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Coinbase Layer 2 BASE Chain Witness To SwirlLend’s Devastating Rugpull

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In a surprising turn of events, SwirlLend, a prominent DeFi lending protocol, has fallen victim to a devastating rug pull on the Coinbase Layer 2 BASE chain. The incident has left investors reeling in the wake of BASE’s highly publicized mainnet launch and subsequent traction in the market. This alarming occurrence underscores the vulnerability of decentralized financial platforms and the challenges they face in maintaining the security of user assets.

According to a recent report, Coinbase’s Layer 2 BASE chain was rocked by another rug pull involving the meme coin BALD and its associated liquidity pool on the DEX LeetSwap, which operates on the BASE chain. The exploit led to significant losses for users who had bridged their assets to the BALD liquidity pool. This incident has been a dark cloud hanging over BASE’s otherwise successful journey.

BASE Platform Rattles DeFi Landscape

The recent rug pull on SwirlLend has added another concern to the DeFi ecosystem. Blockchain security experts  PeckShield, a renowned cybersecurity firm, have confirmed the rug pull’s occurrence and reported a staggering drop in the total locked value on SwirlLend’s platform. The assets, once valued at $784,300, have plummeted to a mere $49,200. This drastic reduction highlights the extent of the exploit’s impact on the platform and its users.

The exploit’s orchestrator has also bridged many Ether and USDC tokens, further exacerbating the losses. The withdrawal of 140.68 ETH and 32,600 USDC tokens, along with the retention of 92 ETH on the BASE chain, has left investors in a dire predicament.

Investors seeking redress are frustrated, as the exploiter has taken swift action to erase SwirlLend’s presence from social media platforms, including X, formerly known as Twitter. The project’s accounts on platforms like Telegram, Discord, and GitHub have been purged, and even the project’s website has been taken down. This deliberate effort to cut off all means of communication with the exploiter has left investors helpless.

SwirlLend’s fall from grace serves as a sobering reminder of the risks inherent in decentralized finance. As the crypto community grapples with these challenges, it is evident that more stringent security measures and investor education are essential to prevent such rug pulls from recurring.

Related Reading: | Ethereum L2s Beat ETH In Transaction Volume

Ethereum’s Layer 2 Backdoor Sparks Debate On Decentralization

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In a significant revelation, Ethereum’s co-founder Vitalik Buterin has thrust Layer 2 scaling solutions into the spotlight, disclosing a startling truth all Layer 2 projects and rollups, including the likes of Arbitrum and Optimism, possess a backdoor on the Ethereum blockchain. This revelation has ignited a heated debate within the crypto community, challenging the perceived decentralization of these scaling mechanisms.

According to a recent report, all Layer 2 projects and rollups possess a covert entry point into the Ethereum blockchain. This revelation challenges the prevailing belief in the sufficient decentralization of these scaling solutions. The essence of this backdoor lies in the accessibility that developers and project owners have to multisig wallets, enabling them to effect changes to the protocol as required.

This “backdoor” mechanism has sparked a clash of perspectives within the crypto realm. Some view it as a necessary training ground for the Ethereum blockchain, allowing developers to implement modifications when necessary. On the other side of the spectrum, proponents of immutable and fully decentralized protocols advocate eliminating such entry points, emphasizing the core principle of decentralization.

This contentious subject gains momentum by endorsing Chris Blec, a prominent crypto and DeFi analyst. Blec aligns with Buterin’s viewpoint and echoes concerns about decentralizing Layer 2 protocols. Dubbing them “banking 2.0,” Blec predicts these protocols could fall under regulatory scrutiny.

Ethereum’s Layer 2 Decentralization Challenges

The strive towards achieving complete decentralization remains a focal point for Layer 2 projects like Arbitrum and Optimism. However, a backdoor on the Ethereum blockchain casts a shadow on this pursuit. Interestingly, even the most prominent stablecoins in the ecosystem, such as USD Tether (USDT) and USD Coin (USDC), are not immune to similar debates. 

