Ethereum address starting with 0x225d, identified as “1inch: Investment Fund”, has made a substantial swap of Wrapped Ethereum (WETH) for stablecoins USDT and DAI, according to data from DeBank.
Source: Debank
The transaction activity began roughly four hours ago and ceased approximately two hours before the publication of this report. In this time, the 1inch: Investment Fund successfully converted an estimated 24,990 WETH to about 48 million USD worth of stablecoin assets.
As a result of this transaction, the Ethereum balance in the address has been noticeably depleted, now holding a mere 238 ETH.
While it is uncertain what led to the fund’s decision, it could be a protective strategy, hedging against potential volatility in the Ethereum market. Alternatively, this could signal a larger trend in the market, where funds are moving away from ETH due to anticipated bearish trends.
Solana (SOL) became one of the worst performers among the top cryptocurrencies on Feb. 3 as traders assessed its links with the second-biggest hack to date.
$325M worth of wETH gone
SOL price dropped by 5.50% to below $96.50 as Wormhole, a bridge between Solana and Ethereum blockchains, reportedly lost $325 million worth of Wrapped Ethereum (wETH) due to a technical vulnerability.
Prior to the hack on Wednesday, SOL was trading as high as $112.
Solana security hole needs fixing asap?
Seems their consensus proceeds with only 33% of the nodes
Hard math proofs show you need 66%+ for safety. No ifs no buts
Possibilities: 1) is insecure, 2) is centralized, or 3) they’ve broken Computer Science (unlikely) pic.twitter.com/yqfW3QnfeK
— dom.icp ∞ (@dominic_w) February 3, 2022
In detail, hackers tricked a series of Solana’s smart contracts into signing illicit transactions digitally posing as “guardians,” reported blockchain researcher Kelvin Fichter Wednesday night after the hack. He wrote:
“The attacker made it look like the guardians had signed off on a 120k deposit into Wormhole on Solana, even though they hadn’t. All the attacker needed to do now was to make their “play” money real by withdrawing it back to Ethereum.”
And one withdrawal of 80k ETH + 10k ETH later (everything in the bridge on Ethereum), everything was gone.
— smartcontracts (@kelvinfichter) February 3, 2022
Wormhole said that it would add Ethereum’s native token Ether (ETH) “over the next hours” to back wETH on the Solana network on a 1:1 basis. However, the project did not clarify the source of the funds that would be used to buy ETH tokens.
Bear flag triggered
The selloff in the Solana market across the last 24 hours came closer to triggering a bearish continuation setup that may send the SOL price down by another 50%.
Dubbed “bear flag,” the pattern emerges when the price consolidates sideways/higher after a strong downside move, called “flagpole.” In a perfect world, the price eventually breaks below the consolidation range and falls by as much as the flagpole’s length.
So far, SOL/USD has been forming the same bear flag pattern, as shown in the chart below.
SOL/USD daily price chart featuring bear flag setup. Source: TradingView
The downside target put forth by Solana’s bear flag sits near $50, almost halfway down where the SOL price has been trading on Thursday.
Related: Report crowns Solana for using least energy per transaction, but there’s a catch
Last year, Solana sprinted into the top-ten cryptocurrencies by market cap with SOL rising by more than 11,000% as investors bet on the growth of decentralized finance (DeFi) and nonfungible token (NFT) sectors.
However, entering 2022, the SOL price has fallen sharply, wiping almost half Solana’s market capitalization amid a broader crypto market decline — that also battered Bitcoin (BTC), Ether, and other top-ranking digital assets.
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In a now-deleted deleted profile, an anonymous Reddit user allegedly lost close to $500k on Sunday after sending wrapped Ether (wETH) directly into a wETH wrapping smart contract. wETH came into existence as a way for Ether (ETH) to conform to the ERC-20 token standard so that it can be traded directly with altcoins minted on the Ethereum blockchain.
To wrap Ether, users first send ETH to the wETH smart contract address and receive an equivalent token in return. However, to unwrap wETH, users must either swap for ETH on a decentralized exchange like Uniswap (UNI), or call the withdrawal function in the wETH smart contract. Instead, the anonymous Reddit user sent the wETH directly back into the wETH smart contract address in the hopes of receiving ETH back. Unfortunately for the use, this process is the equivalent of “token burning,” resulting in a irreversible loss of the trader’s crypto.
