data such as the location of the patient is “incredibly hard to protect.”

Microsoft and IBM, who have been at the forefront of funding and developing digital identifiers, have faced much criticism, Harry Halpin, CEO of privacy-tech startup Nym, the latest industry player branding these systems “feel-good rhetoric.” Harry sarcastically said:

“Governments need to establish identities of who owns these keys, so they say, ‘OK, we’ll have an open standard, call it decentralized, and make it mandatory.’”

As the digital id systems grow, the Financial Action Task Force (FATF) released guidance for government regulation on financial institutions that use these systems.

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Author: Lujan Odera

Ethereum, Tron, and EOS Form ‘Big Three’ in the 2019 DApp Industry Report

  • While Tron is best defined as the “Las Vegas on the blockchain,” EOS’ dapp ecosystem fizzled out in 2019

Decentralized applications (Dapps) continues to thrive and evolve in 2019. Last year, 1,955 new DApps were launched, taking the total tally of DApps to over 4,000, according to the 2019 Dapp Market Report by DappReview.

The scale of Dapp users, however, remains far behind the centralized applications while the total value of on-chain transactions reached $23 billion.

In Dapp space, Ethereum’s leading position “remains unbreakable” with both Tron and EOS maintaining a good momentum of development. These three public chains account for more than 98.65% share of total transaction volume of the dapp market, forming what DappReview says the “Big Three” in dapp space.

Users’ Enthusiasm Fell in H2 2019

During the first half of 2019, Casino and high-risk DApps contributed the most to the transactions on Tron and EOS.

With 8 of the top 10 Tron DApps being casino DApps, Tron is best defined as the “Las Vegas on the blockchain.” Wink was the most successful and profitable Casino dapp on Tron in 2019.

The dapp ecosystem of EOS started well but soon fizzled out. In the last quarter of 2019, EIDOS, an airdrop smart contract almost paralyzed the entire EOS after its launch on Nov. 1st.

In the second half of 2019 however as the price fell about 50%, so did users’ enthusiasm for speculation. This led to a decline in transaction volume of these blockchains.

Other than these “Big Three,” nine public chains, IOST, STEEM, NEO, ONT, LOOM, TOMO, WICC, WAVES, and WAX with a total of 354 DApps were listed in the last year.

The Most Vibrant Area of Crypto Industry

The dapp that took the limelight in 2019 was DeFi, which become the “growth gist” of Ethereum. DeFi includes financial applications and exchange services like payment solutions, asset management services, and borrowing and lending markets.

The transaction volume of DeFi accounted for over 90%, 61.05% of exchange DApps and 29.98% of finance daps, of the total transaction volume on Ethereum at $12.8 billion.

Last year, the monthly number of unique DeFi users ranged between 40k and 60k. On average Ethereum-based DeFi platforms recorded the unique daily users of 3,456. Taking ERC-20 tokens into account, Ethereum’s transaction value at $12.8 billion exceeds the combined value on both EOS ($6.1 billion) and Tron ($4.4).

During last year, the number of active projects which are defined as those with more than 50 daily unique users nearly doubled.

Within the crypto space, DeFi however, remains small as the total collateral locked in staking at $6 billion is about 5x than the total collateral in DeFi.

“While DeFi represents a tiny segment of the crypto-industry, it is one of its most vibrant areas,” states the report.

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Author: AnTy

Bitcoin Continues to Set New Performance Records for Its Network Hash Rate Power

Bitcoin dominance has continued to soar in the cryptocurrency ecosystem. BTC has set new records this month for its network hash rate, which indicates that miners jiggled off delicate price accomplishment.

Bitcoin Records All-Time Hash Rate High in October

Blockchain, which is the authoritative resource that keeps track of data established, the hash rate reached 114 quintillion hashes per second on the 23rd of this month.

This, by far, is the enormous recording ever shared by others, including BitInforCharts, which at the same time also recorded an all-time high of over 110 quintillions. On 10th October, Coin Dance recorded an all-time high of 134 quintillions.

