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Axie Infinity’s Ronin Bridge hackers have started moving their funds despite early hopes of a dialogue between the creators and the hackers.
The decentralized finance (DeFi) world saw another week of increased on-chain and developer activity even when the overall market cap took a slight dip amid overall market retrace. The creators of the popular play-to-earn nonfungible token (NFT) game Axie Infinity raised $150 million to reimburse hack victims of the Ronin bridge exploit.
The decantralized application, o daily user count surged to 2.4 million in the first quarter of 2022, while SushiSwap (SUSHI) and Synthetix (SNX) were booted out of Grayscale’s popular Decentralized Finance Fund. The widely-popular DeFi protocol Yearn.finance announced its support for the newly-passed ERC-4626 tokenized vault standard.
The price momentum of the majority of DeFi tokens remained in red over the past week, as the overall crypto market registered a retrace from new highs last week.
Axie Infinity creator raises $150M led by Binance to reimburse stolen funds
Sky Mavis, the creator of the popular play-to-earn nonfungible token game Axie Infinity has raised $150 million in a new funding round led by Binance.
The fundraiser is aimed at reimbursing lost funds from the recent exploit on Axie Infinity’s Ronin Bridge, which resulted in the loss of over $600 million. The funding round also saw participation from Animoca Brands, Andreessen Horowitz, Dialectic, Paradigm and Accel.
Apart from the $150 million raised funds, the remaining amount would be reimbursed from Sky Mavis and Axie Infinity’s balance sheet.
DApp daily users surge to 2.4M in Q1 2022 despite headwinds
According to a new industry report published by DappRadar, the number of users engaging in decentralized applications, or DApps, every day surged 396% year-over-year to 2.4 million. This is only 5.8% below the same user activity level witnessed in Q4 2021.
The overall growth was impressive, considering that the cryptocurrency sector saw a short-lived bear market during the quarter and experienced $1.19 billion in DeFi hacks and exploits.
Sushi and Synthetix get the boot in Grayscale DeFi Fund rebalancing
Digital asset management firm Grayscale has added three new cryptocurrency assets across three main investment funds while removing two other assets from its Decentralized Finance Fund as part of this year’s first quarterly rebalance.
Grayscale removed tokens from crypto-derivatives decentralized exchange Synthetix and decentralized exchange SushiSwap, as well as from its decentralized finance (DeFi) fund after the two crypto assets failed to meet the required minimum market capitalization. No other cryptocurrencies were removed during the rebalancing.
Yearn.finance advocates for the adoption of ERC-4626 tokenized vault standard
Following the successful deployment of 25 previous Ethereum Request for Comments (ERC) standards — including the industry-recognized ERC-20 for fungible tokens, ERC-721 for nonfungible tokens and the single smart contract multitoken ERC-1155 — the newly passed ERC-4626 is gaining traction within the Ethereum community due to its purported yield-bearing benefits.
Referred to as the “tokenized vault standard,” ERC-4626 is set to be implemented at the next Ethereum fork upgrade following approval by the developers within Ethereum’s governance procedure.
DeFi market overview
Analytical data reveals that DeFi’s total value locked has registered a $10 billion dip over the last week, reaching $130 billion at the time of writing. Data from Cointelegraph Markets Pro and TradingView reveals that DeFi’s top 100 tokens by market capitalization bled in red over the past week, along with the rest of the crypto market.
The weekly performance of the majority of the tokens remained on the bearish side, barring a few tokens that showed resistance against the trend. In the top-100 DeFi list, only Convex Finance (CVX) and Secret (SCRT) tokens traded in green, with CVX registering a 16% surge while SCRT rose by 4% over the past week.
Before you go!
The Ronin bridge hacker has started to move funds to coin mixers in a bid to launder the stolen Ether (ETH) and USD Coin (USDC). As per the latest report, the hacker account has sent out nearly $7 million to coin mixer services while moving another 2,018 ETH to a different wallet. While the creators of Axie Infinity have already raised $150 million and plan to utilize an additional $400 million from their balance sheet to reimburse users, the chances of getting back the stolen funds look thin at the moment.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.
It appears record-level DeFi exploits have not hurt crypto enthusiasts’ confidence in DApps.
According to a new industry report published by DappRadar, the number of users engaging in decentralized applications, or DApps, every day surged 396% year over year to 2.4 million. This is only 5.8% below the same user activity level witnessed in Q4 2021.
The overall growth was impressive, considering that during the quarter, the cryptocurrency sector saw a short-lived bear market, as well as experiencing $1.19 billion in decentralized finance, or DeFi, hacks, and exploits.
