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Decentralized finance, otherwise known as defi, has increased significantly in value this year, as the total locked-down value (TVL) in defi today exceeds $ 14 billion. Meanwhile, numerous defi platforms are being attacked with flash loans and there are so many new defi projects that it is difficult to keep track of them. Additionally, while many Defi supporters claim these platforms offer greater privacy, examples now show that almost anything can be seen on the chain that connects Ethereum addresses to identities and businesses.
Exploits and flash loans are becoming commonplace in the country of decentralized finance
In 2020, defi has exploded and today there are billions of dollars in a myriad of platforms and applications offering a new type of financing. The growth defi he has seen is unheard of and resembles the days of the Initial Coin Offering (ICO) in 2017. One of the biggest differences, however, is that many defi projects are more than just white papers and tokens, as numerous applications such as Maker, Uniswap, Aave, and others have offered varying degrees of utility.
On 22 November 2020, statistics show that the TVL defi has passed the $ 14 billion mark. At the end of August, the aggregate TVL of the defi ecosystem was just $ 7 billion, meaning the defi economy doubled in just three months. Massive growth isn’t without problems and even brazen defi scams. It appears that a myriad of defi projects have been drained by experienced Ethereum users, liquidating the capital via complex flash loans.
when the next defi exploit?
– i.am.nomad (@IamNomad) November 21, 2020
This week alone, news.Bitcoin.com reported on two major flash loans, after reporting these attacks on multiple occasions in advance. Five days ago the Value Defi project saw a flash loan attack who embezzled $ 6 million in DAI. This was after the team tweeted that the project called for a “prevention of flash loan attacks” and subsequently deleted the tweet. Flash loans and defi exploits have happened so much that it has become a regular business.
On November 21, 2020, the popular Twitter account “I am nomad” asked his 65,000 followers when the next defi exploit would be in a three-choice poll. The three choices included “today”, “tomorrow” and “within seven days”. Well, not long after the tweet, The Block’s research director Larry Cermak he answered to the tweet.
“That was fast,” Cermak replied, sharing an article on the Defi Pickle Finance platform that is leveraged for nearly $ 20 million.
The Lidless Eye and Onchain transactions
Also, a few days earlier, the Twitter handle @ n2ckchong (Nick C) shared an interesting perspective of how much of the world can be seen on the chain.
“The nice (and a little scary) thing about defi is that we can see everything happening on the chain and link addresses to identities and companies,” Nick C tweeted on Wednesday. In the Twitter thread, Nick C shows a breakdown of ether addresses stemming from Three Arrows Capital (3AC), Jump Trading and Polychain Capital.
The first tweet claims that 3AC is one of the “largest suppliers of compounds” and also notes that 3AC has $ 100 million in WBTC, $ 50 million in ETH and $ 6 million in DAI stablecoin. “3AC also supplies 275 YFI and $ 13 million in LINK to Aave and grows SUSHI with 1.5 million newly acquired SUSHI,” said Nick C. “3AC [also] acquired 351k LINK during [the] recent decline, “he added. In another tweet, Nick C analyzes some apparent estimates of Polychain Capital’s defi stock.
“Polychain Capital has been YFI’s largest buyer in recent weeks,” he further wrote. “They have acquired 570 YFIs (~ 2% of the total offer) in the past five weeks at an estimated cost of $ 12 ~ 14k. They also own 48,000 ETH and 1,315 MKR at this address,” explained Nick C. The Twitter thread provides also a file break down of Jump Trading’s defi action and Nick C notes that Jump Trading is “a massive Chicago-based prop trading company.” The researcher went on to add:
[Jump Trading] they are also big investors in Ethereum tokens.
Nick C’s insights earned him a large number of Twitter followers after sharing his thoughts on the three companies and the action defi. After posting the thread, Nick C got a few thousand followers and him She said he “would continue to post high-signal content when I have the time.”
The perspective Nick C shared on Wednesday shows how the defi economy displays highly visible content on the chain, and is far less private than most people think.
What do you think of all the defi exploits these days and the visibility of million dollar onchain transactions and exchanges? Let us know what you think about this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, Twitter, LOTR,
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