The 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 value of total value locked (TVL) in DeFi protocols rose to $44.6 billion. Lido led with $7.59 billion, with MakerDAO ($6.96 billion) and AAVE ($4.50 billion) holding the second and third spots, respectively.
TVL in Ethereum applications rose to $26.81 billion. Over the last 30 days the figure rose by 8% (as of December 14 it was $24.89 billion).
Trading volume on decentralized exchanges (DEX) over the last 30 days amounted to $30 billion.
Uniswap continues to dominate the non-custodial exchange market — accounting for 65.5% of total trading volume. The second DEX by volume is Curve (17.4%), the third is DODO (5.1%).
Lido Finance Token Rises on Shanghai Hard Fork Announcement
Over the past week, the governance token of the liquid staking platform Lido Finance (LDO) rose by 50%. As of writing, LDO trades at around $2.20.
On January 5, Ethereum developers said the Shanghai hard fork would be activated on the testnet in February and on the mainnet in March. The update includes EIP-4895, which will allow withdrawals of ETH from the Beacon Chain staking contract.
Lido Finance enables users to earn on staking of tokens such as Ethereum, Polygon and Polkadot. The most popular asset on the service is Ethereum.
In exchange for assets locked in the Beacon Chain, users receive stETH tokens, which can be used in other DeFi protocols. Lido Finance is popular among retail investors who do not have enough capital (32 ETH) or the technical know-how to operate as validators.
1inch Network Team Activates Fusion Update
On December 25, the team behind the liquidity aggregator from decentralized exchanges 1inch Network activated a major Fusion upgrade. The developers integrated the 1inch Swap Engine — a combination of technologies designed to make swaps via the aggregator more cost-effective and secure.
The system supports Fusion mode. The latter allows placing orders with a set price and time window without paying network fees. The upgrade protects users from potential MEV attacks.
The update also changed the governance model and tokenomics of 1inch Network. In particular, users can now stake assets for a period from one month to two years.
Stakers can earn Unicorn Power tokens. The latter enable involvement in the protocol’s governance mechanism or delegation in exchange for rewards.
The team unveiled an incentive program to reimburse users’ costs for placing orders in Fusion mode. Under the initiative, the 1inch Foundation will distribute 10 million 1INCH.
Defrost Finance Hack Exceeds $12 Million. Team Says Funds Returned
On December 23, the Defrost Finance team announced a hack. PeckShield warned of a possible rug-pull scheme. Losses exceeded $12 million.
Initially, the project’s developers reported an attack on the V2 protocol using a ‘flash loan’.
According to PeckShield, the hacker exploited the lack of re-entrancy protection. By manipulating the price in the LSWUSDC liquidity pool, his proceeds amounted to about $173,000.
According to Defrost Finance, the attacker conducted a second attack on the V1 protocol using the obtained owner key. The team did not disclose the amount of damage; PeckShield estimated it at more than $12 million.
Experts, based on user reports, stated a possible rug-pull scheme.
On December 26, the Defrost Finance team said that the stolen funds had been returned and the project was preparing to distribute them among users.
Also on ForkLog:
- CFTC filed a lawsuit against the attacker in the Mango Markets DeFi project.
- Chainalysis: the popularity of DeFi in North America reduced Bitcoin’s dominance.
- Ondo Finance launched tokenized US Treasuries.
- 1inch announced a partnership with Beefy.
- Mercurial rebranded to distance itself from FTX.
Follow ForkLog’s Bitcoin news in our Telegram — cryptocurrency news, prices and analytics.