Optimism Fixes “Critical Bug” Discovered By Outside Developer

Key Takeaways

  • Optimism, a popular Ethereum Layer 2 scaling solution, has patched a major vulnerability in its network.
  • The team was alerted of the vulnerability last week by a developer named Jay Freeman, also known as “saurik.”
  • He was awarded the maximum possible bounty award of more than $2 million.

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Optimism has fixed a “critical bug” in its Geth (Ethereum’s most popular implementation) fork. The bug was discovered by Jay Freeman, the developer behind both Cydia and Orchid Protocol, who informed Optimism about it on Feb. 2 and was subsequently awarded its highest bounty. 

Optimism Bug Fixed

Large losses may have been avoided by a simple bug discovery. 

Optimism, the fourth-largest Layer 2 Ethereum scaling solution by total value locked, announced today that it had patched a critical bug in its Geth fork that had been discovered by developer Jay Freeman. Freeman was awarded the maximum bounty award of more than $2 million for alerting Optimism of the vulnerability.

If exploited, the bug would have allowed for ETH to be repeatedly created on Optimism through “triggering the SELFDESTRUCT opcode on a contract that held an ETH balance.” The SELFDESTRUCT function allows for the destruction of certain Ethereum smart contracts. 

The bug was never exploited, though it might have been triggered by an Etherscan employee by accident. No “usable ETH” was created upon this accidental triggering, though. 

A fix for the vulnerability was tested on Kovan, Optimism’s test net, and then deployed on the network’s mainnet—as well as on its infrastructure providers and forks—within hours after confirmation. The network remained operational throughout. 

To patch the issue, Optimism developers shared a private patch with “key parties” immediately. After the patch was revealed as successful, it was “publicly released…hidden in an inconspicuous commit.” The team had to go about the patch fix and release with care due to the growing number of parties in the protocol’s ecosystem: various bridges, providers, and mainnet forks. This complexity contributes positively to decentralization but makes releases, especially security releases, more difficult, said the team. 

The bounty Optimism pays for whitehat hackers is based on the threat level posed by the bug—in this case, Freeman received the maximum possible award. 

Vitalik Buterin has discussed the importance of Layer 2’s for Ethereum’s future in order to combat the networks’ high transaction fees that, he said, made the network “not ready for direct mass adoption” on Layer 1. Last November, he introduced EIP 4488, an Ethereum improvement proposal focused on reducing gas fees even on Ethereum Layer 2 scaling solutions. 

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies. 

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Bitstamp Becomes Official Crypto Exchange of Esports Organization Immortals

Bitstamp has struck a three-year partnership deal with U.S. professional esports organization Immortals to be the official cryptocurrency exchange of the gaming company.

Bitstamp Collaborates With Immortals

Immortals announced the news of the collaboration via a press release on Wednesday (February 9, 2022). According to the statement, the deal will also make Bitstamp a founding member of the esports organization.

The partnership aims to educate the Immortals community about the crypto industry while also creating incentives for fans. This is Bitstamp’s second collaboration with an esports brand, the first being with the London-based Guild Esports, in a sponsorship deal worth £4.5 million ($6 million).

Meanwhile, Bitstamp and Immortals will be jointly involved in various initiatives. One of them, called Team Bitstamp, involves content creators who would act as the exchange’s brand ambassadors. The team will provide fans with content, exclusive crypto giveaways, and interactive livestreams.

Immortals Invasion is an initiative formed in celebration of the upcoming League of Legends World Championships in North America later in 2022. There will be vlogs, in-person gaming activations, and more engagements launched by Immortals and the Immortals Progressive League of Championship Series (LCS) team to celebrate the League of Legends community.


The final initiative, Immortals LCS Trigger Program, will see Bitstamp offer cryptocurrency giveaways. Each time Immortals draw the “first blood” in any LSC game, fans get a chance to be rewarded with digital assets.

Growing Link Between Crypto and Esports

Commenting on the collaboration was the CEO of Bitstamp USA, Bobby Zagotta, who said:

“Our partnership with Immortals is an extension of our mission to empower our customers by creating a more authentic experience between crypto and gaming. The esports community is diverse, passionate, and highly-attuned to the digital evolution. It is among the first to explore the integration of digital assets within their industry.”

