Ethereum 2.0

SafeMoon hacker agrees to return 80% of stolen funds: Finance Redefined

The SafeMoon hacker said the exploit wasn’t intentional and that they plan to return majority of the funds.

Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.

This week in DeFi saw the hacker behind the $8.9 million SafeMoon exploit agree to return the majority of the stolen funds. According to the project’s developers, the hacker will return 80% while keeping the remaining 20%.

United States crypto lender BlockFi was granted an additional 48-day extension to submit its exit plan by a New Jersey bankruptcy judge, exploring the potential sale of company assets and restructuring.

Ether (ETH) price hit a new 11-month high even as post-Shapella withdrawals peaked at over 1 million ETH. Meanwhile, Ethereum gas fees touched new multimonth highs owing to a fresh memecoin frenzy. The heavy traffic on the network allowed a maximal extractable value (MEV) bot to make millions in sandwich exploits.

The top 100 DeFi tokens broke out of a two-week bullish streak that began in anticipation of Ethereum’s Shapella upgrade, with most of said tokens trading in the red on the weekly charts.

SafeMoon hacker agrees to return 80% of stolen funds, says the development team

The attacker who drained $8.9 million worth of BNB (BNB) from SafeMoon has agreed to return 80% of the funds, according to an April 18 blockchain message from the SafeMoon team.

The encoded message was the latest in a series of communications between the SafeMoon team and the attacker as the parties attempted to settle.

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Crypto lender BlockFi is granted extra time to file Chapter 11 exit plan

BlockFi, a lender of digital assets, was given additional time to submit a bankruptcy exit plan by a New Jersey bankruptcy judge in the United States on April 19.

The cryptocurrency lender filed for bankruptcy in November 2022 and has been reportedly granted a 48-day extension until May 15 to file an exit plan. The crypto firm is exploring a potential sale of company assets or the possibility of getting an outside backer to support a restructuring deal, BlockFi lawyer Joshua Sussberg said in a hearing on April 19.

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Ether hits 11-month high as post-Shapella withdrawals pass 1 million ETH

Over 1 million ETH, worth $2.1 billion, was withdrawn from Ethereum’s Beacon Chain within the first four days of the Shapella hard fork, with Ether reaching over $2,100 for the first time in 11 months.

The 1.03 million ETH withdrawn came from 473,700 withdrawal requests, with April 15 representing the largest withdrawal day at 392,800 ETH, according to data from the Beacon Chain.

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Subway-themed trading bot makes millions using “sandwich” attacks

An anonymous MEV bot operator cashed in well over $1 million this week by executing “sandwich attacks” against buyers and sellers of two new memecoins.

The wallet address, linked to the Ethereum Name Service domain “jaredfromsubway.eth,” made $950,000 from the sandwich attacks on April 18 and profited about $300,000 and $400,000 on April 17 and 19, respectively, according to an April 19 tweet from nonfungible token data platform Sealaunch.

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DeFi market overview

DeFi’s total market value plunged by $4 billion this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bearish week, with most trading in the red. The total value locked in DeFi protocols fell below $50 billion.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.

Binance users get new ETH deposit addresses: Here’s what to do

Binance said retiring old deposit addresses on multiple blockchains is part of its infrastructure upgrade, with the new addresses offering better security and efficiency.

The world’s largest cryptocurrency exchange by trading volume, Binance, is disabling multiple old deposit addresses as part of its infrastructure upgrade.

In an announcement on April 18, Binance said it would retire selected deposit addresses and memos in batches on multiple blockchains, including Ether (ETH), Tron (TRX), BNB (BNB) and Stellar (XLM). The crypto exchange said that the retirement of old addresses is a routine and a part of enhancing security and efficiency for the users.

List of retired deposit addresses on various blockchain networks. Source: Binance

The users of these impacted deposit blockchain addresses will be notified via email, and the exchange strongly encouraged that all impacted users obtain a new address and memo upon receiving the notification. The notification email will include the expiration date for any outdated deposit addresses. When users get a new address, old deposit addresses will become invalid.

To obtain a new deposit address, users must log in to their Binance account and follow the instructions mentioned in their email notification. The migration is scheduled for between April and June 2023.

The crypto exchange also assured that the funds wouldn’t be lost if someone mistakenly sent assets to expired addresses. However, payments made to addresses that have already expired will not be immediately reimbursed. Users must manually credit the deposits from the old address using the “transaction history” page.

Related: CFTC chair says Binance intentionally broke rules concerning futures, commodities

Binance regularly upgrades and maintains its infrastructure from time to time. The exchange recently raised the alarm against 191 high-risk, untrustworthy decentralized applications and fake tokens on its native blockchain network called BNB Chain.

