Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.
The much-awaited airdrop of layer-2 scalability protocol Arbitrum has dominated headlines throughout the week. The hype around the token has led to exploits, fake airdrops and even a significant surge in volume for other layer-2 protocols.
Apart from the Arbitrum hype, the Euler Finance hack has also seen some new developments. The person or group behind the attack returned a portion of the funds after the protocol developers put a million-dollar bounty on their heads. Some of these funds were also moved to blacklisted North Korean addresses.
While we all read a lot about DeFi exploits now and then, a recent report shed light on the millions of dollars in insurance payouts in 2022. Ninety percent of all DeFi insurance claims paid out since inception were distributed in 2022.
In another development around Ethereum staking, MetaMask Institutional has introduced a new staking marketplace to give institutional users access to solo Ether (ETH) staking.
The top 100 DeFi tokens had a mixed week in terms of price action. A majority of them traded in the green on the weekly charts, while a few others lost some gains during the market volatility toward the end of the week.
Beware of fake Arbitrum airdrops, community warns
Ethereum layer-2 scaling solution Arbitrum’s upcoming ARB token airdrop appears to have become a popular target for scammers, with the community warning of hundreds of phishing scams aimed at tricking crypto users. The hype around the airdrop has led to more than a few attempts from scammers to set up fake token airdrops aimed at stealing funds from victims ahead of the official event.
The hype around its airdrop has also helped another layer-2 solution, zkSync, to see significant week-over-week growth. After the Arbitrum airdrop announcement, eligible crypto users are also already selling them in OTC markets.
DeFi insurance payouts amounted to $34.4M in 2022: Report
According to a March 21 report by DeFi analytics firm OpenCover, DeFi insurance companies paid out $34.4 million in claims in 2022. Only $36.9 million of such claims have been paid since OpenCover began tracking the data. Notable payouts include $22.5 million during the collapse of the Terra ecosystem in May 2022 and $4.7 million from the collapse of the crypto exchange FTX in November 2022.
Despite the surge in payouts, OpenCover said only $231 million worth of funds in DeFi protocols had been insured as per its data, representing just 0.5% of the total value locked in the DeFi industry. CoinStreetDaily reported on Jan. 5 that DeFi security exploits rose by 47.4% year-over-year in 2022 to $3.64 billion.
Euler Finance exploit saga sees new developments
Ethereum-based lending protocol Euler Finance could be a step closer to recovering funds stolen in a $196 million flash loan attack last week, with private discussions now initiated with the exploiter.
In an on-chain message to Euler on March 20, days after sending funds to a red-flagged North Korean address, the exploiter claimed they wanted to “come to an agreement” with Euler.
On March 18, roughly 3,000 ETH ($5.4 million) was returned to Euler Finance’s deployer address from the hacker’s address. Blockchain investigator PeckShield identified three transactions that were used to send the funds.
MetaMask Institutional unlocks solo ETH staking marketplace
MetaMask Institutional is set to be an avenue for creating new Ethereum validators after announcing a new staking marketplace for its institutional clients.
Institutions that use MetaMask’s institutional-grade wallet and custody service will be able to manage ETH staking through four vendors — ConsenSys Staking, Allnodes, Blockdaemon and Kiln. The marketplace aims to simplify access and management of solo staking, allowing institutions to become Ethereum network validators.
DeFi market overview
Analytical data reveals that DeFi’s total market value rose above $50 billion this past week. Data from CoinStreetDaily Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most of the tokens trading in green, barring a few.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education in this dynamically advancing space.