These stablecoins, often considered the bedrock of decentralized finance, possess mechanisms that grant their development teams the ability to freeze assets in response to threats, exploits, or significant security incidents. This underscores a persuasive argument for “centralization for security.”

The dilemma over the backdoor’s presence brings to light a delicate balance that Ethereum’s Layer 2 projects must navigate. Removing this entry point could be fraught with risks, while its continuation challenges the ideals of absolute decentralization. As the discourse unfolds, the crypto community reconciles innovation with the foundational principles underpinning the blockchain revolution.

Related Reading:| Ethereum Developers Face Backdoor Controversy Over L2 and Rollup Solutions

Curve 3pool’s Liquidity Tango: A $175M Summer Serenade Amidst Crypto Currents

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In a recent weekly trends report by Kaiko concerning developments in the cryptocurrency space, one standout statistic has sent ripples through the community. The Curve 3pool, a historically significant source of liquidity for DAI, USDC, and USDT, has encountered a significant drain in liquidity this summer, losing a staggering $175 million. This worrying trend has been predominantly driven by substantial withdrawals of USDC, with users pulling out $125 million of Circle’s stablecoin.

Curve 3pool Bleeds: Summer Liquidity Woes

Notably, the outflow of USDT has remained relatively steady, while a substantial $60 million of DAI has been removed from the pool. What’s particularly intriguing is that within this DAI exodus, $25 million was withdrawn in just three transactions on July 31st, underlining a concentrated movement.

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The stability of USDT amidst this liquidity crisis might raise eyebrows, as it hints at an underlying apprehension towards the token. It could be attributed to the fact that USDT comprises a disproportionate portion of the pool. For instance, the current scenario indicates that burning 1 million LP tokens would yield users 1.027 million USDT compared to 1.026 million USDC.

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Interestingly, Maker DAO recently made a decisive move to bolster its Enhanced DAI Savings Rate (DSR) with a maximum APY of 8%. This strategic decision has spurred a surge in DAI deposits, escalating from $300 million to nearly $1 billion since late July. However, despite this influx, the Curve 3pool hasn’t witnessed a noticeable DAI outflow, except for the three transactions above, nor has it displayed any substantial trade imbalances on Curve or Uniswap.

The amplified DSR presents a compelling reason for users to hold and deposit DAI, yet it seems improbable that it will trigger a surge in DAI volumes. In fact, a glance at total stablecoin volumes year-to-date (YTD) demonstrates a stark discrepancy. USDC boasts 12 times the trading volume of DAI, while USDT skyrockets with over 100 times the volume of DAI.

The dominance­ of stablecoins in the crypto realm re­mains undisputed, especially conside­ring the prevalence­ of stablecoin-denominated pairs on major ce­ntralized exchanges. Howe­ver, amidst this prevailing trend, intriguing e­xceptions have eme­rged, with U.S. exchanges like­ Kraken and Coinbase distinguishing themse­lves. It is worth noting that since July 2022, the me­rging of USDC and USD pairs on Coinbase has blurred the line­ between traditional fiat and stable­coin trading.

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Amid the changing crypto landscape, these­ transformations and patterns play a significant role in shaping the industry’s dire­ction. Meanwhile, the challe­nges surrounding liquidity faced by the Curve­ 3pool raise important questions about the stability of stable­coin pools within a dynamic market.

Related Reading | Cardano (ADA) Price Journey: Analyst Anticipates Breakout Symphony In 2024

Circle’s Web3 Services: A Visionary Strategy For Global Prosperity

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Circle, a promine­nt digital finance platform and issuer of the USD Coin (USDC) stable­coin, recently unveile­d its ambitious plan to offer Web3 infrastructure solutions for the­ cryptocurrency industry. This strategic move was discusse­d by Jeremy Allaire, the­ CEO of Circle, in the X (Twitter) thread on August 11, 2023.

According to Allaire­, as the demand for blockchain-based applications continue­s to surge, Web3 service­s will become a crucial aspect of Circle­’s overarching strategy. He e­mphasized that Circle aims to empowe­r Web2 teams by integrating e­ssential Web3 ele­ments into their existing se­rvices, encompassing tokenization, payme­nts, and financial apps.

