M6 Labs: Kyber hacker attempts hostile takeover?
Major security vulnerabilities in several cryptocurrency exchanges have raised concerns about cybersecurity issues in the digital asset sector.Author: M6 Labs
In recent weeks, the world of cryptocurrency has been nothing short of thrilling. The market has been volatile, with major cryptocurrencies experiencing significant price fluctuations, and major security vulnerabilities at several cryptocurrency exchanges have heightened concerns about cybersecurity in the digital asset space. Let's dive deeper.
Layer 1, Layer 2, and DeFi
Market Conditions: The Cryptocurrency Circus
This period has been filled with challenges and breakthroughs. For enthusiasts and investors, it is a constantly evolving field, ensuring that the world of cryptocurrency is never dull!
In short:
Hacker attacks have had a certain impact on the cryptocurrency space, with notable exchanges such as Poloniex, Kronos Research, Velodrome, Aerodrome, Heco Bridge, and especially Kyber suffering from security issues.
Digital asset investment products saw an inflow of $346 million.
Activity and inflows in Arbitrum have increased, surpassing other Layer 2 solutions.
The Ethereum-based Layer 2 network Blast attracted $621 million in locked value within just 10 days of its launch.
Hacker Attacks
In recent developments, the digital asset space continues to be plagued by serious security vulnerabilities. Notably, Poloniex suffered a major hack, resulting in a loss of approximately $114 million. Additionally, Kronos Research, known for algorithmic trading and market making, experienced a security breach with losses reaching $26 million.
These incidents also involved Velodrome and Aerodrome, whose front-end systems were compromised. These events highlight the ongoing vulnerabilities in the infrastructure of digital asset platforms. Furthermore, the cross-chain interoperability platform Heco Bridge was hacked, resulting in a staggering loss of $115 million.
These incidents are not isolated but part of a series of significant vulnerabilities in the digital asset space. The most notable event this week involved Kyber Network, where hackers made specific demands. This incident has garnered considerable attention within the community. Here are some of the hackers' demands.
The cumulative effect of these hacker attacks is multifaceted. On one hand, they undermine trust in the digital asset space, raising concerns among investors and users. On the other hand, some analysts believe that these ongoing attacks may help strengthen the ecosystem by revealing and addressing vulnerabilities, effectively putting the infrastructure to the test.
Despite the sector showing strong resilience, the persistent nature of these attacks poses a critical challenge. The path to establishing a more secure and robust digital asset environment depends on effectively addressing and mitigating these security vulnerabilities.
This evolution is essential for the advancement and mainstream acceptance of digital assets and blockchain technology. Such situations often prompt regulators to consider and potentially implement stricter regulatory measures to protect investors and maintain market integrity, ultimately hindering the cryptocurrency industry.
Fund Inflows
Last week, inflows into digital asset investment products experienced nine consecutive weeks of growth, reaching $346 million, primarily driven by expectations surrounding the launch of U.S. spot exchange-traded funds (ETFs). This surge in inflows pushed total assets under management to $45 billion, the highest level in over a year and a half.
Canada and Germany accounted for 87% of the total inflows, while the U.S., which is expected to be waiting for the ETF launch, saw only $30 million in inflows. Additionally, other cryptocurrencies such as Solana, Polkadot, and Chainlink received inflows of $3.5 million, $800,000, and $600,000, respectively.
The activity in the derivatives market has significantly increased, with DEX trading volume expected to exceed $7.5 billion, marking the highest monthly total since February 2022. DYdX has emerged as a standout in the perpetual contract ecosystem, currently solidifying its position with a robust daily trading volume of approximately $1 billion.
Arbitrum has recently become more active, primarily due to the introduction of a new short-term incentive program. Launched in September 2023, this program aims to allocate up to 50 million ARB tokens from the Arbitrum DAO Treasury to support its ecosystem, particularly decentralized applications and DeFi projects.
Currently, the inflow of funds into Arbitrum exceeds that of other Layer 2 solutions. Source: DefiLlama.
