Decentralized finance (Defi)

Ethereum Could Touch $10,500 After Crypto Rises to Record High: Fundstrat Global

21/01/2021 by Idelto Editor

Fundstrat Global Advisors strategist David Grider predicts that the price of ethereum could rally to $10,500 per unit after the cryptocurrency set a new all-time high on Tuesday. The estimate implies a near 700% upside on the current ether price hanging above the $1,300 range.

According to Grider, ether (ETH) – the second largest digital asset after bitcoin (BTC) – will continue to benefit from its relationship with decentralized finance (defi) applications, the majority of which are built on the Ethereum blockchain, and have seen massive growth in 2020.

He also premised his prediction on the recent upgrade to the Ethereum network, which is targeting to become a blockchain for an entire financial system. When fully completed, he said, the three-part upgrade would allow the blockchain to process the same number of transactions as those done by the likes of Mastercard Inc. and Visa Inc.

“Ether is the best risk/reward investment play in crypto,” Grider was quoted as saying, adding that “blockchain computing may be the future of the cloud.” Risks may include delays in the network upgrade or the crypto market becoming bearish, said the report.

Ethereum shot 12% to a record high of nearly $1,440 on Tuesday, amid increased buying pressure.

Meanwhile, Luis Cuende, cofounder of the decentralized autonomous organization (DAO) Aragon, commented: “When thinking about what the Web 3.0 vision provides, institutional investors will recognise that although sovereign digital currency (BTC) is central, the importance of a programmable economy (ETH) should not be underestimated.”

He added: “ETH fundamentals are as robust as ever. Ethereum has actually found early product-market fit, and the protocol is making revenue. ETH is definitely maturing as an asset.”

Cuende sees ether bouncing between $2,500 and $7,500. He also believes that Ethereum rivals Polkadot, Cosmos, and NEAR “are well-positioned to capture a meaningful market share” until ETH 2.0 is complete.

What do you think about the Fundstrat Global price prediction on ether? Let us know in the comments section below.

ETH Fees Surge to All Time High After the Crypto Passed the $1,000 Mark

10/01/2021 by Idelto Editor

After the ether token surged past the $1,000 mark on January 3, the average transaction fee on the network similarly soared to a new all-time high (ATH) of $17.41, some 24 hours later. Although the average fee has since retreated, data on January 8 shows that the latest average fee at $9.79. This figure still well above the $3.56 seen on the first day of the new year.

Resurgent ETH fees

Before the new ATH, the Ethereum network’s previous highest average fee of $12.54 was recorded on September 1, 2020. At that time, some crypto enthusiasts attributed this surge to the decentralized finance (defi) hype. However, as the defi mania began to dissipate, ETH transaction fees gradually dropped.

However, as recent data shows, the network’s transaction fees, which averaged less than $5 for much of Q4 of 2020, have now stayed above $9 for all but two days of January 2021. This return of high fees on the network comes more than a month after ETH’s migration to a proof of stake (POS) consensus mechanism.

Meanwhile, the latest data shows that at the current fee levels, it now costs the same or even less to transact on the BTC network than on the ETH network. To illustrate, in the period during which ETH fees surged to the new ATH, transaction fees on the BTC have remained within the same range. For instance, during the entire Q4 period, fees on the BTC network have only peaked at $13.41 on October 31.

For much of Q4 of 2020, the fees on the Bitcoin network have fluctuated between the October 31 high of $13.41 and $1.44 the lowest average in that period. Similarly, on the BCH network, whose crypto is up by more than 100% since October 1, fees remain less than $0.01 per transaction.

Upgrade to Fix Problem of High Fees

Meanwhile, Kamil Brejcha, Founder at Dexfin offers the possible reason why ETH fees have spiked and how ongoing updates will fix this. Brejcha explains:

“We face high ETH fees because the Ethereum network still relies on miners to be block producers. The current update is called the Beacon chain, which allows depositing Ethereum for staking nodes. These nodes run on their own blockchain, which is not yet part of the mainnet.”

The Dexfin founder also details the upgrading process which starts with the Beacon chain. In 2021, the next Shard chain will follow before the merging of the two in the year 2022 or later. After that, the “transaction speed should improve more, also cutting the gas fee.”

What do you think is causing the fees on the ETH network to go up? Tell us your thoughts in the comments section below.

Expert: Defi Could Be a Common Term in the Financial Industry in 2021

26/12/2020 by Idelto Editor

The founder of defi-related fintech Yield believes 2021 will be the year that decentralized finance (defi) becomes a “common term” in the financial industry, as the sector is now taking it seriously and building R&D labs.

The Financial Industry Is Now Taking Defi Seriously, Says Expert

During an interview with news.Bitcoin.com, Tim Frost, who also worked in the development and growth at early stages of crypto companies such as QTUM, NEO, Paxful, Polymath, among others, forecasted that in the next 12 months, the total value locked up will pass $100 billion in the defi industry. He added:

In 2021, defi will go through some cycles, but clear winners and value propositions will become clear and evident.

Defi platforms like Yield, which recently raised $3.4 million in funding from BnkToTheFuture, Alphabit Fund, amongst initial backers in a hybrid round, have been catching other firms’ attention to provide initial funding.

The also founding member of the digital banking platform, Wirex, said that there will always be speculation and inevitable inefficiencies as with any new financial market innovation. He believes these are more present in the context of cryptocurrencies and the peer-to-peer (P2P) nature of defi.