The change in deposit addresses of multiple blockchains, including that of Ethereum, comes just a day before Binance is set to open ETH withdrawal for users. Millions of Ether are now unlocked after the Shapella upgrades on April 12, with major exchanges and custodians having already made arrangements for users to unstake their ETH from the Beacon Chain nearly three years after staking it.

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ETH staking passes withdrawals for the first time since Shapella upgrade

Over 1 million ETH has been withdrawn since the Shapella hard fork on April 12. However, a significant number of addresses have restaked their ETH.

The Ethereum blockchain underwent a successful Shapella upgrade on April 12, allowing validators to withdraw their staked Ether (ETH) from the Beacon Chain after three years. After seeing over 1 million ETH in withdrawals in the first week, the amount of staked ETH has now surpassed the number of ETH being withdrawn for the first time since the Shapella upgrade.

Data from the on-chain analytics firm Nansen suggests that more ETH is currently being staked than withdrawn. As of April 17, the ETH staking volume of 124,000 ETH exceeded the withdrawal volume of 64,800 ETH for the first time. In the last 24 hours, the amount of staked ETH was 94,968 against 27,076 in withdrawals. The first round was primarily partial withdrawals from Lido and old validators. It takes approximately three days to get into the withdrawal queue.

Volume of staked ETH vs withdrawals. Source: Nansen

The Shapella upgrade was projected as a make-or-break situation for the Ethereum blockchain as millions in unlocked ETH posed a risk of mass selling. However, the majority of the validators are restaking their unlocked Ether. Crypto exchange Binance will open withdrawals on April 19.

Related: Ethereum price metrics hint that ETH might not sell off after the Shapella hard fork

Out of the 1 million withdrawn ETH, three addresses restaked a total of 19,844 ETH. Three addresses transferred ETH to centralized exchanges (CEXs) after withdrawal, with 71,444 ETH sent to different exchanges. Other whales did the same, with some sending it to Huobi staking addresses and a few others to CEXs, according to data shared by Lookonchain.

Most early withdrawals are staking rewards, and a few validators, like Kraken, had to exit to comply with a United States Securities and Exchange Commission ruling. Currently, 22,231 validators have signed up for a complete exit out of 574,624, while 910,930 ETH of the 18.6 million staked ETH is slated to be withdrawn.

Another prominent reason for the diminishing withdrawals could be ETH’s price, as the average price of staked ETH is about $2,137.

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Less than 1% of staked ETH estimated to be sold after Shapella: Finance Redefined

The top 100 DeFi tokens surged along with the broader crypto market as the total value locked peaked at a new yearly high of over $54 billion.

Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.

The past week in DeFi was filled with anticipation leading up to the Shapella upgrade on the Ethereum mainnet. The hard fork was successfully completed on April 12, allowing validators to withdraw their staked Ether (ETH) after three years. However, only 253 validators have signed up to fully exit their staked Ether position, with analytics firm Glassnode predicting that less than 1% of the staked ETH will be withdrawn.

Amid all the rejoicing post-Shapella upgrade, an Ethereum researcher has revealed that staking Ether could become a privacy concern, as he had “internally” discovered that staking Ether shows a user’s IP address information.

A hacker minted 1 quadrillion Yearn Tether (yUSDT) after exploiting an old Yearn.finance contract, and then swapped the yUSDT to other stablecoins, allowing them to take hold of $11.6 million worth of stablecoins.

DeFi-based financial inclusion serves to increase liquidity and earning opportunities for African micro-entrepreneurs through Fonbnk’s partnership with Tanda.

The top 100 DeFi tokens had another bullish week, thanks to a late surge in the crypto market after Ethereum’s much-awaited upgrade. Most DeFi tokens traded in green along with the rest of the market.

Less than 1% of staked ETH estimated to be sold after Shanghai upgrade: Glassnode

Just 170,000 Ether of the 18.1 million ETH staked on the Beacon Chain will be unlocked within the first week of the Shanghai hard fork being executed on Ethereum, Glassnode has predicted.

The figure comprises 100,000 Ether ($190 million) worth of staking rewards and 70,000 ETH worth of staked Ether ($133 million), the on-chain intelligence platform predicted in its April 11 report.

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Ethereum researcher says staking reveals IP address, sparking privacy concerns

A researcher at the Ethereum Foundation (EF) showed that the IP addresses of ETH stakers are monitored as part of a broader set of metadata, causing the cryptocurrency community to flag Ethereum for privacy concerns.