Furthermore, the partnership between Immortals and Bitstamp will explore future non-fungible token (NFT) activations and cryptocurrency integrations.

According to a statement from the Immortals’ CEO Jordan Sherman:

“This partnership will further enhance the Immortals fan experience with real, tangible benefits that connect the crypto and gaming worlds.”

More cryptocurrency companies continue to capitalize on the esports industry to foster mass crypto adoption, leading to several partnerships between both industries. In September 2021, Crypto.com signed a five-year partnership deal with U.K.-based esports organization Fnatic, worth over $15 million, to become the brand’s global cryptocurrency partner.

Later in November, the digital asset exchange also became the official global cryptocurrency partner of esports tournament series Twitch Rivals, operated by live-streaming platform, Twitch. Blockchain project Tezos entered a three-year partnership deal with French esports brand Team Vitality to revolutionize fan engagement.


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Dogecoin (DOGE) Competitor Shiba Inu (SHIB) Announces New Metaverse Project

Memecoin and Dogecoin (DOGE) rival Shiba Inu (SHIB) is selling virtual land in their recently announced metaverse.

In a new announcement, Shiba Inu introduces Shiba Lands, virtual real estate in the Shiba Inu Metaverse.

“We are happy to announce and proudly introduce Shiba Lands! These ‘lands’ found inside our Metaverse will be available for purchase/auction really soon, and it will be our first step towards allowing the community to jump into the Metaverse prior to its full release!”

Holders of the Shiba Inu ecosystem token Doge Killer (LEASH) will have priority access to the virtual lands, which is being modeled off of other metaverses such as Decentraland (MANA) and The Sandbox (SAND).

“This queue allows exclusivity by requiring interested parties to hold ‘LEASH,’ which gives priority and exclusive access to this first selling phase of the land plots in our Metaverse. 

In addition to the queue, we also have worked on an anti-dump system in order to protect LEASH holders. The remaining lands will then unlock, and become available for the public after this exclusive selling process finalizes.”

In response to the news, LEASH jumped 60% in price from $1,178 to $1,893. Doge Killer has since evened out to $1,782, up 123.7% over the last week.

The announcement also says the official name of the Shiba Inu Metaverse will be dropping soon.

“Like everything Shib does, we will lead this Metaverse sector. At this time, our early phase of development continues for the Shiba Inu Metaverse – Codename: Shiberse. 

(Note, we are have not released the name of the Metaverse as of yet for a reason, but expect it to drop this month!)”

SHIB has been largely unaffected by the announcement in terms of price action. Shiba Inu is currently trading for $0.000032, down 3.6% in the last 24 hours but up 55% over the last seven days.

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JPMorgan Puts Bitcoin At $150,000 In The Long-Term, But What About Its ‘Fair Value’?

Bitcoin has been on another recovery trend since this past weekend. It has continued on this path which has seen its balance above $44K. For most, this is a low value given that the digital asset was at $69K a few months ago. However, for JPMorgan strategists, this is not the case. Even at the current price which bitcoin has struggled hard to attain, strategist Nikolaos Panigirtzoglou believes that BTC is still overvalued.

Bitcoin Fair Value Is 12% Less

In a recent research note from JPMorgan, strategist Nikolaos Panigirtzoglou and others share thoughts around bitcoin. Even though the strategists are not particularly bearish on the digital asset, given their long-term outlook, they still believe that bitcoin is slightly overvalued. However, the value which Panigirtzoglou places BTC at is not that far from its current price, so it may be that bitcoin is following closely to what is expected.

Related Reading | Crypto Winter Is Thawing With Bitcoin And Ethereum Rebound Signal

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The team, led by Panigirtzoglou, places bitcoin’s ‘fair value’ at $38,000. The digital asset has since beaten this price point and left it in its rearview mirror, but the JPMorgan strategists say that this is where the asset should be trading at.

The strategists calculate the fair value of bitcoin using its volatility compared to that of gold. Currently, BTC’s volatility is roughly four times that of gold. However, when this volatility differential narrows to three times that of gold, the strategist explains that its fair value will then rise to $50,000.