Two of the worst affected token bridge protocols were that of Ronin and Wormhole. Last month, Axie Infinity’s Ronin bridge was breached for over $600 million after an attacker used hacked private keys to forge fake withdrawals. Meanwhile, the Wormhole protocol lost $321 million via a minting exploit in February. Though, in a rather heroic move, venture capital firm Jump Crypto dug into its own wallets and replenished the lost funds.
In addition, the staff at DappRadar wrote:
“The first quarter of 2022 had its ups and downs but was tainted by the war in Ukraine. This was one of the biggest events since the 2008 Global Financial Crisis that shook world markets and had a negative effect on the industry.”
Number of Unique Active Wallets Interacting with DApps | Source: DappRadar
Gaming DApps accounted for over 50% of all user activity in Q1 2022. Simultaneously, nonfungible tokens, or NFTs, generated $12 billion in trades despite warnings of a bubble. In terms of DeFi total value locked, Ethereum (ETH) once again held the top spot with $127 billion, followed by Terra Luna (LUNA) at $29 billion and BNB Chain at $13 billion.
How interoperability can scale DApps in 2022.
There are several projects that have been built within the Substrate environment.
One of them is CLV Chain — a chain working to offer interoperability with the EVM among other blockchain networks.
CLV Chain is a Substrate-based layer-1 chain compatible with the EVM, which means that developers can easily migrate their projects and smart contracts to the CLV Chain network despite having written them in Solidity within the EVM.
This EVM compatibility, combined with Polkadot’s interoperability possibilities, ensures developers can deploy their DApps to Ethereum alongside other parachains.
DApp developers will enjoy direct integrations with popular applications like MetaMask and Remix, helping streamline the development process and ensure more useful DApps for CLV users. As a result, more DApps harnessing the interoperability options offered by Polkadot means a more scalable future for all.
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Substrate is similar to Ethereum’s EVM, ensuring developers can build and test their applications in an isolated environment.
Substrate is an open-source development platform providing developers with a framework for building their own parachains. Substrate-powered chains are tied to the Polkadot main chain while also being interoperable with other blockchain networks. The Substrate offering provides an isolated virtual environment (WASM) similar to Ethereum’s for DApp development and testing.
Let’s examine the Polkadot network, for instance.
Polkadot (DOT) is a next-generation blockchain aiming for interoperability and building upon the concepts introduced by Ethereum. It is a blockchain protocol attempting to unite blockchain networks into one compatible environment.
The protocol is broken into two chain types: the main chain (also known as a relay chain) and parachains. Polkadot’s main chain is similar to other blockchain networks, providing transaction consensus and security. Parachains, however, are user-built chains that harness the power of the main chain and relay information to the main chain to ensure Polkadot has a consistent transaction history.
By providing security through the main chain and allowing for developer-powered parachains, Polkadot aims to offer all sorts of use cases without sacrificing scalability. Not only this, but such versatility will enable developers to build bridges or connections between blockchain networks, which, in turn, enables interoperability.
In this same vein, Polkadot also offers its own sort of virtual environment through Substrate.
The EVM exists so developers can build and test their applications in a secure environment before deploying them to the public network.
Ethereum’s virtual machine is a runtime environment — a sort of operating system in which developers can build and test their DApps without requiring powerful hardware of their own. Developers write their DApps in the Solidity programming language before sending them to the EVM, which can then execute the code via smart contracts.
However, the EVM exists in an isolated environment separate from the rest of Ethereum’s network. Such an operation is vital to the success of DApp development, as it enables developers to build while utilizing the full power of smart contracts without congesting the network or leaving their projects open to security vulnerabilities.
As Ethereum is a decentralized network, anyone in the world can access the EVM, ensuring DApp development is as accessible as possible. The EVM is powered by nodes connected to the Ethereum network, as is the history of the Ethereum blockchain.
Now, what if developers want to harness the EVM’s power while deploying on other blockchain networks?
Interoperability is the future of blockchain development.
Interoperability is the act of ensuring blockchain networks can interact with one another. From Bitcoin’s (BTC) inception, most blockchain networks have existed siloed off from each other, meaning users will struggle to move assets from one network to another, limiting their usage of decentralized applications and other benefits offered by specific chains.
A lack of interoperability limits users, but it also limits decentralized app (DApp) developers by forcing them to create one chain despite its pros and cons. These limitations also prevent networks from scaling, as interoperability ensures networks can reach as many users as possible.
For example, Ethereum (ETH) features a robust virtual machine environment called the EVM. However, developers wanting to utilize the EVM are forced to build on the Ethereum platform, which is slow and expensive despite its massive user base.
Cardano’s community is optimistic about an avalanche in the coming months.