DeFi Bulletin: TVL Falls Again, Sturdy Finance Loses $770,000 in Attack

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

Key metrics of the DeFi segment

The total value locked (TVL) in DeFi protocols fell to $42.73 billion. Led by Lido with $12.7 billion, second and third place go to MakerDAO ($5.71 billion) and AAVE ($5.14 billion), respectively.

The TVL in Ethereum applications fell to $25.13 billion. The trading volume on decentralized exchanges (DEX) over the last 30 days stood at $58.3 billion.

Uniswap continues to dominate the non-custodial exchange market — accounting for 53.5% of total turnover. The second DEX by trading volume is Curve (15.6%), the third is PancakeSwap (15.4%).

Coinbase tells the SEC: DEX cannot be regulated as centralized exchanges

Representatives of Coinbase sent the U.S. Securities and Exchange Commission (SEC) a letter stating the impossibility of regulating DEX as centralized exchanges.

Chief legal officer Paul Grewal said that the agency’s powers do not include the authority to ban [decentralized platforms] in the absence of clear congressional authorization.”

According to him, last year the SEC attempted to push through a definition of DEX “without public notice.”

“Truly decentralized systems do exist, and there is no single organisation that can be responsible for compliance. The proposed rule as applied to DEX would be an impossible requirement”, wrote Grewal.

According to the lawyer, the Commission “has not conducted a real economic analysis” of the industry and instead “promotes its political preferences”.

Sturdy Finance loses about $770,000 in attack

The lending DeFi protocol Sturdy Finance was the victim of an attack that led to the loss of ~442 ETH. The team confirmed the incident.

According to BlockSec experts, an unknown actor exploited a re-entry bug on Balancer and manipulated the price oracle to change the price of B-stETH-STABLE.

Sturdy Finance proposed in an on-chain message to the hacker a bounty of $100,000 for returning the stolen funds.

If the hacker responds positively, the project team will not press charges. Founder Sam Forman confirmed the information about the proposed reward on Twitter.

The Graph to move to Arbitrum

The Graph, the decentralized data-indexing protocol, announced the transition to the final stage of deploying its Layer-2 network Arbitrum. The move aims to boost scalability and reduce transaction costs.

Community members voted in favour of the initiative. It aligns with the aim of expanding the capabilities to operate in the network and reducing costs.

The process began in 2022 with the initial deployment as the first phase. In the second phase, protocol rewards on L2 were introduced. In the third phase, currently underway, a full transition to Arbitrum will be implemented.

Users of The Graph will be able to migrate to Arbitrum across all products. Protocol rewards will gradually move from Ethereum and will be fully operational in the L2 solution. Core Graph developers are actively refining tools to facilitate this transition.

According to the team, the transition will allow delegators to delegate the utility token more efficiently thanks to lower transaction costs. Indexers will be able to claim rewards in GRT, with gas fees after the transition reduced by up to 300x.

Also on ForkLog:

• The crypto bot earned $3 after securing a $200 million flash loan.
• The founder of Curve Finance increased its deposit on Aave to $187 million.
• 1inch DAO will allocate $2 million to produce a hardware wallet.