Welcome to Finance Redefined, your weekly dose of basic decentralized finance (DeFi) insights – a newsletter set to bring you important developments over the past week.
The second week of November could have been a bullish week, as CPI data released on November 10 indicated a lower-than-expected rate of inflation. This led to a massive rally in traditional stocks, but the cryptocurrency ecosystem is currently fighting its own demon.
One of the top 10 cryptocurrencies and one of Bankman-Fried’s largest investments has lost 32% of its market value over the past two days.
Chainlink Labs said it will offer Proof of Reserve services to embattled exchanges. The new concept came to light after the collapse of the FTX exchange as a measure that can restore confidence in cryptocurrency exchanges through greater transparency.
The DeFi ecosystem has also faced criticism for denying user access based on wallet content. Entrepreneur Brad Mills has criticized the so-called decentralized ecosystem and said that DeFi has rebuilt everything wrong with Wall Street on the blockchain.
It was a bloodbath on Crypto Street last week, with the majority of the 100 largest DeFi coins trading in the wake of the FTX turmoil.
Solana TVL drops 32.4% as FTX disruption rock ecosystem
The Total Value Locked (TVL) on Solana’s chain dropped 32.4% in the past 24 hours, as emerging news of the FTX crash sent waves through the crypto ecosystem.
According to DefiLlama, at the time of writing, Solana’s TVL has fallen to $423.68 million, down 32.4% in the last 24 hours, a far cry from its all-time high of $10.17 billion on November 9, 2021.
Chainlink Labs offers a Proof of Hold service for trapped exchanges
Chainlink Labs showcased its Proof of Reserve product as a solution to future trust issues in the cryptocurrency exchange market on November 10. In a thread on Twitter, Chainlink Labs asked, “Will crypto continue to repeat the mistakes of the traditional black box in the financial sector? Or will a better system emerge?”
As an answer to this question, it introduced the Proof of Reserve product, which it said is useful for “checking central exchange asset reserves, off-chain bank account balances, cross-chain collateral, real-world asset reserves, and much more.”
DeFi is facing criticism for denying user access based on wallet content
While DeFi is expected to be an upgrade to traditional financing mechanisms, some believe that denying users access to decentralized exchanges based on their wallets is a step backwards.
In a tweet, entrepreneur Brad Mills criticized DeFi for blocking users from accessing decentralized exchanges due to various factors such as location and wallet content. For this reason, Mills described the future of Web3 as a “total surveillance code” and said that it rebuilt everything wrong with Wall Street but on the blockchain. Within the tweet, Mills also shared an image of a popup message from the 1inch network’s decentralized app restricting access due to the wallet address used.
Report: The GALA token exploit resulted from a public private key leak on GitHub
According to a new post released by blockchain security firm SlowMist on November 7, last week’s token exploits affecting the GameFi Games Gala Games project appear to have resulted from a public leak of applicable security keys on GitHub. As told by SlowMist, pNetwork, the cross-chain interoperability bridge used by Gala Games on the BNB Smart Chain, had three distinct roles in its pGALA smart contract.
SlowMist went on to explain that both the DEFAULT_ADMIN_ROLE and MINTER_ROLE roles were controlled by pNetwork during initialization. Meanwhile, the agent management contract was an externally owned title responsible for upgrading the pGALA contract. However, the company posted a screenshot claiming that the plaintext private key of the proxy owner’s address was exposed and publicly displayed on GitHub.
DeFi Market Overview
Analytical data reveals that the total value of locked DeFi has fallen to $41 billion. Data from Cointelegraph Markets Pro and TradingView shows that the top 100 DeFi tokens by market cap suffered a downward crash due to the FTX saga, with the majority of tokens posting double-digit losses over the past week.
Thanks for reading our roundup of this week’s most impactful DeFi developments. Join us next Friday for more stories, ideas, and education in this dynamically evolving space.