In an April 12 interview on the crypto podcast Bankless, EF researcher Justin Drake revealed that he learned this information “internally.” The metadata Drake referred to tracks a wide range of information.

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Web3 economy to gain more traction in Africa through DeFi-based financial inclusion

Web3 in Africa began with cryptocurrency, with blockchain technology bringing a lot of transformation regarding transparency and people’s control over their finances. The Web3 economy in Africa continues gaining traction with decentralized finance-based financial inclusion.

Fonbnk, the Web3 on-ramp that allows Africans to obtain cryptocurrency assets by exchanging their airtime credits, has partnered with Tanda, a merchant network platform in East Africa, to launch an airtime trading marketplace across Tanda’s network of agents.

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Hacker mints 1 quadrillion yUSDT after exploiting old Yearn.finance contract

Blockchain security firm PeckShield recently detected a hack that allowed the attacker to mint over 1 quadrillion yUSDT from $10,000 in the latest DeFi exploit.

According to the security firm, the hacker then swapped the yUSDT to other stablecoins, allowing them to take hold of $11.6 million worth of the tokens. This includes 61,000 Pax Dollar (USDP), 1.5 million TrueUSD (TUSD), 1.79 million Binance USD (BUSD), 1.2 million Tether (USDT), 2.58 million USD Coin (USDC) and 3 million Dai (DAI).

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DeFi market overview

Analytical data reveals DeFi’s total market value crossed $54 billion this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most of the tokens trading in green, barring a few.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education in this dynamically advancing space.

Ether staking withdrawals: Crypto exchanges set calendar for unstaking

A majority of the validators are withdrawing their staking rewards rather than the whole 32 staked ETH.

Ethereum mainnet successfully completed the Shapella upgrade on April 12, meaning that Ethereum validators can finally withdraw their staked Ether on the Beacon Chain.

A total of 126,955.07 ETH were withdrawn by validators at the time of writing. Presently, 248,043 out of the 559,549 active validators, or about 44% of them, have the ability to request a partial or full withdrawal. The majority of withdrawals currently vary between 2.8 to 3.2 ETH (ETH), indicating the majority of the validators are only withdrawing their staking rewards.

Total staked ETH withdrawal. Source: beaconcha.in

The average price of staked ETH is $3,149 and it could be another reason why validators are not withdrawing the whole amount. The ETH price is currently trading just under $2,000 with the price acting as key resistance.

Staked ETH data and exchange holdings. Source: Nansen

Major crypto exchanges have announced their support for the ETH unstaking with several exchanges already processing withdrawal requests. Coinbase, the world’s first publicly listed crypto exchange announced that ETH unstaking is now live on their platform.

BitGo chief operating officer Chen Fang took to Twitter to announce that the custodian has upgraded to Shapella successfully, and ETH withdrawals are now live on the platform.

Kraken, on the other hand, started withdrawing validators for their United States customers on April 11 and began processing withdrawals of ETH after the completion of the Shapella upgrade. The early withdrawal of validators by the exchange is caused by the U.S. Securities and Exchange Commission action brought against Kraken’s Ethereum staking product back in February.

Related: Upcoming Shapella upgrade fuels liquid staking growth — AMA with Swell

Kraken Australia Managing Director Jonathon Miller told Cointelegraph that even though such a high quantity of ETH unstaking might cause some price volatility it will bring users to the ecosystem in the long run. He explained:

“Whilst this unlocking event may create conditions for an exodus from the staking protocol, the ability to freely stake and unstake (in accordance with bonding periods specified by the protocol) could equally attract many ETH holders. The move to unstaking could see a massive movement of assets into Ethereum staking pools.”

Binance, the leading crypto exchange by trading volume, said it would support the Shappela upgrade and start the withdrawal processing requests starting from April 19. The crypto exchange also added that the withdrawal request could take up to 15 days to process due to processing limitations.

Bitfinex, one of the leading crypto exchanges, congratulated the Ethereum community on the successful upgrade and said the ETH withdrawal details will be shared soon.

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How will the Shanghai upgrade impact ETH price? Expert explains

While it may cause downside pressure in the short run, the Shanghai upgrade will be highly bullish for Ether’s price in the mid-to-long term, according to Vivek Raman.

While it may have some short-term negative impact on the price of Ether (ETH), the upcoming Shanghai upgrade will be highly bullish for Ethereum’s native token, as it will attract more capital to staking and increase the network’s security, according to Ethereum researcher Vivek Raman. 

The Shanghai upgrade, scheduled for April 12, will allow network validators to withdraw funds that have been locked to secure the network since December 2020. The upgrade will complete the network’s transition to a proof-of-stake system, which started in October 2022 with the Merge.

