Understanding Flash Loan Attacks, and How They Happen
Earlier this year, DeFi protocol Aave released a new feature called “flash loans” that have taken arbitrage opportunities to the next level. Many in the community were unaware of the power that flash loans have to manipulate markets and were shocked to find out that several “hacks” have occurred, with the perpetrators getting away with millions of dollars worth of cryptocurrency. Just recently, four flash loan attacks have occurred on various protocols, with attackers taking $25M, $7M, $3.3M, and $2M from Harvest, Value DeFi, CheeseBank, and Akropolis, respectively. So what are flash loans, how were they used to carry out these “attacks” and were these even “attacks” at all? While those who lost money certainly have cause to be upset, in most cases these protocols were working the way they were designed — begging the question, “Were these even hacks at all?” …
What the DVM is, and How You Can Participate
What are Oracles?
Blockchain oracles are specialized services that provide smart contracts with information outside of the blockchain world. As such, they are the connection point that give blockchains inputs on real world events, non-crypto asset prices, and so on. This type of “off-network” data is crucial for various types of contractual agreements, as these real world events may be the trigger for transactions. Oracles are a crucial part of the blockchain ecosystem, and without them, smart contracts would be limited to the data within their own networks.
There you have it: oracles are the data feed to smart contracts. But there are different types of oracles designed for various purposes. Everything from hardware sensors to people with special knowledge can be used to serve this purpose. Different types of oracles have different features, such as: source, direction of information, and trust. Is the information generated from software or hardware? Is it “inbound” or “outbound”? Is the source centralized or decentralized? All of these questions must be answered in order to determine the right type of oracle to use. …
Understanding the Risks
Regardless of the market, if you have been involved in trading for any amount of time the concept of “liquidation” is certainly a familiar one. However the context that many have heard this term used probably refers to “getting rekt” with leveraged trading on platforms like Bitmex. In those cases, liquidation means that an entire position was lost, resulting in 100% losses that cannot be recovered. Liquidation in DeFi is a completely different beast, and the maths behind it can be confusing. …
UMA protocol has just completed its second “rollover” of uUSD assets after expiration. Naturally, many questions arose regarding LP strategies and how to avoid slippage and price premiums. There has also been a lot of confusion surrounding Balancer pools and the risks therein. In this article, we’re going to:
Discuss how to provide liquidity to uUSD pools and “avoid premiums”
UMA Liquidity Mining — Slippage and Premiums
As the UMA project continues to grow, so do the number of new community members seeking to participate in Synthetic Asset creation, specifically — yield dollars. Though yield dollars resemble something like a stable coin, there are a few key differences that must be understood in order to safely use them. Namely, these differences are collateralization, expiration, and redemption. In this article, we are going to discuss the differences between yield dollars and stablecoins and look at a few key examples of the various ways to use them.
Let’s get started.
What is a yield dollar?
As some of you may be aware, an exciting new proposal has been created by members of the community, and we wanted to take the time to explain it and its potential benefits. To read the formal proposal, please use the following link:
Current BAL token distribution is set to 145k coins per week. At current valuation, this is about $2.9M, distributed to liquidity providers across all Balancer pools. The proposed change would designate 45k of these coins — about $1M of value per week — specifically to certain BAL pools. …
**This article explores the recent exchange closures, the recent CryptoBridge KYC fiasco, and the current state of the Masternode market. Read to the end to see where we go from here. **
The Exchange Apocalypse of October 1
At 6:05 AM UTC on October 1, news broke from CryptoBridge that it would be requiring KYC of all of their users, effective immediately. Less than two hours later, CoinExchange announced the closing of their exchange, citing economic reasons as the reason for the closure. Shockingly, around the same time the long-standing Nova Exchange announced their closure on the landing page of their site, allowing users one week to withdraw their funds. At the time of this posting, Nova Exchange is officially closed. …
Anyone who has stepped foot into cryptocurrency investment knows that the space is rife with scams and fraud. This is especially so in the Masternode market, where scammers are easily able to create new coins again and again through forking PivX. Masternode coins are cryptos that operate using a Proof of Stake algorithm with a tiered network. As such, there is no “work” or miners required for investors to receive rewards. Instead, coins must be purchased either off of an exchange or through a private presale, providing a particularly attractive route for scammers to steal BTC.
This typically happens one of two ways: either the presale money is stolen directly and projects are abandoned, or the scam dev retains a “premine” of coins, which are dumped onto the exchange at some point in time. As a result many masternode projects have dumped heavily. While many people attribute these dumps to high coin inflation rates, the purpose of this article is to suggest that there may be more at play. The information presented in the following paragraphs is a result of over one year of observation of the market, and are the opinions of the author. Please do your own research before making any investment decisions, and do not base your decisions solely on this article. …