Allaire further highlighted that compare­d to the traditional digital money system, the­ cryptocurrency ecosystem is still in its e­arly stages of developme­nt. He underscored the­ importance of both stablecoins as a monetary base­ and digital wallets as software nee­ding further evolution and scalability to cater to billions of use­rs.

Circle’s Web3 Infrastructure Products

Circle has alre­ady launched Programmable Wallets as part of its We­b3 strategy. This innovative product empowe­rs developers to cre­ate and manage digital wallets for the­ir users, simplifying the process of se­nding and receiving payments in cryptocurre­ncies like USDC.

According to Allaire, Programmable­ Wallets is just the beginning of Circle­’s Web3 roadmap. In the near future­, Circle also plans to release­ a software developme­nt kit (SDK) for web application develope­rs interested in inte­grating Programmable Wallets into their proje­cts.

Additionally, Circle aims to offer other e­ssential products such as identity and authentication solutions, data privacy and e­ncryption tools, smart contract orchestration capabilities, as well as gove­rnance and compliance feature­s within the Web3 infrastructure landscape­.

By facilitating frictionless value exchange­ on a global scale, Circle’s mission is to promote e­conomic prosperity. Through these We­b3 infrastructure solutions, Circle aims to accele­rate the transition from Web2 to We­b3 and enable various teams to launch the­ir crypto protocols.

Notably, Circle and Algorand have­ partnered to launch USDC on Algorand’s high-performance­ blockchain platform. This collaboration aims to enhance transaction spee­d, affordability, and scalability for USDC users.

Circle has also obtained a license as a Major Payment Institution (MPI) in Singapore­ in June 2023 despite the­ U.S. SEC regulatory crackdown. This allows Circle to expand its pre­sence in Asia, one of the­ fastest-growing regions for crypto adoption.

Related Reading | HKVAX Carves A Crypto Path: Hong Kong’s Third Licensed Virtual Asset Exchange

Binance.US Boosts Shiba Inu with Enhanced OTC Trading

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Shiba Inu gained a major impetus when Binance.US updated the OTC trading portal and introduced new maximum order limits for SHIB. The move impacted 16 popular cryptocurrencies and 37 trading pairs as it went live on August 10, the blog post read.

The announcement indicated that Binance.US raised the order limit for OTC trading of SHIB to $30,000. This enables traders to execute buy and sell orders for supported SHIB pairs on the Binance US OTC platform, with an upper cap of $30,000.

It needs to be mentioned that Binance and Binance.US are separate legal entities, although they share branding, technology, and ownership. The latter was created to cater specifically to U.S. customers and comply with U.S. regulations.

As outlined in the blog post, the OTC trading portal of the prominent cryptocurrency exchange permits traders to execute significant buy and sell transactions directly. This feature offers the advantage of safeguarding against market disruptions and ensuring that these orders remain confidential and do not appear on a publicly viewable order book.

Moreover, the trading pairs affected by this positive advancement for Shiba Inu users also included SHIB/USDT and SHIB/USDC. Besides SHIB, Binance US raised the maximum order limit for selected BTC, ETH, XRP, DOGE, and ADA trading pairs in its OTC portal. The new maximum OTC order limit for ADA also stood at $30,000. However, the exchange increased the price of BTC and ETH to $300,000.

Binance Added Shiba Inu As Collateral Asset

A few days ago, Binance adopted SHIB as a collateral asset for its “isolated, overcollateralized, and open-term” Flexible lending service. This gave the meme token another boost. Binance Flexible loans enable users to open isolated loan positions, implying, each loan is treated independently. Users can add SHIB as collateral to borrow numerous cryptocurrencies without a fixed maturity date.

Amidst a flurry of attention-grabbing advancements within the meme token ecosystem, SHIB’s social engagement has surged by almost 20%, propelling it to become the emerging standout on various social media platforms including Reddit, Twitter, and Telegram.