However, he continued to explain further why investors are interested in defi:

To some investors, these are risks that they don’t want to take. However, it can be considered that the ‘Risk-Adjusted Rate of Return’, the trade-off between risk and expected returns or the risk premium that an investor demands for investment participation in defi instruments, will naturally be measured against other mature income-generating financial instruments. We are seeing this today through the outsized returns (>1,000% APY) that can be achieved using complex liquidity mining strategies and re-hypothecation techniques.

On yield farming, Frost stated that it has “opened the eyes to many,” as it has brought a lot of attention to defi, “and while much of the current form that we know as yield farming will not last, the basic concept of providing liquidity and receiving returns for doing so is very sustainable and the core fundamentals of yield farming.”

Security in the Defi Industry

Defi industry has also been making the headlines in 2020 due to the security breach incidents over the year. Frost commented on if it represents a major weakness of defi nowadays, as he pointed out that people are often “in too much of a hurry” about this kind of topics:

To deploy safely any financial company, you must do complete technical and business due diligence. Many defi projects simply do not go through extensive analysis and scrutiny before they go live. Without proper procedures, the vulnerabilities are high and not safe to deploy capital. The defi industry must mature and put in better procedures.

According to research conducted by crypto exchange Crypto.com, surveying 29,574 of its users, mainly on NFT, 74% of the respondents admitted to having used Defi products.

Do you agree with Tim Frost’s thoughts on defi industry? Let us know in the comments section below.

The post Expert: Defi Could Be a Common Term in the Financial Industry in 2021 appeared first on Bitcoin News.

Defi Protocol Founder Tricked, Hacked for $8 Million in Personal Funds

16/12/2020 by Idelto Editor

Nexus Mutual founder and chief executive officer Hugh Karp’s personal wallet address has been hacked for more than $8 million.

The attacker, a member of the Nexus defi protocol, tricked Karp into signing a transaction that transferred funds to the hacker’s own address. The attacker gained remote access to Karp’s computer and modified his Metamask extension.

Some 370,000 Nexus Mutual (NXM) tokens, worth about $8.25 million on Monday, were stolen from Karp’s personal wallet address, as a result.

In a tweet, Nexus Mutual said the hack, which happened the morning of Dec. 14, was a “targeted personal attack on Hugh”. Karp described the attack as a “very nice trick,” and “definitely next level stuff.” He pleaded:

You’ll have trouble cashing out that much NXM. If you return the NXM in full, we will drop all investigations and I will grant you a $300k bounty.

Nexus Mutual is unaffected by the hack nor are any members victims for this scam. The protocol said the hacker completed their know-your-customer (KYC) processes 11 days ago and then switched membership to a new address on December 3.

Nexus added that an investigation is ongoing to identify the attacker and how they operated. The team at Nexus said the stolen funds are being held at this address, and the attacker has already started exchanging some via 1Inch Exchange.

Meanwhile, the attacker reportedly cashed out up $2.7 million of his loot on Tuesday, according to blockchain analytics firm Scorechain. The hacker made several swaps of the stolen NXM on Uniswap via 1Inch Exchange, giving them roughly 137 BTC valued at $2.7 million at current market prices..

What do you think about Hugh Karp’s hack? Let us know in the comments section below.

The post Defi Protocol Founder Tricked, Hacked for $8 Million in Personal Funds appeared first on Bitcoin News.

$100 Million Liquidated on Defi Protocol Compound Following Oracle Exploit

27/11/2020 by Idelto Editor

Lenders on decentralized finance (defi) protocol Compound on Thursday got liquidated for a massive $103 million, according to analytics provider Loanscan. This happened after what appears to be an oracle exploit on the Dai stablecoin.

An apparent error or malicious attack to the Dai-dollar-peg data supplied by the Coinbase oracle pushed the price of the stablecoin to about $1.30 – a premium of 30% – leaving some users on Compound under-collateralized.

Compound gets its pricing data from Coinbase Pro. Now, once this happened, and based on the built-in protocol rules, this could only mean one thing – forced liquidation of the borrower’s position.

According to Alex Svanevik, chief executive officer of data analytics firm Nansen, the liquidations affected the third-largest COMP farmer, who was liquidated for $46 million. Svanevik told industry media that, “As far as I can tell, Compound worked exactly as it should. But questions will be asked about the oracle.”

Compound, the third-largest defi platform, allows users to borrow funds such as Dai from each other. However, to borrow, a user is compelled to provide collateral that exceeds the amount they are borrowing – meaning all loans should be over-collateralized.

When the price of Dai spiked in the suspected Thursday oracle exploit, liquidations occurred because the loans had become under-collateralized.

For example, if a Compound user borrowed the equivalent of $100 in Dai, and then the price of the stablecoin rose to $1.30, it means the user’s borrowed amount has also increased to $130. However, if the user has less than this amount in collateral, they would be considered under-collateralized. Compound will liquidate them.

This is the platform’s biggest liquidation yet. In July this year, Compound saw $6.3 million worth of liquidations in 24 hours. Some observers criticized Compound for relying on a centralized platform like Coinbase for its price feeds.

“It boggles my mind that we are in late 2020 and defi platforms are still vulnerable to oracle attacks,” said one Twitter user @linkfrogposter. “This is why the Chainlink price feeds [for example] uses multiple sources of information (multiple independent node operators and multiple independent data providers). A median is then calculated.”

What do you think about Compound’s $100 million liquidations? Let us know in the comments section below.

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