Hash rate is the all-inclusive computing power required to intricate agreements on the Bitcoin infrastructure. More potential advocates perfect network security as well as potential profits in Bitcoin mining. Meaning, miners are expecting an increase in Bitcoin’s value soon.

The Latest Price Drop Is Testing Miners Profitability

The network hash rate seemed to undergo rapid change last month. At the same time, Bitcoin dropped by 40% in a day.  Experts elaborated the data did not imply miners were giving up on Bitcoin as reported by Cointelegraph.

Be it as it may, the continuing hash rate before the fall in the price of Bitcoin drew a line showing their laxity in investing in the industry- so is its profitability. This week, the mining giant Bitmain started the world’s largest mining farm in Rockdale, Texas.

The profitability measurement is nearing its cheapest in 12-months. Cointelegraph reported that one miner said that $6,500 is the bottom line to keep gains for miners. Bitcoin could experience lower hash rates if it scales over it. This may lead to miners to down their tools until when the prices return to normal.

Dovey Wan, one of the investors, said that Bitmain’s Antminer S9 mining supply model is one he famous miners around the globe. At the moment, the miner is in the negatives at the present prices, excluding other costs such as electricity.

It is, therefore, a matter of time to see if the fall in Bitcoin price will have a contradiction on the hash rate.

All Eyes On Block Prize Method

Miners will now keep up with at least half of the new Bitcoins per block starting May 2020. Instead of 12.5 BTC, they will now compete for 6.25 BTC.

Reporters are anticipating the block halving to increase Bitcoin price with a comparison of up to $63 million not able to be used each week.

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Author: Ali Qamar

ThreeFold Foundation: Building a Better Internet for Tomorrow

The Threefold Network is an ecosystem that supports the development of a decentralized marketplace for storage, compute, and applications.

As stated on its website, ThreeFold’s technology took almost two decades to develop. It’s based on a robust foundation and aims to provide a much better version of the internet.

The ThreeFold team states: “We believe the world needs a decentralized Internet, to bring sustainable and neutral access to information and education for our generation and those to come. And we at ThreeFold are committed to providing you with complementary solutions.”

The Problem

The internet today is not distributed. It also not neutral, secure, or environmentally-friendly, according to the ThreeFold team. Today’s internet is also not cost-effective to use.

As noted on ThreeFold’s official website: “[Today’s internet] requires too many layers and too many human gatekeepers. And it cannot meet the future demand of internet capacity needed to support Big Data, Internet of Things (IoT), and Artificial Intelligence (AI).”

In order to address these shortcomings, the ThreeFold team has developed a Grid, which will serve as an alternative to centralized cloud solutions. The Grid is described as a global, neutral, and sustainable network of “autonomous storage and compute Internet capacity,” developed by ThreeFold Farmers.

ThreeFold Grid Has More than 80 TB of Storage Space

The Grid reportedly has over 80,000 terabytes (TB) of storage space and 14,000 cores. Applications that can run on the Linux operating system can also run on the ThreeFold Grid, the platform’s development explains.

However, the ThreeFold Grid offers more privacy and security at a more affordable cost.

The ThreeFold Token (TFT) is a decentralized currency that can be used to acquire autonomous and decentralized internet resources and services, including compute, storage, applications. These are supplied through the ThreeFold Network and created only when more capacity is added to the ThreeFold Grid.

Truly Own Your Data With ThreeFold’s 3Bot

As mentioned on the platform’s website, 3Bot has been developed on top of ThreeFold Grid and “acts as your digital self.”

As described by the ThreeFold team: “[3Bot is] your personal all-in-one application, which gives back the ownership of your data to only you – and no one else. 3Bot is your escape from the many popular centralized and often-abused applications used by a big majority of the world today. Your digital self grants you full access to a 100% neutral and decentralized digital life.”

The ThreeFold team emphasizes the importance of being autonomous because it helps us solve problems while creating more opportunities.

Being autonomous “is better for you – end users and organizations – and our planet,” the ThreeFold team states.

To learn more about ThreeFold, click here.