Around 18 million ETH will be available for withdrawal following Shanghai. According to Raman, that may lead to some selling pressure on ETH’s price in the short term.

However, in the long run, the ability to unstake Ether will “de-risk the ETH investment in a tremendous way,” he pointed out. In particular, institutional investors that couldn’t get involved earlier in staking will feel more comfortable once ETH can be unstaked. More capital entering ETH staking will improve the Ethereum network in the long run.

“The more native proof-of-stake asset that’s staked, the higher the cost to attack the chain,” Raman pointed out.

To find out more about the implications of the upcoming Ethereum upgrade, check out the full interview on our YouTube channel and don’t forget to subscribe!

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What will be the outcome of the Ethereum Shanghai upgrade?

Join us as we discuss the potential outcomes of the upcoming Ethereum Shanghai upgrade and other important developments in DeFi.

In this week’s episode of Market Talks, Cointelegraph welcomes Justin Bram, co-founder and CEO of Astaria — which allows users to put up their nonfungible tokens (NFTs) as collateral to earn instant liquidity. Bram also has his own YouTube channel with over 30,000 subscribers.

We kick things off by getting Bram’s opinion on the most exciting thing happening in decentralized finance (DeFi) right now and follow it up by discussing the most important thing happening in DeFi.

We then get into Ethereum layer-2 protocols like Arbitrum and whether Bram is bullish on them or whether he has his eye set on something else.

With the next big Ethereum upgrade just around the corner, we ask Bram what his perspective is on the Shanghai upgrade and the potential of liquid staking derivatives. Is ut going to be as big as everyone hopes and thinks it will be? Does the unlocking of Ether (ETH) represent the offering of some new innovation in the crypto and DeFi space?

By the end of the chat with Bram, we hope the audience will have gotten a better understanding of the most exciting and important developments in DeFi, the potential outcomes of the Ethereum Shanghai unlocks, and the longer-term impact of this on the liquid staking derivatives space, and also the development within the Ethereum layer-2 platform.

We cover all this and more, so make sure to stay tuned until the end. Market Talks airs every Thursday. Each week, it features interviews with some of the most influential and inspiring people from the crypto and blockchain industry. So, head on over to Cointelegraph Markets and Research’s YouTube page, and smash those like and subscribe buttons for all our future videos and updates.

LayerZero raises $120M to expand cross-chain messaging efforts

The new funds will be used to increase headcount and expand the cross-chain messaging protocol’s presence in the Asia-Pacific region.

Cross-chain messaging protocol developer LayerZero Labs has raised another $120 million, according to an April 4 announcement. The company plans to use the capital to increase its headcount and expand its reach into the Asia-Pacific region. The company had previously raised $135 million in March 2022.

LayerZero Labs is best known for its cross-chain messaging protocol, LayerZero, which is often used to create asset bridges between blockchain networks. It is also a supporter of the Stargate multichain bridge.

With the completion of this fundraising round, the company now has a $3 billion valuation. Over 33 investors participated in the latest funding round, including Sequoia Capital, Andreessen Horowitz, BOND, Circle Ventures, Christie’s, OpenSea Ventures and Samsung Next.

Related: Uniswap DAO debate shows devs still struggle to secure cross-chain bridges

Ryan Zarick, co-founder and chief technology officer of LayerZero Labs, said the new fundraise will help to create a multichain environment where applications can make the best use of each network’s unique benefits:

“Imagine a future where a single user-facing application can harness the speed of Solana, the security of Ethereum, and the cheap file storage of Arweave, while also being fully abstracted to the user.”

He continued, “This is our vision, made possible by the LayerZero protocol that seamlessly connects all blockchains and enables chain-agnostic applications to be built across various blockchains to create a best-in-class user experience. The days of choosing one chain to build on are over; the future is omnichain applications.”

The issue of securing cross-chain messages has become acute in recent years, as more than $3 billion was stolen from blockchain bridges in 2022, according to a report from Chainanalysis. LayerZero has attempted to solve this problem by using a relayer and oracle to secure messages, where a message is only confirmed if both the relayer and oracle agree that it is valid.

On January 31, LayerZero received 37.58% of the vote to become Uniswap’s bridge protocol for cross-chain governance between Ethereum and BNB Chain, coming in second behind Wormhole. On March 30, Gnosis announced that LayerZero would integrate with its multi-bridge platform, Hashi, to further increase the security of blockchain bridges.

73.3% of Q1 rug pulls happened on BNB Chain: Immunefi

Rug pulls and other frauds made up a small percentage of losses compared to hacks and exploits, the report stated.