Over the past week, Shiba Inu has experienced a 10% increase, attributed in part to its developer team’s introduction of a fresh digital identity service applicable to all of its applications.

Coinbase Sees Surge in Activity Driven by 2023’s Fresh Whale Wallets

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Coinbase has just made its Base platform publicly available, marking the launch mere hours ago. This L2 blockchain represents a pioneering move as it’s the first of its kind to be introduced by a publicly traded company. For Coinbase, this marks a novel avenue for generating revenue. The company will accrue user fees by overseeing its own blockchain operations. Concurrently, the applications developed atop the Base platform will generate an additional revenue stream for Coinbase. A recent analysis report from Nansen has shed light on the fact that a significant number of newly established whale wallets are deeply invested in meme coins across both Base and Ethereum. Regarding the count of these new wallets, the report has underscored:

“22 individuals categorized as ‘Early BASE Whales’ have been identified. Predominantly constituted of new and ‘fresh’ wallets originating in 2023, these investors have made substantial allocations to Ethereum and L2 networks.”

Coinbase’s base and Meme Coins

According to findings from Nansen, the majority of these wallets were primarily engaged with established decentralized exchanges (DEXs) and Layer 2 (L2) bridges. Notable platforms included 1inch, Uniswap, Base, 0x, USDC, and Unibot. Nansen’s research analyst, Jake Kennis, underscored that the substantial engagement with established DEXs, L2 bridges, and the notable presence of Unibot indicated the adoption of Telegram bots and emerging applications.

The analysis highlighted that the on-chain behavior exhibited by these wallets has remained relatively consistent over the preceding 1 to 3 months. Notably, even before the public launch of the coinbase’s Base mainnet, considerable activity related to meme coins had been unfolding. A recent article’s examination revealed that traders had been acquiring tokens such as BALD, COIN, and BASED through DEXes on the network.

Presently, the Base Whales hold Ethereum, while also diversifying their assets into Arbitrum’s native ARB token and the casino token, RLB. Transactions involving meme coins like BALD, TOSHI, and PEPE continue to occur. Intriguingly, another meme coin, named HarryPotterObamaSonic10Inu and denoted by the ticker BITCOIN (distinct from the original BTC), has also managed to capture the interest of these high-volume investors.

Nansen observed that these 22 whales exhibit behaviors intrinsic to the crypto world. All of them have transferred over 100 ETH (equivalent to $185,100) since July 31, which marks the date when Base was accessible to users for direct interaction via a one-way bridge to its smart contract. However, an additional group of users opted to engage with Base upon its official launch day.

Stablecoin Conundrum: Exploring the Enigma of Dropping Supply Despite Adoption

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Stablecoins, with their fixed value proposition, offer a safer haven for investors and users amidst the tumultuous fluctuations of the broader cryptocurrency market. Their utility spans from facilitating seamless cross-border transactions to serving as collateral within DeFi protocols. Consequently, stablecoins like Tether (USDT), USD Coin (USDC), and DAI have experienced considerable adoption, playing a pivotal role in both the crypto trading sphere and various DeFi applications.

While the industry widely celebrated the recent introduction of a stablecoin by PayPal, marking the entry of a prominent American payment company into the cryptocurrency space, the supply of these kind of assets has been on a continuous decline for more than a year.

Stablecoin
Stablecoin Conundrum: Exploring the Enigma of Dropping Supply Despite Adoption 5

Data sourced from The Block reveals that the aggregate supply of these assets began diminishing around the middle of 2022. Throughout 2023, this decline has amounted to approximately 12%, causing the supply to dwindle from $139 billion at the commencement of the year to $122 billion by August. There is a growing belief among certain analysts that this downward trajectory could be on the cusp of transformation, especially in light of PayPal’s foray into the stablecoin sector.

Mark Lurie, the CEO of Shipyard Software, noted that if PayPal manages to effectively demonstrate the practicality of these assets, it would not only underscore their undeniable usefulness but also compel other traditional financial institutions to consider adopting stablecoins in order to remain competitive. Lurie stated, “Should PayPal exhibit a sincere commitment to employing these assets, it holds the potential to significantly accelerate the adoption of stablecoins, thereby acting as a substantial catalyst.”

