Welcome to Finance Redefined! This newsletter is designed to keep you up to date with the latest developments in the world of decentralized finance (DeFi). Every week, you’ll receive your weekly dose of essential insights.
On June 15th, a discrepancy in Curve Finance’s 3pool caused a scare of Tether (USDT) depegging as its presence in the pool increased beyond 70%, resulting in a high rate of selling. The Chief Technology Officer of Tether deemed these market conditions as stress tests for the stablecoin and dismissed the “FUD” (Fear, Uncertainty and Doubt) surrounding the depeg.
In other news, a crypto trading bot that was programmed to execute arbitrage trades borrowed two hundred million dollars and made a profit of just over three dollars.
On June 13, Uniswap, the decentralized exchange protocol, released its version 4 code, thereby paving the way for new liquidity pools.
The DeFi lending platform Sturdy Finance had $800,000 taken from it, prompting the protocol’s team to provide a $100,000 bounty for the return of the funds and the reopening of its stablecoin market on June 16. In a separate incident, the Hashflow protocol was drained of $600,000; however, Hashflow assured its users that they would be fully compensated.
Most of the top 100 DeFi tokens experienced a bearish week, with the majority of digital currencies trading at their lowest value in three months.
Curve pool imbalance triggers USDT depeg concerns, Tether CTO calls it FUD
On June 15, USDT slightly departed from its peg to the US dollar as a consequence of an imbalance in Curve’s 3pool. The rate of USDT dropped by 0.3%, settling at approximately 0.997, as its proportion in the curve 3pool rose to more than 70%, compared to the usual 33.1%.
The 3pool of Curve has a large quantity of liquidity in the three leading stablecoins: USDT, USD Coin (USDC) and Dai (DAI). An increase in the proportion of a certain stablecoin in the pool suggests a strong selling of that asset.
Crypto trading bot borrows $200 million for a $3 gain
A crypto trading bot, designed to execute arbitrage trades, executed a number of intricate moves within the Ethereum blockchain, including obtaining a $200 million flash loan, to procure a meager $3.24 in profit.
On June 14th, Arkham Intelligence, a blockchain analysis company, presented an analysis of the bot’s activities. The firm stated that the transaction was carried out by a bot that utilizes flash loans for arbitrage.
Uniswap releases version 4 code, allowing for new types of liquidity pools
Uniswap Labs has made public a draft of the code for Uniswap v4, which was announced in a blog post by Uniswap’s founder, Hayden Adams, on June 13. This new code includes “hooks,” or plugins that can be used by developers to build personalized liquidity pools.
Uniswap, the largest decentralized crypto exchange by volume, launched its latest iteration, v3, on May 4, 2021.
An attacker siphoned off $800,000 from the DeFi protocol Sturdy Finance.
Sturdy Finance, a DeFi protocol, suffered a security breach which resulted in the loss of 442 Ether (ETH), valued at approximately $800,000 at the time of writing. The exploit took advantage of a vulnerability in a price oracle, allowing the attacker to siphon funds from the protocol.
On the twelfth of June, PeckShield, a blockchain security company, informed Sturdy Finance of a transaction that could be associated with price manipulation. Shortly afterwards, the DeFi protocol declared that they were conscious of the exploit and acted by suspending all markets and assuring their users that no extra funds were in danger.
Sturdy Finance resumed operations in its stablecoin market on June 16, almost three days after the security breach. Additionally, the DeFi protocol offered a reward of $100,000 to any individual who could contribute to either the apprehension of the culprit or the recovery of the funds.
Hashflow assures users will be made whole following $600,000 exploit
Hashflow, a crypto trading platform, has assured those affected that they will be fully compensated after an exploit caused at least $600,000 worth of digital assets to be taken from the platform. On June 14, PeckShield, a blockchain security company, reported that there was an ongoing issue with the Hashflow trading platform.
A short while later, Hashflow informed its users that it was taking action concerning the contract approval issue that PeckShield had identified.
DeFi market overview
This past week saw a bearish decline in the total market value of DeFi. According to data from Cointelegraph Markets Pro and TradingView, the top 100 tokens by market capitalization in DeFi experienced a bearish week, with the majority of tokens trading in negative territory. The total value locked in DeFi protocols stayed below the $50 billion threshold.
Thank you for taking the time to read our summary of the most influential DeFi events of the week. Don’t miss out on next Friday’s edition, where we will bring you more news, analysis and education about this ever-evolving sector.
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