Disclaimer: This is a guest post from ThreeFold. BitcoinExchangeGuide does not endorse nor are we responsible for the content included in this release. We encourage all of our readers to do their own research before interacting with the company.

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Author: Bitcoin Exchange Guide News Team

Enterprise Ethereum Alliance (EEA) To Launch Its New Mainnet Initiative

Enterprise-Ethereum-Alliance-EEA-To-Launch-Its-Mainnet-Initiative

One of the main consortiums based on the Ethereum ecosystem, the Enterprise Ethereum Alliance, has just announced that a group of developers is being tasked to work on the collaboration between the mainnets of the members.

This group will be known as the EEA Mainnet Initiative and will have the goal of accelerating the cooperation between the companies that are a part of the consortium. They will get together to develop solutions that will make their work more interoperable than it is right now. According to the group, the initiative will help them to match the current requirements of the market, which include greater interoperability.

One of the board members of the EEA, Marley Gray, which also works on Microsoft, affirmed that Ethereum-based mainnets need to increase not only their interoperability but also the scalability of their projects in order to prepare for the future.

Joseph Lubin, one of the creators of Ethereum, founder of ConsenSys and part of the EEA, also talked about this. He affirmed that Ethereum technology is used today more than ever and that most major organizations are starting to get interested, so it is the time to upgrade the tech.

More about this project will be available on Devcon5, which is set to happen in October.

Aya Miyaguchi Will Be A New EEA Board Member

During the same time that the company announced about the new initiative, the role of Aya Miyaguchi was also revealed. She was welcomed as the new board member of the consortium. According to Miyaguchi, this is an exciting time to be a part of the industry.

At the moment, the EEA has over 450 members, being one of the most important blockchain consortiums in the market at the moment. Companies such as JP Morgan Chase, Accenture, Microsoft, Banco Santander, and Cisco are all a part of the project.

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Author: Bitcoin Exchange Guide News Team

Closed Polish Crypto Exchange Bitmarket Sees Co-Owner Shot Dead, Body Buried

Closed-Polish-Crypto-Exchange-Bitmarket-Sees-Co-Owner-Shot-Dead-Body-Buried

Crypto ecosystem generally attracts negative stories of hacks and scams. However, there are times, albeit not too often, when the crimes are as serious as kidnapping and murder. This was the case for the unfortunate Tobias Niemiro who was found dead with a bullet in his head in a forest near his house.

Exchange Shut Down

The exchange that Tobias owned, Bit Market – Poland’s second-largest cryptocurrency exchange was shut down permanently earlier this month. Marcin Aszkiełowicza, a Director working for Bitmarket revealed that hackers were able to steal over 600 bitcoins from the firm a couple of years ago.

The group also left a cryptic message in which they stated that following the attack, the trading platform would be shut down completely. This was primarily because of lack of liquidity.

Aszkiełowicza went on to say:

“The persons actually managing the stock exchange at the time, being aware of this immensely difficult situation, left me alone with the problem of a huge deficit. For the last 2 years, I have been doing everything with the whole team to bring the company out of this stalemate.”

The interesting part in this story is that Niemiro had released a separte statement for the shut down of the exchange. He had earlier said:

“ I lost everything because somebody caused the collapse of the exchange. Now, I’m losing face and my good name for which I’ve worked all my life. I am one of the victims.”

Suspicious Circumstances Around The Death

Tobias Niemiro lived in the small town of Olsztyn, located about 3-hours from the Polish capital of Warsaw. The first reports of the death show that it was a suicide, although police haven’t ruled out foul play yet.

Adam Socha who is a friend of the deceased says that he got an-email just 3-hours before his supposed death. He explains:

“The email was long. It seemed like he had found himself in an environment of shady businessmen. He gave names. I will not disclose its content because of the investigation. I forwarded the email to the prosecutor’s office. He also wrote that he would provide certain materials, but he didn’t have time.”

This event sends an immediate flashback to the events following the death of QuadrigaCX founder. Gerald Cotten mysteriously passed away while working in India due to complications from Chron’s disease and the exchange ended up losing 100s of millions of dollars.

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Author: Sritanshu Sinha