In essence, while the recent introduction of a stablecoin by PayPal was met with excitement and enthusiasm within the industry, the broader context of decreasing these assets supply over the past year remains an intriguing aspect. The decline, as evidenced by data from The Block, contrasts with the positive sentiment surrounding PayPal’s entrance to the stablecoin market. Nevertheless, experts like Mark Lurie speculate that this scenario might experience a notable shift, particularly if PayPal’s involvement showcases the tangible benefits of these assets, which in turn could stimulate a more widespread adoption across the financial landscape.

Meanwhile, regulatory frameworks appear to be positioning themselves in anticipation of an increased utilization of stablecoins.

In a communication directed at state member banks expressing interest in engaging with “issuing, holding, or conducting transactions involving dollar tokens for the purpose of facilitating payments,” the U.S. Federal Reserve has stipulated that banks must showcase appropriate protocols for addressing liquidity and the potential risks associated with illicit financial activities.

Demystifying Stablecoin Reports

Recently, the central bank unveiled fresh guidelines to bolster its oversight of banks participating in stablecoin-related activities. This initiative, termed the “Novel Activities Supervision Program,” signifies the Federal Reserve’s intention to heighten its monitoring of all banking entities under its purview, with a specific focus on areas like cryptocurrencies, distributed ledger technology, and “technology-centric collaborations with nonbank entities aimed at providing financial services to clientele.” Simultaneously, the UK Treasury has also issued its response to a consultation, updating proposals for a regulatory framework governing systemic stablecoins.

The outlined framework delineates the collaborative supervision approach by the Bank of England and the Financial Conduct Authority concerning the issuance and utilization of stablecoins.

PEPE Coin’s Remarkable Turnaround: 12% Surge Sparks Speculative Interest

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Pepe coin’s exponential surge captured widespread attention in the year 2023. However, in line with the typical trajectory of memecoins, PEPE eventually saw its prosperous phase conclude, ushering in a period of decline. Nonetheless, current circumstances suggest a potential shift in this scenario.

The digital asset observed a noteworthy upswing of 12.6% within a single day, despite its value having diminished by 14.8% over the past month. Alongside its price fluctuations, there has been a marked increase in trading activity involving this meme coin. Recent data reveals a significant surge in trading volume over the past three days, with figures escalating from $53 million on August 7th to $168.8 million on August 9th. This spike in trading volume is likely attributed to heightened buying engagement.

Amidst these unfolding events, a significant investor chose to procure a stake in PEPE. An anonymous entity with substantial holdings took a daring step by investing 1 million USDC, which translates to a sum of $1,000,300, to acquire a noteworthy quantity of 807 billion these tokens. These tokens were appraised at approximately $0.000001239 per individual token.

Popularity Surge: PEPE Captivates a Wider Audience

Simultaneously, the PEPE network was undergoing a revitalized growth in its adoption rate. As reported by IntoTheBlock, PEPE was drawing the interest of a fresh group of investors. The percentage of recently established addresses making their initial transaction among the total active addresses for a specific day surged from 22% on August 5th to 28.65% at present.

PEPE
PEPE Coin's Remarkable Turnaround: 12% Surge Sparks Speculative Interest 7

These collective signs suggest that the asset could potentially sustain its ongoing upward trajectory. However, it’s crucial to recognize that PEPE is currently trading at a value that is 71% lower than its historical peak of $0.00000431.

Coinbase Faces Massive Multi-Chain Asset Exodus: Over $1.6B Flees In A Week

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Coinbase, a leading cryptocurrency exchange, has experienced a substantial net outflow of multi-chain assets (excluding Bitcoin) over the past seven days. The total outflow has exceeded a staggering $1.616 billion, according to data compiled by Nansen, a blockchain analytics platform.

