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DeFi's Disturbing Week Full of Security Threats
The week has been a tumultuous one for Decentralized Finance (DeFi), seeing a spate of security violations on several prominent platforms. Almost $39 million was reportedly stolen from three independent DeFi platforms, thus casting a shadow over the industry's security measures. Notably, Alphapo lost over $32 million, while Eco-friendly Era Lend and fledgeling DeFi protocol, Conic Finance, lost $3.4 million and nearly $3.5 million respectively.
However, it's not all bad news in the DeFi world. Amidst a bear market condition, steadfast growth and progress in zero-knowledge-proof (ZK-proof) scaling solutions continue to be the silver lining. This positive development remains unaffected despite a significant decrease in the total asset value due to security abuses and unfavorable market conditions.
Alphapo Suffers a $31 Million Security Breach
On July 22, alarming reports were released about a major security breach at Alphapo, a prominent crypto payment platform. It was estimated that around $31 million worth of Ether (ETH), TRON (TRX), and Bitcoin (BTC) had been siphoned off from the platform. The figure could potentially be even higher considering the uncertainty surrounding the exact amount of stolen Bitcoin. According to renowned on-chain investigator ZachXBT, the culprits exchanged the stolen funds for Ethereum and subsequently moved them via Avalanche and Bitcoin blockchains. DeFi analysts from DeDotFi suspect the security lapse may have originated from leaked private keys, a claim that is still under investigation.
Read-only Reentrancy Attack Costs Era Lend $3.4 Million
Era Lend encountered a setback on July 25 as a 'read-only reentrancy attack' resulted in a loss of $3.4 million. This unusual attack is believed to have been carried out by specialized hackers who managed to interrupt a multistep process and conduct the malicious act. Block-chain security firm, CertiK, reported that due to the 'read-only' reentry approach used by the hackers, the compromised contract did not register any updates.
Zero-Knowledge Tech Developments Persist Amid Bear Market
Despite the bear market, the Ethereum Community Conference (zkDay) in Paris saw significant advancements in the sphere of Zero-Knowledge tech. This innovative technology, allowing validation without revealing sensitive information, is crucial for the enhancement of layer-2 scaling solutions. By enabling private transactions through simple cryptographic proof on layer 2, ZK-proofs significantly reduce transaction times.
Optimism Overturns Arbitrum in Transaction Volume
A significant shift has taken place after six long months where the Optimism Network has surpassed the transaction volume on Arbitrum. Both Optimism and Arbitrum use optimistic rollup technology that lowers transaction fees by processing transactions in bulk. The surge on the Optimism network is credited to the recent launch of Worldcoin, coincidentally at a time when Arbitrum's quest season concluded.
Snapshot of the DeFi Market
The DeFi market witnessed a revival after weeks of bearish pressure. Chart data from TradingView depict a promising trading week for the top 100 DeFi tokens as per market capitalization. However, the total value locked in DeFi continued to hover below the $50 billion threshold.
Stay tuned till next week as we continue to bring you the most significant events, insights, and breakthroughs from the ever-changing landscape of DeFi.
