Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.
April saw several hacks, exploits and rug pulls that resulted in a net loss of over $100 million among several DeFi protocols.
Amid the growing memecoin frenzy, the chances of exploits have increased multifold, with WallStreetBets — a popular trading sub-Reddit group — allegedly rugging its users for $635,000 just days after airdropping about $15,000.
DeFi protocol Level Finance was a victim of an exploit resulting in the loss of nearly $1 million. The attacker manipulated a “claim multiple” bug in a Level Finance smart contract to steal more than 214,000 native Level Finance (LVL) tokens from the exchange.
The volume of liquid staking protocols has dramatically risen in the past couple of weeks, overtaking decentralized exchanges (DEXs). From April 13 to May 1, the total value locked (TVL) on decentralized exchanges declined by $1.66 billion, while it increased on liquid staking protocols by $280 million.
Liquid staking solutions now have more TVL than DEXs: DefiLlama
Liquid staking solutions like Lido and Rocket Pool now have a higher total value locked than DEXs, making them the top category of DeFi protocols according to data from the crypto analytics platform DefiLlama.
Liquid staking protocols have just recently taken the top spot. On April 13, $17.19 billion of crypto was locked in liquid staking contracts, compared with $18.89 billion in DEXs, according to archived information. However, DEXs have experienced a $1.66 billion decline to $17.2 billion, while liquid staking solutions have experienced a $280 million increase to $17.47 billion.
April’s crypto scams, exploits and hacks lead to $103 million lost — CertiK
Crypto exploits, exit scams and flash loan attacks did not let up in April, with more than $103 million of funds stolen from crypto projects and investors. On April 30, crypto security and auditing firm CertiK posted an April roundup of crypto exploits, scams and hacks, revealing total funds lost was $103.7 million, bringing total year-to-date losses to $429.7 million.
The month was marred with significant crypto exploits, with $25.4 million lost due to an exploit of several maximal extractable value trading bots on April 3, $22 million stolen in a hot wallet exploit at the Bitrue exchange, and the $13 million hack of South Korean GDAC exchange.
Level Finance confirms $1 million exploit due to buggy smart contract
Decentralized exchange Level Finance experienced a security breach allowing an attacker to steal over $1 million of the exchange’s native LVL token.
Level Finance informed its 20,000 Twitter followers that more than 214,000 LVL tokens had been drained and swapped for 3,345 BNB (BNB), with an approximate value of $1.01 million.
WallStreetBets mod dumps memecoin worth $635,000 in alleged rug pull
A moderator of the popular trading subreddit r/WallStreetBets has dumped a large portion of WSB Coin (WSB), a token project claiming to be the official memecoin of Wall Street Bets.
On May 2, WSB was launched by people involved in moderating the WallStreetBets Reddit forum. The subreddit gained notoriety for the GameStop short squeeze, which sent hedge funds to their knees in January 2021. The creators of the WSB token claimed that there would be no allocation for the team and that 10% of the coins would be reserved for the subreddit.
DeFi market overview
DeFi’s total market value saw a minor increase this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a mixed week, with most tokens trading in the red. The total value locked in DeFi protocols stood at just above $50 billion.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.