Welcome to the latest issue of Cointelegraph’s Decentralized Finance (DeFi) newsletter.
As the crypto community filled their stockings for the holiday season, the Grinch emerged to gift a gloomy fate to two DeFi platforms, stealing their holiday spirit and a ton of dollars.
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Binance Venture Capital Division Leads $ 60 Million Round for Multichain
Binance Labs, the venture capital arm of the global cryptocurrency exchange Binance, facilitated a $ 60 million capital raise for the cross-chain routing protocol, Multichain. Other prominent participants were Sequoia China, IDG Capital, and Three Arrows Capital.
Amid the corporate makeover for Multichain, which was renamed AnySwap last week, analytical estimates put the total value of the protocol above $ 5 billion, in addition to reporting more than 300,000 users on the platform. The funds raised will be used in various areas such as crypto algorithm research and development, audits, security, and the overall growth of the ecosystem.
In addition to financial support, Binance has also committed to developing a broader relationship with the protocol, announcing that Multichain will be officially recommended as a tool for linking bToken across chains via Binance’s smart contract platform, Binance Smart. Chain (BSC).
BSC expressed high praise for Multichain, noting that it is “one of the largest routers in BSC”. Zhaojun, co-founder of Multichain, stated that the protocol connects “more public and cryptoactive blockchain networks than anyone else, with lower transaction fees, shorter bridge time, and higher levels of security.”
Thanks Binance Smart Chain @BinanceChain for promoting #Multichain as officially recommended bridge#Multichain‘s top priority is to guarantee the security of on-chain assets https://t.co/CEocRygXzq
– Multichain (Previously Anyswap) (@MultichainOrg) December 20, 2021
Interlay Raises $ 6.5 Million to Accelerate DeFi Interoperability in Bitcoin
Interlay, a DeFi infrastructure startup, has announced a USD 6.5 million Series A funding round led by venture capital fund DFG Capital, with additional participation from Hypersphere and Nexo Finance, among others.
The funding is intended to support the construction of DeFi cross-chain applications with Ethereum, Cosmos and Polkadot, as well as to bring new developers to the team.
Interlay was designed to improve the interoperability of crypto assets such as Bitcoin (BTC) with networks that typically facilitate DeFi activity, such as Ethereum and Polkadot, a vision that the Web3 Foundation understood when it invested in the platform through a grant in March 2020.
Interlay’s core product, a Bitcoin-backed digital asset titled InterBTC, can be used within the Polkadot ecosystem for various DeFi activities, such as yield farming, lending, and acting as collateral. The tokenization of a Bitcoin derivative opens the possibility of a higher utility of the asset compared to the functional capacity of the Bitcoin network.
Regarding the funding round, James Wo, DFG founder and CEO, stated that Interlay’s solution will “expand the cross-chain possibilities of Bitcoin” before tweeting:
We are glad to lead the recent round of @InterlayHQ I believe what they do is very fundamental to the Polkadot ecosystem. If they gain 1% of BTC to use InterBTC, that’s $ 9 billion! @DFG_OfficiaI @inter_btc $ DOT https://t.co/phFpVXeG0L
– James Wo (@realjameswo) December 21, 2021
We are happy to lead the recent round of Interlay. I think what they do is very fundamental to the Polkadot ecosystem. If you earn 1% of BTC to use InterBTC, that’s $ 9 billion!
Bent Finance and Grim Finance multi-million dollar losses
DeFi protocol Grim Finance reported more than $ 30 million in losses this week after an “outside attacker” accessed the protocol vault contract through five reentry loops. This makes it the sixth platform to suffer a security breach in the month of December, after high-profile hacks such as the loss of $ 120 million from BadgerDAO.
In a thread of explanatory tweets, DeFi security service RugDoc stated that Grim Finance’s biggest mistake was failing to implement a before-after pattern reentry guard in the protocol’s smart contract encoding. Another mistake was granting the user “more privileges than necessary” by allowing them to choose the preferred deposit token. RugDoc further explained:
“Hopefully all projects can learn lessons from this incident, as most experienced Solidity developers have a lot of knowledge at hand. If you haven’t acquired it yet, don’t develop multi-million dollar projects. world knows they are useless. “
Similarly, fellow DeFi Bent Finance platform, known for its yield farming and staking capabilities, also suffered a malicious exploit this week worth 440 Ether (ETH), or just over $ 1.6 million at the time of writing.
1 / There was an exploit from the bent deployer address, it added balance of cvxcrv and mim to an address on an unvierifed update 20 days ago. We just discovered this today. There are multiple members on this team and we will make this right.
– Bent Finance (@BENT_Finance) December 21, 2021
There was an exploit of the folded deployer address, added the balance of cvxcrv and mim to an address in an unverified update 20 days ago. We just found this out today. There are several members on this team and we are going to do well.
Token performance
Analytical data reveals that the total value locked in DeFi has increased by 15.74% over the course of the week, reaching the figure of $ 142.58 billion, thus exceeding the losses recorded in the market crash last week.
Data from Cointelegraph Markets Pro and TradingView Reveals Top 100 DeFi Tokens by Market Cap have been mostly bullish in the last seven days.
Yearn.finance (YFI) posted a two-week profit at 53.28%. Terra (LUNA) rose 36.6%, while Aave posted gains of 34.2%. Curve DAO Token (CRV) and Compound (COMP) came in fourth and fifth this week at 28.6% and 15.4%, respectively.
Thanks for reading our roundup of this week’s most shocking news from DeFi. See you next Friday to learn more stories, knowledge and education in this dynamically advancing space.