ETH Researcher Sentenced to Prison?
This week BTC remained stagnant around the $40k mark. Amidst this dull price action, there were a lot of major events that took place.
The crypto giant Coinbase announced a suite of different projects that are going to be listed on their platform, a popular crypto guru gets sentenced to prison, the community was introduced to a new NFT standard, there were two big fund raising rounds from some of the leading crypto firms, and to end the week there was another major exploit. So let’s dive straight in.
Coinbase Listing
In an effort to increase transparency, Coinbase released a blog post where they listed the 50 assets that they intend to gradually list on their platform in Q2 2022. While the effort for transparency is commendable, the listing announcement was met with strong criticism from the crypto-natives who reside on crypto twitter. The primary criticism was that with Coinbase being one of the biggest Centralized Exchanges, they have a certain standard to uphold in terms of vetting projects and ensuring that their customers are safe. Majority of the assets they listed are small cap projects which are fairly illiquid, people considered this to be not up to the Coinbase standard which was the primary cause of the criticism.
To get the detailed list of the assets listed. Check this blog.
https://blog.coinbase.com/increasing-transparency-for-new-asset-listings-on-coinbase-e06f2edb095e
Crypto Guru sentenced to prison
Virgil Griffith is a cryptocurrency expert who was a researcher at the Ethereum Foundation at one point. He was recently found guilty and sentenced to 63 months in prison in the US. The reason for his arrest was that he travelled to North Korea to hold a conference where he taught the people about how to use crypto and the blockchain. This technology could potentially be used to circumvent the sanctions imposed on North Korea by the US. Due to this, Virgil was found to be in violation of the International Emergency Economic Powers Act which prohibits US citizens from providing goods, services, and technology to sanctioned countries. Hence, he was subsequently arrested.
Ava Labs & Pantera Capital fundraising rounds
Ava Labs is the foundation that created the Avalanche blockchain. They launched in Spetember 2020 with the aim to be an “Ethereum Killer”. They may not have “killed” Ethereum but have been very successful in terms of attracting users & developers to create an ecosystem of their own. They currently sit at $20b Mcap with their unique selling point being scaling through subnet architecture. To further the adoption of Avalanche, Ava Labs raised $350 million at a $5.25 billion valuation.
Pantera Capital is a very well-reputed crypto venture firm. Previously they raised $600 million in a funding round and announced that the fund had topped $1 billion mark. Now, the CEO announced that they are wrapping up a funding round for their blockchain fund which will be worth $1.3 billion. The goal is to invest in early-stage tokens, venture equity, Web3 firms, and tokens with strong liquidity. In addition to this they will also be raising an additional $200 million for a growth fund that will invest in projects that are in the “growth stage”, this exclusively includes firms that are ready to generate consistent revenue.
A new standard for NFTs
A major problem with NFTs as well as crypto in general is the alarming rate of rugpulls that take place, unassuming users constantly lose large sums of money. NFTs have brought in a lot of mainstream attention due to which a lot of people who are unaware of the tactics of these scammers have come into the space. The problem is that after they get scammed it leaves a bad taste in their mouth and very few return. To combat this, an upgrade to the ERC-721 standard has been created. ERC-721R allows users to claim a refund on their NFT if they believe they have given their money to the wrong project. When making the project, the developers can specify the amount that can be refunded as well as a length of time within which this refund can be claimed. If a user decides that they do not want to be in a particular project anymore then they can get a refund directly from the mint contract and have their funds back.
Beanstalk exploited
Towards the end of the week, Beanstalk farms was exploited for $182 million. Beanstalk is a lending platform that offers its own credit-based decentralized stablecoin BEAN. While the mechanisms were novel, they fell victim to yet another flashloan attack. A flashloan is when users can take out an uncollateralized loan but have to pay the loan back within the same transaction, if they fail to do so the transaction gets reversed. Using this flashloan mechanism, the hacker was able to drain all the liquidity from the Beanstalk protocol. While the total damage was $182 million, the hacker went away with $82 million in ETH through Tornado Cash, while the remaining $100 million was used to payback the flashloan fees to the different protocols used by the attacker.
This is all for this week’s newsletter covering all the major events in the cryptocurrency and Blockchain space. Tune in next week for another edition.