April 21, 2024

Multichain inside job? And SOL surges 80% in a month: Finance Redefined

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The exploited Multichain bridge briefly opened on Nov. 1, and a trader managed to use this opportunity to buy debugged assets at a discount, allowing them to make more than $1.5 million in profits.

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.

A trader managed to exploit the brief opening of the Multichain cross-chain bridge, which was frozen since its exploit in July 2023, allowing the trader to turn $280,000 worth of Fantom’s (FTM) tokens into $1.9 million worth of different assets.

In other news, Solana’s (SOL) token has surged 80% in a month, and Avalanche is set to shut down its Etherscan-powered blockchain explorer tool amid a fee controversy. A new bridged token from LayerZero has drawn criticism from nine protocols throughout the Ethereum ecosystem, claiming that it limits the freedom of token issuers.

The top 100 DeFi tokens continue their bullish momentum from the last week, with most of the tokens posting positive returns on the weekly charts.

Trader exploits Multichain opening to turn $280,000 to $1.9 million; community suspects insider job

A wallet address turned nearly 1.9 million FTM worth $280,000 to $1.9 million within hours of exploiting the long-frozen Multichain bridge opening momentarily, leading to insider job speculations among the crypto community.

The Multichain bridge, frozen since its exploit in July 2023, opened briefly and closed again on Nov. 1. The trader seized the opportunity to make millions of dollars in profits.

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Solana gains 80% in a month as Firedancer goes live on testnet

SOL has posted 30-day gains of nearly 81% and has rallied over 30% in the past week amid the testnet launch of the blockchain’s long-awaited scaling solution, Firedancer.

SOL reached over $41 on Nov. 2, touching highs it hasn’t seen since August 2022, Cointelegraph Markets Pro data shows. Long touted as an “Ethereum killer,” SOL has vastly outperformed its rival, Ether (ETH), which posted under 11% gains in the past month.

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Avalanche blockchain explorer to shut down as Etherscan fees draw controversy

SnowTrace, a popular blockchain explorer tool for Avalanche, will shut down its website — powered by Etherscan’s explorer-as-a-service (EaaS) toolkit — on Nov. 30. The SnowTrace team clarified that only its Etherscan-powered explorer will be shut down.

According to the Oct. 30 announcement, Snowtrace users are required to save their backup information, such as private name tags and contact verification details, before Nov. 30. While the team did not explicitly state the reason for shutting down the explorer, some have pointed to Etherscan’s service fees for its EaaS toolkit. Mikko Ohtama, co-founder of Trading Strategy, claims that an annual subscription to EaaS can cost between $1 million and $2 million per year.

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Nine protocols criticize LayerZero’s wstETH token, claiming it’s “proprietary”

A new bridged token from the cross-chain protocol LayerZero is drawing criticism from nine protocols throughout the Ethereum ecosystem. A joint statement from Connext, Chainsafe, Sygma, LiFi, Socket, Hashi, Across, Celer and Router on Oct. 27 called the token’s standard “a vendor-locked proprietary standard,” claiming that it limits the freedom of token issuers.

The protocols claimed in their joint statement that LayerZero’s new token is “a proprietary representation of wstETH to Avalanche, BNB Chain, and Scroll without support from the Lido DAO [decentralized autonomous organization],” which is created by “provider-specific systems […] fundamentally owned by the bridges that implement them.” As a result, it creates “systemic risks for projects that can be tough to quantify,” they stated. The protocols advocated for the use of the xERC-20 token standard for bridging stETH instead of using LayerZero’s new token.

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DeFi market overview

Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most tokens trading in green on the weekly charts. The total value locked into DeFi protocols jumped to $49.46 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.

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