DeFi Digest: TVL Falls Again as Ankr DeFi Protocol Is Hacked

The decentralized finance (DeFi) sector continues to attract heightened attention from cryptocurrency investors. ForkLog has compiled the most important events and news from recent weeks in this digest.

Key metrics of the DeFi segment

The total value locked (TVL) in DeFi protocols fell to $41.8 billion. The leader is MakerDAO with $6.68 billion, with Lido ($6.19 billion) and AAVE ($3.89 billion) in second and third place, respectively.

TVL in Ethereum applications fell to $24.43 billion. Over the last 30 days the figure declined by 21% (the value on November 3 was $31.04 billion).

Trading volume on decentralised exchanges (DEX) over the last 30 days stood at $67.6 billion.

Uniswap continues to dominate the non-custodial exchange market — accounting for 55.6% of total trading volume. The second DEX by turnover is Curve (19.9%), the third is DODO (13.5%).

DeFi Protocol Ankr Hacked as aBNBc Price Collapses to Zero

Attackers attacked the Ankr DeFi protocol and minted a large amount of aBNBc tokens. The price of the staking-used synthetic asset collapsed to zero.

The project team confirmed the incident and reassured users that their funds are safe. It promised to reissue the aBNBc and compensate losses based on a snapshot of accounts.

According to PeckShield, the hacker earned about $15 million by borrowing assets in the stablecoin HAY as collateral via Helio Protocol against aBNBc. The price of the dollar-pegged stablecoin collapsed by 61% at the moment.

Experts Lookonchain determined that the attacker obtained about 4 million USDC and 5,000 BNB through exchanges. He swapped the latter mainly for Centre’s stablecoin, and sent 900 BNB to the Tornado Cash mixer.

Binance said the hack did not affect platform users and their funds are safe.

Later PeckShield noted that another address was used to extract profits during the hack. Its owner transferred about 3.5 million BUSD and about 1.63 million USDC to Binance.

Founder and head of the platform Changpeng Zhao confirmed that the team is monitoring the situation. The exchange blocked the hacker’s assets worth $5 million, he did not specify which assets.

Aave and Compound paused lending markets

The DeFi protocol Aave temporarily froze lending markets for 17 tokens, citing asset-related risks. The proposal received 100% community support.

The list includes tokens from several major DeFi protocols such as MakerDAO or Curve. Users lost the ability to deposit these assets for lending and to borrow on the Aave V2 platform.

A similar decision for 10 tokens was taken by the Compound protocol.

Bank of England flags risks in the DeFi sector

Decentralised protocols still do not provide an effective way to manage risks, said Jon Cunliffe, the Bank of England’s deputy governor.

«From the perspective of the Financial Stability and Regulator, I am not yet convinced that the risks inherent to finance can be effectively managed in this way», the official said.

He compared DeFi protocols to autonomous vehicles. In his view, the latter “are only as good as the rules, software and sensors that govern their operation.”

At the same time, Cunliffe questioned the degree of decentralisation of the projects:

«Behind these protocols are usually firms and vested interests that profit from their activities. Moreover, it is often unclear who actually controls the governance of the protocols».

The official also pointed to the need for robust consumer-protection measures following the FTX collapse.

In his view, one of the crisis catalysts could have been the exchange’s utility token FTT, which “had no intrinsic value” and “should not have been accepted as collateral for loans and margin payments.”

Also on ForkLog:

• 1inch Network implemented protection for users against “sandwich attacks.”
• The DeFi project Ardana built on Cardano announced a suspension of development.

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