Of particular interest is the revelation that a significant portion of this outflow is attributed to Coinbase Custody, the platform’s specialized service for institutional investors. Coinbase Custody alone accounted for a net outflow of $1.175 billion during the same period. These figures have sparked speculation within the cryptocurrency community regarding the nature of these transactions.

Coinbase Q2 Trading Revenue Declines

Not just this, the company recently unveiled its Q2 earnings report, revealing a narrower loss and surpassing revenue projections. Despite a 12% decline in sales compared to last year’s period, totaling $707.9 million, the figure still outstripped analysts’ expectations of $631.2 million, as per Bloomberg’s survey data.

Notably, the net loss experienced a significant drop, reaching $97.4 million—well below the anticipated $172.9 million and a remarkable improvement from the $1.1 billion loss recorded in the previous year.

While transaction revenue encountered a decline of 50%, plummeting to $327 million from over $655 million in the previous year. This slide was attributed to reduced trading volume on the exchange, which sank from $217 billion to $92 billion YoY, even with a resurgence in cryptocurrency prices.

Coinbase also faced challenges in its interest income, which diminished to $201.4 million from $240.8 million, linked to a $15 billion dip in USDC market value throughout the quarter.

Amid these financial developments, the company’s legal battle with the Securities and Exchange Commission (SEC) took a noteworthy turn. The SEC filed a lawsuit against Coinbase in June, alleging breaches of federal securities regulations, specifically involving 13 tokens the agency deemed as securities. Coinbase countered by asserting that the SEC had wrongly interpreted the nature of the transactions occurring on its platform.

In a statement provided, the exchange defended its position, contending that its operations did not involve investment contracts. The statement emphasized that the digital tokens traded on Coinbase’s platform were commodities, with obligations fulfilled immediately upon token delivery.

Related Reading | Worldcoin: A Promising Launch Week Showcases High Activity and Potential

Ethereum: Whale Burns $4.5M ETH As Community Unravels The Bizarre Move

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Confusion descended on the Ethereum community after a mysterious entity known only by the ENS name nd4.eth sent 2,500 ethers worth over $4 million to a burn address. As a result, the aforementioned coins were destroyed for no apparent reason.

The bizarre move that occurred on July 26 remained obscured from public scrutiny until now when several eagle-eyed on-chain sleuths tracked down the whale’s activity. The details of why or how this happened were still vague as of the time this news was written.

As community members continue to unravel the mysterious incident, Laurence Day, the creator of Wildcat Protocol, began to playfully proclaim that the anonymous user’s gesture has contributed to Ethereum being an “ultrasound” form of money.

Due to an upgrade called EIP-1559, which resulted in burning a portion of transaction fees, ETH gained the potential to become a deflationary asset. This is because the burned fees can outweigh the ETH issued to validators, given enough demand for block space.

This deflationary potential, along with the implied increase in Ethereum’s price given stable demand, led to the narrative of the altcoin becoming “ultrasound” money. Still, many found it amusing when the user’s ENS was registered under phrases like “enditall.eth.” One remarked, “Not gonna lie, is kind of jealous of this level of existentialism.”

According to leading data tracking platform Lookonchain, nd4.eth had previously sent WETH to another burning address [0x00…0000] several times, worth about $8,000. nd4.eth still holds about $3.57 million, which is staked on GMX and GNS.

The Unknown Ethereum Burner Boasts An Impressive DeFi Portfolio

The guy who transferred 2,500 $ETH [$4.58M] to a dead address on July 26th is a whale with 34,287 $GMX [$1.84M] and 311,003 $GNS [$1.43M]. He spent 5,330 DAI to buy GMX and GNS on July 29 and also transferred 34.9 GMX [$1,989] and 600 GNX [$2,733] to the dead address.

An astounding $3.52 million has been allocated to GMX_IO, GainsNetwork_io, and Apecoin stakes at the wallet address nd4.eth. Lookonchain further examined their DeFi portfolio and revealed: GMX: $1.8 million, $11,000 in WBTC, $11,000 in WETH, and $15,000 in USDC. Gains: $1.4M in GNX and $160K in DAI APE Stake: $41K in APE