BNB Chain was the king of rug pulls in the first quarter of 2023, with over 73.3% of such scams in the entire crypto ecosystem happening on the network, according to an April 4 report from blockchain security firm Immunefi.

The report, titled “Crypto Losses in Q1 2023,” investigated a variety of crypto hacks and scams in the first quarter of the year. It found that Ethereum and BNB Chain were the two largest targets for hackers and scammers, with 68.8% of total losses from these networks combined. BNB Chain, in particular, made up 41.3% of total losses from hacks and scams.

One type of scam, in particular, reigned supreme on BNB Chain: rug pulls, a type of scam where developers raise funds and then close up shop without delivering a product or service. Immunefi stated that 73.3% of all rug pulls in the crypto ecosystem happened on BNB Chain in the first quarter.

Related: Uniswap launches on BNB Chain ecosystem to drive growth and liquidity

Immunefi tech Lead Adrian Hetman speculated that the large number of rug pulls on the chain may be due to a culture that promotes forking open-source code:

“BNB Chain still has a serious issue with developers using forked code. Its community lacks a security-first approach and attracts many users looking for a quick way to earn money. That’s why we continue to see the biggest number of exploits and rug pulls in this ecosystem.”

Despite the prevalence of these scams on BNB Chain, Immunefi also stated that rug pulls and other frauds are a much smaller problem in the crypto community than hacks or exploits. Hacks were the “predominant cause” of losses in Q1 2023, the report said, whereas all frauds combined (including rug pulls and other scams) made up only 4.3% of total losses.

The first quarter of 2023 has seen spectacular hacks and exploits, draining millions of dollars from decentralized finance (DeFi) protocols. On Feb. 1, the DeFi lending app BonqDAO was the victim of an oracle hack, losing $120 million in crypto. On Feb. 17, decentralized exchange aggregator Dexible was hacked for over $2 million. And on March 13, Euler lost over $195 million of crypto in the largest DeFi attack of the quarter.

Satellite orbiting Earth participates in the Ethereum KZG ceremony

The blockchain-powered satellite Cryptosat will be the contributor of the thousands that have already participated in the Ethereum KZG ceremony to do so from outer space.

The Ethereum KZG ceremony, which aims to provide a cryptographic foundation for Ethereum scaling, has already had over 83,000 contributions of randomness from users all over the world. Now it’s receiving a contributor from outer space. 

Cryptosat, a blockchain-powered satellite orbiting Earth, announced its contribution of entropy from space on April 4 at 6 a.m. UTC. The contribution will be deployed from the Crypto2 satellite.

According to the announcement from Cryptosat, the satellite orbits Earth every 90 minutes following a remote course 550 km above ground, which makes it difficult for outside actors to gain access during the KZG contribution.

Yan Michalevsky, the co-founder of Cryptosat, explained to Cointelegraph that the ceremony needs parties that can generate “cryptographic parameters” that don’t leak what is called “toxic waste,” or intermediate computation artifacts that are discarded and inaccessible after being generated.

Michalevsky continued that if leaked, this “toxic waste” could compromise “the integrity of the cryptographic scheme” on which the next version of Ethereum is based.

“This is why generating those parameters in a completely physically isolated environment from which data cannot be extracted has a lot of merit.”

Cryptosat has a Verifiable Random Beacon service, which will generate entropy for its contribution. Beacons from this service are signed by the satellite itself and can be verified using the public key of Crypto2, which was also generated in space.

“Apart from using the API to it, we don’t access the internals of the satellite or the data that is generated as part of the intermediate steps, and is kept secret on the satellite.”

The commitment of entropy from Cryptostat’s space satellite will be viewable in real-time via a dashboard monitoring the satellite’s trajectory and latest status.

Related: Ethereum bulls ignore regulatory action against exchanges by preparing for the Shapella hard fork

Cryptosat is one of the thousands to participate in supplying randomness to the KZG ceremony, as requested by the Ethereum Foundation to strengthen security. 

The satellite, Crypto2, was launched into space on Jan. 3 aboard the SpaceX Falcon 9. It was the successor to the first satellite launch of Crypto1 back in May. According to Cryptosat, the second satellite has 30x the computing power of the first one.

Previously the company said that blockchain-powered satellites are part of the effort to make outer space a “new battleground in the quest for bulletproof cryptography.”

The Ethereum Shanghai upgrade to the mainnet, for which the entropy by Crypto2 is generated, is scheduled for April 12.

Magazine: Blockchain fail-safes in space: SpaceChain, Blockstream and Cryptosat