The last week of October turned bearish for the DeFi market despite the string of hacks, as the majority of the DeFi protocols registered bullish weekly gains.
Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.
After the Mango Markets exploit last week, Compound protocol paused the supply of four tokens as lending collateral to protect it against any price manipulation.
Crypto staking protocol Freeway said one of its trading strategies “appears to have failed,” forcing the firm to halt services earlier this week. October continues to be dominated by DeFi hacks as another DeFi lockup protocol, Team Finance, lost $14.5 million during contract migration, despite an audit clearance.
MakerDAO community voted to approve the custody of $1.6 billion USD Coin (USDC) with the institutional brokerage platform Coinbase Prime.
The top 100 DeFi tokens showed bullish momentum after nearly three weeks of price performance dominated by the bears. Majority of the tokens traded in the green on the weekly charts, with several of them seeing double-digit gains.
After Mango Markets exploit, Compound pauses 4 tokens to protect against price manipulation
Decentralized lending protocol Compound has paused the supply of four tokens as lending collateral on its platform, aiming to protect users against potential attacks involving price manipulation, similar to the recent $117 million exploit of Mango Markets, according to a proposal on Compound’s governance forum that was recently passed.
With the pause, users will not be able to deposit Yearn.finance’s YFI (YFI), 0x’s ZRX, Basic Attention Token (BAT) and Maker’s MKR (MKR) as collateral to take loans.
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Freeway’s withdrawal halt blamed on ‘failed’ trading strategy
Crypto staking platform Freeway pointed at the failure of one of its cryptocurrency trading strategies, along with market conditions, as the leading reason for halting user withdrawals earlier this week.
The crypto yield platform on Oct. 23 announced it was halting various transactions relating to its high-yield Supercharger product, citing “unprecedented volatility” at the time, without giving any more details at the time, which saw its token price plummet.
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Team Finance exploited for $14.5M during protocol migration despite contract audit
DeFi lockup protocol Team Finance said that over $14.5 million worth of tokens were exploited through the Uniswap v2 to v3 migration function on its platform. As told by blockchain security firm PeckShield, the hacker transferred liquidity from Uniswap v2 assets on Team Finance to an attacker-controlled v3 pair with skewed pricing. By locking tokens to the contract, the attacker bypassed existing validation mechanisms and pocketed the huge leftovers as a refund for profit.
Uniswap v3 was designed with better efficiency for liquidity providers (LP) than v2 on its decentralized exchange. However, v2 smart contracts are still operational, and users must interact with a migration smart contract to migrate their LP assets from v2 to v3. PeckShield estimated that the initial attack vector required for this interaction costs just 1.76 Ether (ETH).
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MakerDAO community votes to approve custody of $1.6B in USDC with Coinbase
Coinbase Prime, an institutional prime brokerage platform for crypto assets, announced on Oct. 24 that it has entered into a partnership with MakerDAO to become a custodian of $1.6 billion worth of the stablecoin USDC, of which MakerDAO is the largest single holder.
The MakerDAO community voted to approve the custodianship, which will allow its community to earn a 1.5% reward on its USDC while holding funds with a leading institutional custodian.
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DeFi market overview
Analytical data reveals that DeFi’s total value registered a surge toward the end of October, with the total value locked (TVL) rising above $50 billion at the time of writing. Data from Cointelegraph Markets Pro and TradingView show that DeFi’s top 100 tokens by market capitalization had a bullish week, with the majority of the tokens trading in the green on the 7-day chart, barring a few.
Theta Network (THETA) was the biggest gainer over the past week, registering a weekly surge of 14.68%, followed by Avalance (AVAX) with a 12.85% surge on the 7-day chart. Many other DeFi tokens registered single-digit weekly gains, barring a few that traded in the red.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education in this dynamically advancing space.