“The biggest challenge for Bitcoin going forward is its volatility and the boom and bust cycles that hinder further institutional adoption,” the note read.

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Bitcoin price chart from TradingView.com

BTC gains $1K in hours | Source: BTCUSD on TradingView.com

Putting BTC At $150,000

JPMorgan has always held a more bullish outlook for bitcoin in the long-term compared to the short-term. Last year, the strategists had put the price of BTC in the long term at $146,000. This had come at a time when the bull rally was in full bloom. At the same time, the strategists had put the price of the digital asset at $73,000 in the short term, a price mark that the asset is yet to hit.

Related Reading | Bitcoin Whales Wreck Bears, This Is What Happened Last Time They Were Active

This time around, the strategists have moved up their expectations for the digital asset. Despite the bearish short-term outlook, the market strategists believe that bitcoin will go as high as $150,000 in the future. They, however, did not provide a time frame for this, but they have previously said that they expect BTC to hit $73,000 in 2022.

Bitcoin has fluctuated between $43,000 and $44,000 in the past 24 hours. The asset fell as low as $43,600 in the early hours of Thursday but quickly picked back up, gaining over $1,000 in value in a matter of hours. It is currently trading at $44,631 at the time of this writing, up 2.36% in the last 24 hours.

Featured image from The Guardian, chart from TradingView.com


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Ransomware Payments in Bitcoin and Other Crypto Hit at Least $600M in 2021: Chainalysis

In brief

  • For now, Chainalysis estimates $602 million in ransomware payments from 2021—less than for 2020.
  • But it expects the final number to rise substantially.

Chainalysis—a blockchain data firm—has found that value stolen through crypto ransomware attacks likely rose from 2020 to 2021—it just hasn’t accounted for it all yet. 

According to a preview of the company’s 2022 Crypto Crime Report, it’s identified $602 million in ransomware payouts for 2021, compared to $692 million for 2020. However, it believes the 2021 figure to be an “underestimate” given that it has revised its initial 2020 estimate upward by nearly 50%.

“Anecdotal evidence, plus the fact that ransomware revenue in the first half of 2021 exceeded that of the first half of 2020, suggests to us that 2021 will eventually be revealed to have been an even bigger year for ransomware,” the report states.

Ransomware is a type of malicious software that blocks access to computer files until the attacker’s requests are fulfilled. Hackers often ask for hundreds of thousands or millions of dollars in funds—typically paid in cryptocurrency so it doesn’t have to go through traditional payment routes. There are various versions or types of ransomware, called “strains.” 

According to Chainalysis, the Russian-based group Conti was easily the biggest ransomware strain last year in terms of revenue. Using a ransomware-as-a-service model (RaaS), Conti operators extorted over $180 million from their victims. 

DarkSide was also listed. It’s the strain that perpetrated the infamous attack on the U.S. Colonial Pipeline, leading to fuel shortages in some areas. The company was forced to shell out $5 million in Bitcoin to their hackers at the time. Throughout the year, DarkSide seized at least $75 million in similar hacks.

Since cryptocurrency payments are peer-to-peer, hackers are continuing to abuse them as a method of escaping interruptions from third-party intermediaries. In traditional finance, banks and payment providers can not only reverse criminal transactions, but also easily identify those users and ban them from their platforms. 

Yet that doesn’t make Bitcoin a criminal paradise either. In fact, thanks to Bitcoin’s public blockchain, the U.S. Justice Department was able to track and seize almost half of the money DarkSide stole from the pipeline. That’s why some ransomware attackers choose to use privacy-based coins such as Monero to facilitate these transactions instead.  

The number of active strains in 2021 rose to 140, up from 119 in 2020, and just 79 in 2019. The activity of most of these strains “comes and goes in waves,” Chainalysis identified Conti as the only strain that stayed active throughout the year.  

Along with the number of strains, average ransomware payment size also increased in 2021, up to $118,000 from just $88,000 in 2020.


