Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.
On June 15, an imbalance in Curve Finance’s 3pool led to a Tether (USDT) depeg scare as the stablecoin’s weightage in the pool rose above 70%, leading to heavy selling. Tether’s chief technology officer claimed these market conditions are stress tests for the stablecoin and played down the depeg “FUD.”
In other news, a crypto trading bot programmed to execute arbitrage trades borrowed $200 million to make just over $3 in profit.
Uniswap, the decentralized exchange protocol, released its version 4 code on June 13, making way for new liquidity pools.
DeFi lending platform Sturdy Finance was drained for $800,000. The protocol’s team offered a $100,000 bounty for returning the funds and reopened its stablecoin market on June 16. In another exploit, the Hashflow protocol was drained for $600,000; however, Hashflow assured users they would be “made whole.”
The top 100 DeFi tokens had another bearish week, with most of the crypto tokens trading at three-month lows.
Curve pool imbalance triggers USDT depeg concerns, Tether CTO calls it FUD
USDT slightly deviated from its United States dollar peg on June 15 due to an imbalance in Curve’s 3pool. The price of USDT fell by 0.3% to around 0.997 as its weightage in the curve 3pool increased to over 70% from the usual 33.1%.
Curve’s 3pool is a stablecoin pool for decentralized finance holding a massive amount of liquidity in the three top stablecoins: USDT, USD Coin (USDC) and Dai (DAI). A significant rise in the weightage of a particular stablecoin in the pool indicates heavy selling of that asset.
Crypto trading bot borrows $200 million for a $3 gain
A crypto trading bot programmed to perform arbitrage trades made various complex moves within the Ethereum blockchain — including taking a $200 million flash loan — to secure a mere $3.24 profit.
On June 14, blockchain analysis firm Arkham Intelligence shared a breakdown of the bot’s movements. According to the firm, the transaction was made by an arbitrage bot that uses flash loans.
Uniswap releases version 4 code, allowing for new types of liquidity pools
Uniswap Labs has released a draft of the code for Uniswap v4, announcing the move in a June 13 blog post from Uniswap’s founder, Hayden Adams. The new code features “hooks,” or plugins that allow developers to create custom liquidity pools.
Uniswap is the largest decentralized crypto exchange by volume. Its latest version, v3, was deployed on May 4, 2021.
Attacker drains $800,000 from DeFi protocol Sturdy Finance
DeFi protocol Sturdy Finance has lost 442 Ether (ETH), worth almost $800,000 when writing, to a security exploit. The attacker exploited a vulnerability that eventually manipulated a faulty price oracle, allowing them to drain funds from the protocol.
On June 12, blockchain security firm PeckShield alerted Sturdy Finance and reported a transaction that seemed to be related to price manipulation. Almost an hour later, the DeFi protocol said it was aware of the exploit and responded by pausing all markets and assuring its users that no additional funds were at risk.
Sturdy Finance reopened its stablecoin market on June 16, nearly three days after the exploit. The DeFi protocol also offered a $100,000 bounty to anyone who could help bring an arrest or recover the funds
Hashflow assures users will be made whole following $600,000 exploit
Crypto trading platform Hashflow has assured affected users will be “made whole” following an exploit that saw at least $600,000 in digital assets removed from the platform. On June 14, blockchain security firm PeckShield reported an ongoing issue with the Hashflow trading platform.
A couple of hours later, Hashflow alerted users that it was addressing the current situation related to contract approvals as flagged by PeckShield.
DeFi market overview
DeFi’s total market value saw a bearish decline this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bearish week, with most tokens trading in the red. The total value locked in DeFi protocols remained below the $50 billion mark.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.