While the user’s identity is no longer available on Reddit, the transaction still appears on Etherscan, showing that 195.2 wETH ($501,358) was sent to the wETH smart at the time of publication contract and therefore lost forever. Most Reddit members were sympathetic with the trader, with u/0150r writing:
“Losing a half-million dollars worth of crypto by mistake is something that needs to be addressed before crypto can become mainstream. When it’s this easy to lose everything, there’s no way your grandma is going to be using it.”
However, others pointed out that the original poster should have done far more to research the technology before using it, with u/jadecrystal writing:
“No, you don’t need to design the technology, but if you don’t have a basic grasp of … a microwave oven, a car’s starter, engine, and steering column… or public key crypto and blockchain addresses, this is what happens.”
The staking contract for the Ethereum 2.0 blockchain is now the single-largest holder of Ether.
According to blockchain analytics provider Nansen, the Eth2 staking contract has surpassed Wrapped Ethereum (wETH) to become the single largest holder of ETH. Unlike Ether, Wrapped Ether adheres to the ERC-20 standard, making it the favored representation of ETH among DeFi protocols that use ERC-20 tokens.
The findings were posted to Twitter by Alex Svanevik, CEO of blockchain analytics firm, Nansen, on Aug. 17. The data shows that the Beacon Chain’s deposit contract holds 6.73 million ETH — worth roughly $21.5 billion at current prices.
By contrast, Nansen’s data suggests the Wrapped Ethereum contract holds 6.7 million ETH ($21.4 billion), followed by Binance with 2.29 million ETH ($7.3 billion).
Check who’s #1 ETH holder now guys! pic.twitter.com/3isDLkrv7I
— Alex Svanevik ✨ (@ASvanevik) August 16, 2021
The quantity of Ether locked staked on Eth2 currently represents 5.7% of Ethereum’s circulating supply, according to CoinMarketCap. There are now 210,000 validators for the Eth2 network according to Beaconcha.in.
Currently, Ether staked on Eth2 is locked up and cannot be withdrawn from the contract until Ethereum’s forthcoming chain-merge that will meld the Ethereum and Eth2 networks. The chain merge is currently expected to take place during the first half of 2022.
According to Staking Rewards, Eth2 is currently the third-largest Proof-of-Stake network by staked capitalization, ranking behind Cardano’s $49 billion and Solana’s $27.5 billion.
Related:Staked ETH Trust opens Ethereum staking to accredited investors
The news comes shortly after a major milestone for Ethereum’s Eth2 roadmap, with the network successfully deploying its London upgrades on August 5.
The hard fork contained the highly anticipated Ethereum Improvement Proposal 1559, which introduced a base transaction fee that is burned from supply into Ethereum’s fee market.
According to Ultrasound.Money, 54,916 ETH worth $175 million have been destroyed through transaction fees in the dozen days since London went live. At a current burn rate of 3.28 ETH, more than 140,000 ETH could be burned each month should network activity remain consistent.
At the time of writing, ETH prices had retreated 3.3% over the past 24 hours to trade at $3,180.
Following China’s bitcoin mining crackdowns, Poolin has suspended rewards for its tokenized hashrate contracts.
The wBTC and wETH rewards are on pause until “less than 60 days”, as per a blog post from Poolin.
Poolin Pauses Rewards For pBTC35A And pETH18C
Poolin’s tokenized hashrate contracts, pBTC35A and pETH18C, have all their wBTC and wETH rewards suspended until less than 60 days.
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The reason behind the move is China’s ongoing crackdown on mining farms, which has forced miners around the country to migrate elsewhere.
The 60-days timeframe correlates to the migration time needed to move mining farms out of China.
As a consequence of the rewards payout suspension, holders are pulling out of the contracts in hordes.
Get 110 USDT Futures Bonus for FREE!
Related Reading | Bitcoin Hash Rate Goes On Death Spiral Post China’s Crackdown On Miners
Here is how the pETH token price and volume chart looks like right now:
pETH price rapidly goes down | Source: Compass Mining Memo
The chart shows that pETH price has rapidly corrected following the announcement.
