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Crypto && Coffee 135

Technology Recap:


  • Lightning Network developers posted about the ongoing work towards splicing. Splicing would allow some funds in an off-chain Lightning channel to be spent on-chain via a “splice-out” or for on-chain funds to be added to an off-chain channel via a “splice-in”. 

  • BTCPay Server adds proof-of-payment on the receipt page for each payment. For on-chain payments, the proof is the transaction ID. For Lightning payments, the proof is the preimage to the HTLC (Hash Time Locked Contract). 

  • Maxim Orlovsky posted to the Bitcoin-Dev mailing list an update on the state of RGB development. RGB is a protocol that uses Bitcoin transactions to perform state updates in off-chain smart contracts


  • On April 12th, 2023, Ethereum successfully passed the Shapella upgrade which included upgrades to both the Execution Layer and Consensus Layer. With this, validators can now withdraw their staking rewards. One can view withdrawals on Etherscan here

  • The Prysm client team noticed a critical bug following the Shapella upgrade and quickly issued a critical fix for when validators interact with mev-boost. 

  • Prysm shares a post-mortem on the mainnet incident. 

  • Benjamin Chodroff notes that it took 83 epochs to change all 2,133 validators using CLWP EIP-4736. CLWP is Consensus-Layer Withdrawal Protection which outlines on-chain evidence and signed messages to create a social consensus to protect validators against attacks on mnemonic phrases. 

  • Tim Beiko shares a high-level recap of the latest All-Core Devs Call. 

Other Chains: 

  • a16z Crypto introduces Magi, a new rollup client for Optimism.  

  • Guillaume Ballet shares the various options and thoughts around the transition from Merkle Patricia trees to Verkle trees. This would be a fundamental structure update to Ethereum. 

  • Cashmere Labs unveils the public testnet launch for the initial phase of the CashmereLabs, featuring MEV Protected cross-chain swaps on LayerZero Labs. 

  • StarkNet shares their goals for the upcoming months and year with a focus on boosting performance and a seamless UX. 

  • Optimism shares op-erigon, an alternate execution client utilizing the open-source OP Stack which is now available to test on OP Goerli network. 

  • Waymont is introduced as the first crypto-native wealth platform. 

  • Developers share a Superchain Token List which aims to simplify the process of bridging tokens between Ethereum and OP Chains. 

Hacks | Vulnerabilities | Exploits:

  • Forta Network noticed a spike in critical alerts across the BSC network since March 24th, 2023. This spike is attributed to a ~$2.1M scam token scheme.

  • On April 2nd, 2023 multiple MEV (Miner Extractable Value) bots on Ethereum lost ~$25M due to an exploit by a malicious proposer which baited bots through a crafted transaction and block which subsequently drained them.

  • On April 4th, 2023, Sentiment lost ~$1M due to a reentrancy exploit on Arbitrum. The attacker ended up returning 90% of the funds following an on-chain negotiation through embedded messages.

  • On April 9th, 2023, GDAC (Global Digital Asset & Currency) – a South Korean cryptocurrency exchange, lost ~$13M across Bitcoin, Ethereum, and Wemix networks due to a hot wallet compromise. 

  • On April 9th, 2023, SushiSwap suffered an exploit through a function parameter injection vulnerability that resulted in ~$3.3M being stolen on Ethereum. Following the attack people noted to revoke approval from addresses across Polygon, Arbitrum, BSC, Avalanche, and more.  

  • On April 11th, 2023, Paribus lost $100K on Ethereum due to a known reentrancy vulnerability from an old Compound fork. 

  • On April 11th, 2023, Metapoint lost $920K on BSC due to an access control vulnerability

  • On April 13th, 2023 Yearn Finance lost $11.6M on Ethereum due to a misconfiguration in a deprecated smart contract which was still holding funds.

  • On April 14th, 2023 Bitrue Exchange lost ~$23M due to a hot wallet compromise. The compromise affected the following currencies: ETH, QNT, GALA, SHIB, HOT, and MATIC.  

  • On April 14th, 2023, ConsenSys shared information pertaining to a leak of Metamask support tickets. 

  • On April 15th, 2023, Hundred Finance lost ~$7M on Optimism due to a price oracle manipulation to empty protocols built off of Compound smart contracts.

Mainstream Recap:

  • The European Union Parliament passed the Markets in Crypto Act (MiCA) on April 20th, 2023. 

  • Coinbase files petition to compel the U.S. Securities and Exchange Commission to respond to a months-old rulemaking petition.

  • The U.S. DOJ charges a North Korean Foreign Trade Bank (FTB) representative for his role in money laundering conspiracies designed to generate revenue for the Democratic People’s Republic of Korea, through the use of crypto. 

  • CoinCenter releases an article following the Treasury Department’s “DeFi Illicit Finance Risk Assessment”

  • CNN discloses the inside story of an international sting operation to catch North Korean crypto hackers. 

  • Unchained reports that FTX made little use of cold storage wallets. 

  • Thetanuts Finance has completed a $17M institutional funding round led by Polychain, HyperChain Capital, and Magnus Capital. 

  • CoinDesk reports that TransUnion will deliver credit scores for crypto lending. 

This Week’s Cup of Coffee:

This week, we are headed to Marin, CA for a cup of Thailand Wiang Pa Pao Single Origin from Equator Coffees. This single origin espresso yields bright flavors of berries, pear, vanilla, and hints of cashew. Sip up and enjoy as we move into summer!!

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