July 12, 2022       /       Unchained Daily       /       Laura Shin

Daily Bits✍️✍️✍️

• Investigative reporter Matt Taibbi called into question whether Circle’s reserves for USDC would belong to the company or its users.
• Crypto lender Vauld disclosed a $70 million shortfall.
• Some BTC miners halted operations after a call for energy conservation in Texas.
• The Saudis NFT collection had a successful launch with more than $7 million in sales.
• Celsius reclaimed $172 million of collateral from DeFi protocols Aave and Compound.
• In spite of sanctions, Binance continued its operations in Iran.
• Kucoin denied layoff rumors and announced plans to hire 300 people.
• Compass Mining recovered access to some of its mining equipment in Maine after a court order.
• Celsius hired new restructuring lawyers to advise it through its options.

Today in Crypto Adoption…

• Gaming giant GameStop launched a beta version of its NFT Marketplace.
• Crypto trading platform OKX signed a deal to be Manchester City’s official training kit sponsor.
• The Financial Stability Board called for new crypto regulations.

The $$$ Corner…

• LI.FI, a cross-chain infrastructure protocol, raised $5.5 million led by 1kx Network.
• Klarna, a Swedish fintech company, raised $800 million but suffered a massive cut in its valuation.

What Do You Meme?

What’s Poppin’?

By Juan Aranovich

Changpeng Zhao, CEO of Binance, tweeted that the company had found an exploit on Uniswap V3, one of the largest DeFi protocols on the Ethereum Blockchain. According to CZ, a hacker was able to steal 4,295 ETH, which are worth ~$4.7 million.

CZ announced this on Twitter so that he could get in contact with the Uniswap Team and help them solve the problem. Someone pointed out that it’s “weird” he didn’t have a direct line with them. However, CZ responded that he never had to talk with anyone from Uniswap, as it is a decentralized, strong project with lots of users, and the “grandfather of DeFi.”

CZ received further criticism for other reasons. For starters, it looks like this was not an exploit of the Uniswap V3 code. Instead, it was a “very successful phishing campaign,” according to crypto security researcher samczsun.

Considering the fact that it was not an exploit, ChainLinkGod, a crypto influencer, said that CZ’s tweet “seems like an incredibly irresponsible thing to tweet.”

“Stupid as f*ck to tweet this out instead of asking the team privately even if it *was* an exploit. The fact that it has nothing to do with the contract (and the Binance team didn’t bother checking this) makes it so much worse,” added FatManTerra.

Hayden Adams, CEO and founder of Uniswap, was quick to shed light on the situation. “This was a phishing attack that resulted in some LP NFTs being taken from individuals who approved malicious transactions. Totally separate from the protocol. A good reminder to protect yourself from phishing and not click on malicious links,” he said.

By Juan Aranovich

Almost 50 projects that were previously on the Terra Network have begun migrating to Polygon, a side-chain scalable solution in the Ethereum Blockchain, two months after Terra started to suffer its collapse.

“Terra projects have begun migration. Over 48 projects and counting (…) It was so awesome to help and welcome all these wonderful developers to our thriving ecosystem!” said Ryan Wyatt, CEO of Polygon Studios.

After the meltdown of Terra, several projects were left homeless. There was initially some competition among different blockchains, which launched a bunch of initiatives to attract all those projects and developers. In May, Polygon launched a multi-million dollar fund to assist Terra developers and help them migrate to its blockchain. Other networks that tried to get all that DeFi talent include Kadena, Algorand, Injective and VeChain.

OnePlanet, an NFT Marketplace, is one of the projects that migrated to Polygon. “OnePlanet has taken the lead and built its own version of Noah’s Ark to rescue Terra’s burgeoning NFT biodiversity and take it to a new home,” it posted on its blog.

Polygon has been announcing many new developments during the last week.

• Reddit launched an NFT Marketplace on Polygon.
• Robinhood enabled deposits and withdrawals through the Polygon network.
• Ripio, an Argentinian exchange, is building a web3 wallet on Polygon.
• Phone maker HTC launched a web3 phone in collaboration with Polygon and Ethereum.

“We remain laser focused on shipping bleeding edge tech and bringing it to the masses,” said Mihailo Bjelic, cofounder of Polygon.

Recommended Reads

1) Idan Levin on the “Cosmosification” theory of Ethereum:

2) Arkham on the Celsius crisis:

3) Shivsak on the many faces of Bitcoin:

On The Pod…

Ryan Berckmans, Ethereum investor and community member, and Alexandre Bergeron, Bitcoin investor, discuss Lido’s dominance as a liquid staking provider, whether that issue can be resolved, and how it could be a centralizing force for Ethereum. Show highlights:

• what stETH is, what the uses cases are for stETH, and why it is important
• how Lido had a first-mover advantage and how that kicked off network effects
• whether the liquid staking derivatives system is one of a “winner-take-all”
• how much of the staked ETH will be turned into a liquid staking derivative
• how Lido might have a huge MEV opportunity after the Merge
• what the proposer-builder separation is
• whether Lido’s dominance will increase over time
• whether other competitors have been competitive with Lido
• why Lido is a natural monopoly because of the incentives and MEV opportunities
• what the implication of Lido’s monopoly is for Ethereum’s censorship resistance
• whether Lido is effectively a single entity despite having multiple node operators
• whether there could be a long waiting period for becoming a validator after the Merge
• how Lido is moving its staking derivatives to other chains
• how Lido’s new dual-governance proposal works, why it might be useful to decentralize Lido and whether it reduces the power of LDO token holders
• how Lido’s centralization is the biggest threat to Ethereum in the long term and what are the possible solutions
• why Ryan believes the value of ETH comes from its credible neutrality and whether Lido’s centralization may jeopardize that
• whether finding solutions around MEV opportunities is a good way to reduce Lido’s monopoly
• whether Lido’s competitors could form an alliance and build a tokenized basket of their staking derivatives to compete with Lido
• whether Lido could airdrop the LDO token to all ETH holders to decentralize its governance token

Book Update

You can purchase it here: http://bit.ly/cryptopians