Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) information – a newsletter designed to bring you the most important developments of the past week.
This week, Finance Redefined looks at the growing popularity of scalable solutions based on zero-knowledge proofs. Zero-knowledge rollups (ZK-rollups) technology has gained a lot of traction over the past year thanks to its increased use in the Ethereum ecosystem.
Bug bounties are considered a great reward system for white hat hackers to clean up bugs in the DeFi ecosystem, which often fall victim to exploits. However, a recent analysis suggests that these programs have mixed results.
After a series of exploits in the Multichain protocol over the past few weeks, the Connext founder proposed a “sovereign bridged token” standard to prevent future issues and exploits.
Algorand’s decentralized lending protocol is scheduled to end at the end of the year, as the developers claimed that building a lend-and-lend protocol is “no longer a viable path” for the protocol.
The top 100 DeFi tokens had another mixed week in terms of price action, followed by a late rise on July 13, helped by Ripple’s partial verdict in its fight against the United States Securities and Exchange Commission (SEC). , which led to an 84% increase in the price of XRP (XRP).
Ethereum scaling protocols drive zero-knowledge proof usage in 2023
Ethereum scaling protocols dominate the use of ZK-rollups, with major releases, new research, and healthy competition among the highlights of an industry report published by ZKValidator.
The node infrastructure operator’s “State of ZK Q2” report reflects important events across the ZK ecosystem, with notable ZK-powered Layer 2 releases highlighting the technology’s use for scale compared to other market segments.
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Algorand’s decentralized lending protocol Algofi will shut down at the end of 2023
Algofi, the lending and lending protocol based on the Algorand decentralized financial blockchain, will be shutting down soon.
According to a July 11 announcement, developers’ “belief in the strength of Algorand’s technology and novel consensus algorithm has not wavered,” however, Algofi’s platform will soon fade away.
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Bug bounties can help protect blockchain networks, but have mixed results
Bug bounties are programs offered by organizations to incentivize security researchers or ethical or white hat hackers to find and report vulnerabilities in their software, websites, or systems. Bug bounties are intended to improve overall security by identifying and fixing potential weaknesses before malicious actors can exploit them.
Organizations that implement bug bounty programs typically establish guidelines and rules that describe the scope of the program, eligible targets, and the types of vulnerabilities they are interested in. Based on the severity and impact of the discovered vulnerability, they can also define the rewards offered per valid. bug submissions, ranging from small amounts of money to major cash prizes.
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Rodeo Finance based on Arbitrum exploited for the second time, $1.5 million stolen
Arbitrage-based decentralized finance (DeFi) protocol Rodeo Finance was mined for $1.53 million on July 11. The DeFi protocol was exploited using a code vulnerability in its Oracle, leading to a loss of more than 810 Ether (ETH). Rodeo Finance was previously mined on July 5 for around $89,000 due to a vulnerability in its mintProtocolReserves function.
According to data shared by blockchain analytics firm PeckShield, the exploiter then attached the stolen funds from Arbitrum to Ethereum and exchanged 285 ETH for unshETH. The exploiter then deposited the ETH into the Eth2 staking. Ultimately, the exploiter routed the stolen ETH using the popular Tornado Cash shuffling service, which exploiters often use as an egress route to hide the transaction footprint.
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Connext Founder Proposes ‘Sovereign Bridged Token’ Standard After Multichain Incident
A July 7 Ethereum Improvement Proposal (EIP) seeks to standardize how tokens connect between networks. The “Sovereign Bridge Token” standard, or EIP-7281, allows token issuers to create canonical bridges across multiple networks.
The proposal was co-written by Arjun Bhuptani, founder of the Connext bridging protocol. In a social media post on July 7, Bhuptani claimed that the protocol would help prevent issues like the July 6 Multichain incident, which some experts have described as a hack.
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DeFi Market Overview
DeFi total market value saw a bullish rise after three bearish weeks. Data from Cointelegraph Markets Pro and TradingView shows that the top 100 DeFi tokens by market cap had a bullish week, with most tokens trading in the green. The total value locked in DeFi protocols remained below $50 billion.
Thanks for reading our roundup of this week’s most impactful DeFi developments. Join us next Friday for more stories, ideas, and education on this dynamically-advancing space.
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