DeFi Downturn: Top Tokens See Losses Amidst Volatile Trading
Over the past week, most of the top100 DeFi tokens have been trading at a loss, with only a few seeing double-digit growth.
Finance Redefined is your weekly dose of essential decentralized finance (DeFi) insights. Our newsletter is crafted to bring you significant developments over the last week so that you can stay up-to-date on the latest in the industry.
The past week in the DeFi ecosystem has been all about the Ethereum Merge. This major development has the potential to completely change the way that decentralized finance works, and it has everyone in the community excited about what the future holds. The Merge is still in its early stages, but it is
Aave community proposed temporarily suspending Ether (ETH) lending before the Merge, citing the potential issue of high ETH utilization that may result in liquidations being hard or impossible and annual percentage yields (APYs) reaching negative figures. An industry expert shared his opinion on possible censorship vulnerabilities that the Ethereum network could eventually face in the wake of its transition to a proof-of-stake (PoS) blockchain. The Aave community has proposed temporarily suspending Ether (ETH) lending before the Merge, citing the potential issue of high ETH utilization that may result in liquidations being hard or impossible and annual percentage yields (APYs) reaching negative figures. An industry expert has shared his opinion on possible censorship vulnerabilities that the Ethereum network could eventually face in the wake of its transition to a proof-of-stake (PoS) blockchain. The Aave community's
It's been a tough year for the Ethereum community, with the long-awaited merge of the Ethereum network finally happening, but also some major setbacks along the way. First and foremost among these was the Rari Fuse exploit, which caused serious damage to the reputation of DeFi protocols. The FBI's warning about $1.6 billion worth of exploits in the DeFi space is a further blow, and it remains to be seen how the community will recover from these challenges.
We can see that the top-100 DeFi tokens have been facing some bearish pressure over the past week, with most of them trading in the red. However, there are a few tokens that have actually shown double-digit growth, which is encouraging to see. Overall, it seems like the market is still trying to find its footing after the recent sell-off.
Will Ethereum 2.0 Be Vulnerable to Censorship?
Ethereum's decentralized design means that it is inherently resistant to censorship, and this will continue to be the case in the future. Ryan Berckmans, an Ethereum community member and investor, believes that the network will be able to withstand any censorship risks that may arise, both in the short and long term. This makes Ethereum a valuable platform for developers and users who need to ensure that their applications and data are
It is still unclear whether Ethereum transactions will be at risk of censorship after the recent ban of the Ethereum-based privacy tool Tornado Cash by United States authorities. Some worry that the transition to a proof-of-stake system could make Ethereum more vulnerable to censorship. However, it is also possible that the censorship of Tornado Cash was an isolated incident that will not be repeated. Only time will tell whether Ethereum transactions will be safe from censorship in the future.
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Aave Community Proposes to Suspend ETH Lending Before the Merge
As the Ethereum Merge approaches, Block Analitica's risk research and analysis team has proposed a temporary pause in ETH borrowing to mitigate the risks that may lead to a DeFi implosion in the Aave lending protocol during the Merge. By taking a cautious approach and pausing borrowing activity during this time of transition, we can help protect against a potential implosion of the DeFi ecosystem.
The team pointed out the potential issue of high ETH utilization, which may result in liquidations being hard or impossible and APYs reaching negative figures. Furthermore, the uncertainties surrounding the Merge and a potential Ethereum proof-of-work (PoW) fork may cause liquidity providers to start a bank run, pushing utilization to even higher levels. This could have disastrous consequences for the Ethereum ecosystem, and highlights the need for urgent action to address the issue. We urge all stakeholders to come together and find a solution that will protect the interests of all involved.
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DeFi protocol Rari Fuse shuts down months after hack.
Babylon Finance has finally announced that it will shut down after months of trying to recover from the negative momentum caused by the Rari Fuse exploit. This is a disappointing end for a once-promising company, but ultimately it highlights the importance of security in the cryptocurrency space. With hacking attempts becoming more and more sophisticated, it's crucial that exchanges and wallets take every precaution
It is unfortunate to see a platform like Fuse suffer such a devastating blow. Despite the team's best efforts, the hack proved to be too much for the platform to overcome. This is a real loss for the community that was using Fuse, as it was a valuable lending market worth $10 million. We hope that the team is able to learn from this experience and that the platform can eventually recover.
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FBI issues alert over cybercriminal exploits targeting DeFi.
The FBI has issued a warning to investors about the dangers of investing in DeFi platforms. These platforms have been targeted by hackers and Exploits to the tune of $1.6 billion in 2022. This is a serious threat to investors and the FBI is urging caution.
The FBI's Internet Crime Complaint Center has issued a public service announcement urging investors to conduct diligent research before using any DeFi platforms. The center noted that there have been a number of exploits that have caused investors to lose money, and advised platforms to improve monitoring and code testing to prevent future incidents.
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DeFi Market Overview: A Comprehensive Guide
The data shows that DeFi's total value locked (TVL) has barely changed over the past week. The TVL is currently at around $61.97 billion. However, the top 100 DeFi tokens by market capitalization have had a mixed week, with most tokens seeing slight price decreases. Nevertheless, the overall change in price has been much smaller compared to last week. This shows that the DeFi market is still relatively stable despite some volatility.
The Lido DAO (LDO) registered the biggest weekly gain among the top 100 tokens, rising by 5.31%. This was followed by PancakeSwap (CAKE), which gained 1%. The rest of the other top-100 tokens saw single-digit declines over the past week.
Thanks for reading our summary of this week's most impactful DeFi developments. Next Friday, we'll be back with more stories, insights, and education on this dynamic and rapidly advancing space.