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Crypto && Coffee 012 | Lending Protocols Exploited

Technology Recap: 


  • btcdeb (Bitcoin Script Debugger) by Kalle Alm now inherently supports miniscript. The tool now shows the miniscript tree alongside the script as you debug. 
  • Casa’s Jameson Lopp shared his recap from this year’s Satoshi Roundtable VI.  


  • ETHDenver took place last week, bringing developers from around the world to work on building the next phase of Ethereum and DApps. 
  • On February 15, 2020DeFi lending protocol bZx was exploited. The exploit went down as follows: 
      • Initiated with a borrowing of 10K ETH from dYdX 
      • Used it to open a BTC short on Fulcrum and borrow 100 BTC to dump from Compound 
      • Then close the short – paying back dYdX and getting a $350K profit. 
  • After the bZx exploit, bZx announced they use Kyber as an oracle. Two days after – an attacker manipulated sUSD via Kyber as follows: 
      • Taking out a flash loan of 7500 ETH 
      • Trading 3517 ETH on Synthetix for $940K sUSD (at a price close to $1) 
      • Using 900 ETH to market buy sUSD on Kyber and Uniswap to push the price to more than $2.  
      • Borrow 6796 ETH on bZx by using sUSD as collateral 
      • Use the borrowed ETH and remaining ETH balance to repay the flash loan and net 2379 ETH in profit.  
      • bZx ETH pool lost about $1.8M while the sUSD pool gained $1.1M. The attacker made roughly $640K. 

Other Chains:  

  • Kyber Network saw its highest unique number of addresses, highest firsttime addresses, highest ETH and USD volumes, and highest total number of trades in January 2020. DeFi DApps saw their volumes double from $7.8M to $15.5M, although Fulcrum’s growth accounts for a large portion of it. Read Kyber Network’s full Ecosystem Report here. 
  • Ethereumbased Opyn, which is built on the Convexity Protocol, launched its insurance platform last week on Ethereum mainnet 
  • On February 12, 2020, IOTA started investigating stolen funds on mainnet. The Coordinator was halted, and they asked to keep the Trinity wallet closed for now. 
  • Hedera Hashgraph’s HBAR price rose about five cents after they announced Google Cloud (GCP) would be joining their governing council.  
  • NuCypher released the Trail of Bits smart contract audit for their WorkLock contract, aimed at being the distribution mechanism for tokens.  
  • Electric Coin Company and the Zcash Foundation have approved a modified ZIP 1014 which funds Zcash development for another 4 years starting at NU4 activation.  
  • Enjin launched their game development platform on Ethereum. Full details here. 
  • LND 3957 is under development in order tallow Atomic Multipath Payments (AMP). AMP is harder for routing nodes to distinguish from normal single-part payments and can guarantee that the receiver either claims all parts of the payment or none of it.  

Mainstream Recap: 

  • HuobiGlobal added ZEC/HUSD spot trading pair on February 12, 2020.  
  • Treasury Secretary Steven Mnuchin stated on February 12, 2020, that FinCEN is preparing to unveil new regulations around crypto. Full video here. 
  • Coinbase is rolling out margin trading for eligible Coinbase Pro customers. Check out the full article for availability.  
  • Mastercard, Ripple XpringBinance X, Neo, KuCoin, and Matic Network are among the founding members of the working group Blockchain Education Alliance, which is being run by Blockchain accelerator MouseBelt. Full details here. 
  • Federal Reserve Chairman Jerome Powell hinted at how the US might position a future digital dollar, stating, “A ledger where you know everybody’s payments is not something that would be particularly attractive in the context of the US. 
  • Cardano Blockchain’s lead development firm, IOHK, has established a research center at the University of Wyoming.  
  • SEC Commissioner Hester Peirce wants to give token projects up to three years to decentralize their networks before digging into security laws. 

This Week’s Cup of Coffee: 

This week, we are diving into Four Barrel Coffee from San Francisco. Changing it up from our normal roasts, we are going with Friendo Blendo Espresso, a combincation of Colombian, Ethiopian, and Peruvian coffees yielding a nice citrus flavor. With bold hints of fresh berry, citrus, and toffee, this choice makes for a solid espresso by itself. 


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