Similarly for pBTC, the below chart highlights the trend in its price and volume:
pBTC plummets following rewards suspension | Source: Compass Mining Memo
Two other notable takeaways from the graphs are that pETH hit a single-day $2 million turnover in volume for the first time ever, but pBTC only hit a monthly high.
The other high turnovers in pBTC volume were in the months of April and May. The first one corresponds to the coal mine flooding incident in Xinjiang that cut power supply to Bitcoin miners, while the second one was caused by the 21% difficulty adjustment.
The Poolin team plans to pack and transport their mining rigs to another location within 60 days, after which rewards are expected to resume normally.
Related Reading | Institutional Bitcoin Selloff Leaves Retail With Bloody Aftermath
It should be noted that while wBTC and wETH rewards are paused, Poolin is still offering rewards in the Mars token.
Mars is the platform’s native governance token, holders of which can usually vote on decisions relating to the platform.
However, for the decision of cutting out wBTC and wETH rewards, no Mars holder was able to vote. Poolin went forth with the initiative by themselves.
Bitcoin Price
Right now, Bitcoin is priced around $34k, up 2% in the past week, but down 7% in the last 30 days.
China’s latest mining crackdowns are also responsible for BTC’s latest crash. As BTC miners were also forced to shutdown their farms, and migrate elsewhere.
Here is a chart showing the trend in its price:
BTC seems to have stagnated around this point | Source: BTCUSD on TradingView
It’s hard to say where the price will be heading next. There is a possibility BTC is entering a bear market as a never-before wrong signal has been triggered.
The decentralized lending platform built on the Ethereum blockchain,Aavesays thatit will scale itsDeFi platformbeyond its blockchain by joining several sidechains, including Polygon.
Aave Addresses Transaction Fees
Block space supply today is scarce and limited, leading to the massive expansion of assets on the Ethereum blockchain. Since the “DeFi Summer” of 2020, demand for using Ethereum and DeFi has never slowed down, with more than $43 billion of total value locked within the industry’s leading platforms.
While the future ofDeFilooks bright, the demand for Ethereum and DeFi led to high transaction fees. These issues have increased congestion and gas prices, which have affected the projects it initially helped succeed.
Aave acknowledges high fees are a feature of “a successful public blockchain” since they indicate users are willing to pay the price in exchange for services, but alternative solutions are required.
Layer 2 Proof-of-Stake Sidechain
The DeFi lending protocol will port its platform to Polygon, a layer 2 proof-of-stake sidechain — previously referred to asMatic Network— to address the high transaction fees on Ethereum. The sidechain enables users to send back and forth tokens via a bridge protocol, thereby offering lower transaction costs than Ethereum itself provides.
The mechanism on Ethereum will enable tokens from the layer 1 mainchain to be utilized in another blockchain. Still, it can be moved back to the original chain if required.
Aave says that immediately after its platform is available on Polygon, native assets (MATIC) will be added to the collateral list. MATIC, USDC, USDT, WETH, DAI, AAVE, and WBTC are the assets used as collateral on Polygon-based Aave markets at launch.
Aave also noted that it would use a smart-contract bridge to seamlessly port assets from one network to another, soon available. They will have a superior standard of safety for the protocol price feeds since Polygon is a network powered by Chainlink.
Superior Levels
The Aave protocol intends to proceed in putting up synergies with exterior projects to have an Aave Market in all venues that matter. The blockchain firm believes there is no need for a “winner-takes-all” scalability solution, allowing for better freedom of choice for users.
Aave’s integration with Polygon will ensure users enjoy faster transactions, more scalability, and lower gas prices, further boosting the platform to superior levels as the crypto market continues to advance.
The step is the “first wave” in Aave Protocol’s “New Frontiers” analysis mission, aiming to allow it to build synergies with other projects and further expand to a multi-market approach to secure future protocol advancement.
Layer 2is one of the clear trends in the crypto community in 2021. Some other popular Layer 2 solutions at present include Optimism, ZK Sync, Arbitrum, and Starkex.