Blast is a new Ethereum-based Layer 2 network that achieved a total locked value of $621 million within just 10 days of its launch, nearing Solana's TVL. Blast was founded by Tieshun "Pacman" Roquerre, who is also the creator of the NFT marketplace Blur.
In summary: Despite facing challenges and security vulnerabilities recently, the cryptocurrency market remains healthy and shows a positive trajectory. Major exchanges are facing regulatory issues, but the market remains stable. Hacker attacks have raised security concerns, yet the market continues to demonstrate resilience. The $346 million inflow into digital asset investment products indicates strong investor confidence. Layer 2 solutions like Arbitrum are experiencing growth, while new networks like Blast are gaining attention.
Blue-Chip and Major Asset Overview
Source: Tradingview.
Mantle performed strongly over the past week, rising 13%. In fact, since October 19, 2023, MNT has been on an upward trend, achieving an impressive return of 62.5%. Currently, Mantle is the sixth-largest Layer 2 platform in the world, with a total locked value of $218 million.
Source: Nansen.
dYdX experienced an 8.5% decline ahead of the important token launch scheduled for December. This event will introduce a token valued at $50 billion to the market, a development closely watched by investors and market analysts.
Terra Luna Classic (LUNC) experienced a significant surge, with its valuation increasing by 60% last week. Since October 20, LUNC's valuation has astonishingly grown by 111.4%.
Due to ongoing legal challenges involving former CEO Changpeng Zhao, BNB saw a 4% decline over the past week. The situation escalated as Zhao was formally designated as a flight risk in the lawsuit proceedings.
UNI rose from $4.90 to $6.35 between November 22 and 28, driven by increased liquidity following the Binance incident. However, the price subsequently fell back to $5.90.
Since November 27, TORN has dropped 57% after being delisted from Binance.
SOL rose 5% this week, partly due to the strong performance of the Solana-based memecoin BONK, which has increased by 600% over the past 30 days.
XRP fell below the $0.60 support line after a whale sold over 57 million XRP tokens but subsequently recovered.
Smart Money Movements
Tokens
BitStable ($BSSB) has attracted the attention of smart money, as it can utilize Bitcoin ecosystem assets as collateral to generate stablecoins—this project has generated considerable interest.
Recently, smart money also acquired some $Auction, possibly influenced by the launch of $BSSB on its platform (Bounce Finance).
Another noteworthy development is the smart money bidding on $BYPASS this week, a bot that allows users to trade on centralized exchanges like Binance without logging in.
Additionally, $PLANET has caught the attention of smart money, showing strong performance in the real-world asset narrative.
Over the past week, several smart money addresses have accumulated $RVF.
Liquidity Mining
Smart farmers are mining ETH and stablecoins on Ambient Finance's Scroll, awaiting the $Ambient airdrop, with a potential $Scroll airdrop coming soon :)
Lybra Finance remains a favorite among large investors.
Smart farmers are closely collaborating with Prisma Finance, participating in various pools offering attractive annual yields, including the native mkUSD/USDC - Convex with an unboosted annual yield of 29.37%, totaling $3.67 million in locked value!
Some smart farmers have purchased $BLUR and deposited it into blur.io to earn points for $BLUR S 3.
Significant On-Chain Movements
GSR made a significant acquisition, acquiring $2.5 million worth of $HFT, nearly 5% of the circulating supply, and depositing it into a newly created address.
Recently, a whale (0x d5) removed 35% of $Sidus's on-chain liquidity. Check out their Debank profile.
This is just a preview of our weekly report on L1, L2, and DeFi; be sure to check out the full version of the report here.
NFT and Gaming
Project Updates
ReadON and MOBOX announced a strategic partnership aimed at unifying the Web3 gaming community.
Ubisoft's "NFT Champion Tactics" game will enter Animoca's "Mocaverse."
Japanese giant SquareEnix will launch NFT auctions for a new Web3 game on Ethereum and Polygon.
Azuki DAO has rebranded to "Bean" and dropped the lawsuit against founder Zagabond.Pudgy Penguins released an exclusive Walmart product called the "Influencer Gift Box."
The game studio behind Matr1x Fire raised $10 million for its NFT mobile shooter.
