Thursday, 20 June 2024

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A week filled with exploits and uncertainty for DeFi: Finance Redefined

A week filled with exploits and uncertainty for DeFi: Finance Redefined

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.

After a bullish April, May was another month of exploits, rug pulls and hacks, bringing back uncertainty to DeFi. The most prominent headline marker in the past week was the Multichain protocol. The cross-chain DeFi protocol’s delayed node upgrade created a spiral impact and tanked its token price by 30%.

The Multichain protocol saga impacted multiple DeFi protocols, forcing Binance to suspend deposits for ten bridged tokens on May 25 after days of stuck transactions.

Multichain aside, the week was dominated by hacks, exploits and rug pulls. A crypto project allegedly ran off with $32 million of customer’s funds, DeFi protocol WDZD Swap was exploited for $1.1 million, and a bug in Aave v2 on Polygon led to the freezing of some assets in the contract.

The top 100 DeFi tokens had another bearish week, with a slight change from the previous week and most DeFi tokens trading red on the weekly charts.

Multichain token plunges 30% on backend upgrade delay

On May 24, the price of cross-chain router protocol Multichain’s native MULTI token fell by 30% in 24 hours to trade at $4.97 when reported by Cointelegraph. It has since dropped under the $4 mark. The sell-off came after users reported their multichain funds had not arrived due to a backend node upgrade “taking longer than expected.”

At the same time, a wallet address linked to layer-1 blockchain developer Fantom Foundation reportedly removed 449,740 MULTI ($2.4 million) from liquidity on the decentralized exchange SushiSwap. Rumors also appear to have fueled the sell-off. In a tweet viewed over 300,000 times since publication, one user wrote, “It’s rumored that the multichain team has been arrested by the Chinese police, with 1.5 billion dollars of contract funds under control.” The same day, blockchain analytics firm Lookonchain reported at least $3 million worth of MULTI outflows linked to smart money accounts.

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Binance suspends deposits for bridged tokens, seeks clarity from Multichain team

On May 25, crypto exchange Binance suspended deposits for 10 bridged tokens after days of stuck transactions that sparked uncertainty surrounding the Multichain protocol.

Affected token pairs include Polkastarter (POLS), Alpaca Finance (ALPACA), (AVA), Spell (SPELL), Fantom (FTM), Alchemy (ACH),…

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