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Internet Guru Tim O’Reilly: Crypto and NFTs Are ‘Pretty Serious Speculative Bubble’

Tim O’Reilly, the internet guru and the man who coined the term Web 2.0, does not sound like a big fan of Web3

On Wednesday, O’Reilly appeared on CBS Moneywatch and discussed crypto, blockchain, and the rise of Web3, the term for the next wave of the internet built on decentralized blockchain networks and platform-specific tokens.

Underlining the general theme of the interview, O’Reilly was asked about Web3 and what the future may hold for it. “The metaverse itself is full of bubble hype,” he answered. “The Meta Quest2 [the VR headset previously called Oculus], they’re selling a bunch of ’em, but the technology is a long way from prime time,” he said.

And while O’Reilly recognizes that the cryptocurrency and NFT space is booming, he believes its growth may be unsustainable: “… I believe that it really is a pretty serious speculative bubble on a very small foundation,” he said.

The NFT market, in particular, exploded over the last year. In 2021, NFTs—tokens that represent ownership over digital assets—generated more than $25 billion in sales, according to figures from DappRadar. The previous year, NFTs accounted for less than $100 million in sales. That’s led to companies like OpenSea, the most popular marketplace to buy and sell NFTs, to raise millions of dollars from investors.

OpenSea last month hit a $13.3 billion valuation following a $300 million Series C funding round. It also had its best month yet in terms of trading volume, topping $5 billion in sales. Yet the exchange only has 600,000 total users, claims O’Reilly, which corresponds to monthly figures tracked by Dune Analytics.

“We won’t know what Web3 is until after the current bubble pops—because we’re in the middle of a bubble, just like the dot-com bubble, where there’s all kinds of crazy startups getting outrageous valuations, with less to show for it,” O’Reilly told CBS Moneywatch.

While the tech guru said the market built around Web3 should “get ready for the crash,” he also offered some optimism for what he thinks comes after: “… Once you get those bubble valuations, it does attract a lot of capital and talent—and people may start really building something on top of it.”


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Digital yuan transactions beat out Visa at Winter Olympics venue: report

On the day of the opening ceremony of the Beijing 2022 Winter Olympics, there were reportedly more transactions made in China’s central bank digital currency than those through Visa.

In a Wednesday report from the Wall Street Journal, a person familiar with the matter said transactions in digital yuan significantly outnumbered those of Visa on Feb. 4 at the Beijing National Stadium, also known as the Bird’s Nest — the location of the opening ceremony of the 34th Olympic Winter Games. However, many of the retailers allowing purchases with China’s central bank digital currency, the digital yuan — or e-CNY — were outside the Olympics’ quarantine “bubble” for athletes, journalists, and staff.

According to the report, those within the bubble have the option of paying for goods or services with cash, Visa, and digital yuan, and there are many automated machines allowing people to exchange fiat currency for e-CNY. Coupled with the likely intention of reducing contact between individuals in an effort to prevent the spread of COVID-19, it seems the country’s digital currency is pulling ahead of Visa — at least in an environment with limited use cases that includes participation from Chinese consumers.

“Replacing cash with digital yuan for payment can effectively reduce direct contact between people and the risk of the spread of Covid-19,” reportedly said the Beijing Organizing Committee for the 2022 Games.

Though payments using mobile apps like Alipay, WeChat Pay, and others are generally accepted at many retailers in China, these methods aren’t allowed at the Winter Games due to an exclusivity contract with Visa. The credit card company has reportedly not pushed back against the digital yuan payment options, possibly because it is awaiting approval of a domestic license application to operate in China.

CNN reported on Jan. 31 that the first international test run of China’s CBDC is facing hurdles due to the pandemic, with officials limiting the number of people allowed to enter the country. Though China hasn’t released data on the number of digital yuan transactions or athletes using the CBDC, U.S. lawmakers have warned Americans participating in the games of the potential dangers of testing the digital currency, including threatening U.S. interests in cross-border payments.

Related: China’s central bank releases pilot version of digital yuan wallet

At the time of publication, Cointelegraph was unable to find any reports of athletes claiming to have used the digital yuan for food or other essentials. The Wall Street Journal reported both the president of the Dutch Olympic Committee and a former Beijing resident now involved in television coverage of the games implied there was little point in using the digital currency when Visa was available. The Winter Olympics are scheduled to conclude on Feb. 20.