Magic Eden launched a wallet supporting Bitcoin, Ethereum, Solana, and Polygon. Users can apply for a waitlist through their Twitter link.
According to CoinGecko research, 2,127 Web3 games have failed in the past five years, accounting for 75.5% of the total, with an average failure rate of 80.8%.
The new L2 platform Blast, built by Blur founder Pacman, reached a total locked value of $600 million in just 10 days.
Social activity across multiple projects continues to reach new highs. Blur is expected, but the inclusion of Floki, Naka, and VRA is also noteworthy.
Source: LunarCrush.
Blue-Chip Overview
NFT trading volume continues to rise, indicating sustained interest in traditional NFTs. Despite concerns about the negative impact of the bear market on NFTs, the popularity of these digital collectibles remains high, with users recognizing their value.
It is expected that established blue-chip NFT collections will maintain their significance and value in the future. Notably, while Crypto Punks has occupied the top sales position in the past seven days, this original blue-chip collection has either dropped in ranking or moved towards the lower end of the market. Additionally, Ordinals have shown significant trading volume on markets like OKX, indicating that this trend is becoming a permanent feature of the Bitcoin ecosystem.
Top 10 collections over the past 7 days. Source: DappRadar.
In terms of NFT trading volume, Blur continues to lead, surpassing OpenSea, demonstrating that reasonable incentive mechanisms can overcome the advantages of being a first mover in the field.
However, users should note that Blur has been flagged for a higher degree of wash trading. OKX's NFT market recently launched successfully, with a significant increase in trading volume, most of which comes from BTC Ordinals. Meanwhile, Magic Eden has established itself as the preferred market for NFTs on Solana.
In terms of NFT trading volume, Blur continues to lead, surpassing OpenSea, demonstrating that reasonable incentive mechanisms can overcome the advantages of being a first mover in the field.
However, users should note that Blur has been flagged for a higher degree of wash trading. OKX's NFT market recently launched successfully, with a significant increase in trading volume, most of which comes from BTC Ordinals. Meanwhile, Magic Eden has established itself as the preferred market for NFTs on Solana.
Top 5 NFT markets over the past 30 days, including non-EVM metrics. Source: Footprint Analytics.
The Ethereum main chain remains the primary hub for NFT trading, with many users preferring to trade on the main chain. Despite the growth of successful NFT platforms on Layer 2 solutions like Arbitrum and Optimism, NFT trading on these networks has yet to gain significant traction.
Interestingly, even with increasing trading volume and liquidity in the Arbitrum ecosystem, NFTs seem to remain a secondary focus for Arbitrum traders, while Polygon continues to be the preferred choice for NFTs on Layer 2 networks.
Top 10 NFT games over the past 7 days. Source: DappRadar.
Degen Corner
DeFimons continues to make significant progress. The game is currently free to play and is set to launch important blockchain integrations. Try it out here.
Pixels is a casual farming game that is gradually gaining popularity on the Ronin chain of the Axie Infinity ecosystem. The game's concept revolves around resource collection, farm building, and joining others in participation. Check it out here.
Duel Arena is a one-on-one dueling game for Ether prizes, integrated into Cambria. In this mini-game, players stake Ether in an on-chain escrow system and engage in life-or-death duels to win the staked Ether. The game is currently ongoing and has made significant progress, with over $1 million in Ether staked in its duels.
Kamigotchi is an on-chain pet RPG game developed on Canto, now planning to launch on the Optimism Layer 2 (L2). The game's mechanics are similar to Pokémon and include an on-chain room system. While there is no exact release date, it is expected to launch in the first half of 2024. Keep an eye on this.
Game-related tokens have seen noticeable growth over the past week: $MAGIC (+16%), $ILV (+8.3%), $RON (+28.2%), $WILD (+32.9%), $RARE (+76.4%), TLM (+16.9%), and $GENE (+48.1%).
Major leaders in the NFT space, such as $IMX (-9.3%) and $BLUR (-2.3%), have experienced pullbacks after recent gains.
This is just a preview of our weekly NFT report; be sure to check out the full version here.
