Losses from crypto rug pulls outpaced DeFi exploits in May: Finance Redefined
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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.
May was a month filled with exit scams in the DeFi world, with over $45 million lost to exit scams, while exploits on DeFi protocols racked up less than half that amount over the same period.
Uniswap DAO rejected a plan to charge liquidity provider fees as Uniswap (UNI) token holders, citing tax concerns. The proposal would have allowed Uniswap’s governing body to receive a percentage of the fees currently going to liquidity providers.
Jimbos Protocol has offered an $800,000 bounty to the public as talks with the hacker failed. The protocol’s team extended the bounty offer to the public, inviting anyone who could help catch the exploiter or recover the funds to claim the reward. The Fantom network has started paying developers to generate gas fees, and another popular DeFi protocol, PancakeSwap, has entered the GameFi space.
The top 100 DeFi tokens had a bullish last week of May, with most of the tokens recovering from two weeks of bearish pressure. The total value locked in DeFi protocols also rose above $50 billion again.
Losses from crypto rug pulls outpaced DeFi exploits in May: Beosin
The amount of cryptocurrency lost to rug pulls, or exit scams, where founders suddenly up and leave with investors’ money, had outpaced the amount stolen from DeFi projects in May, a blockchain security firm has revealed. A June 1 report from Beosin said total losses from rug pulls and scams reached over $45 million across six incidents in May.
Meanwhile, 10 attacks on DeFi protocols netted just $19.7 million. The amount is an almost 80% decrease from April, with losses from these types of exploits declining for two months, it added.
Uniswap DAO rejects plan to charge LP fees; UNI holders cite tax concerns
On June 1, a proposal to enable protocol fees for the Uniswap decentralized exchange (DEX) failed, potentially allowing liquidity providers to continue to earn all revenue from swaps, according to the proposal’s official webpage. It narrowly failed, with 45.32% of votes going to the “no fee” camp and 42.34% voting to charge liquidity providers one-fifth of the fees they receive from users. Another 12.3% voted to enact a fee charge of one-tenth, with 0.04% voting to charge one-sixth.
The “no fee” camp won by a plurality, implying that supporters of a protocol fee may have prevailed if they had united behind a specific fee percentage.
Jimbos Protocol offers $800K bounty to the public after hacker ignores deal
DeFi platform Jimbos Protocol has offered 10% of the exploited funds to the general public after giving the hacker several days to respond to a deal.
On May 28, the Arbitrum-based DeFi app was exploited, resulting in a loss of 4,000 Ether (ETH). After taking advantage of the lack of slippage control on liquidity conversions, the exploiter was able to swipe assets worth around $7.5 million at the time.
Fantom starts paying developers to generate gas fees
A new program from the Fantom Opera network team will pay developers for the gas fees they generate from users, according to a May 31 announcement. Specifically, the “Gas Monetization Program” will pay eligible developers 15% of the total gas fees their apps generate.
Six Web3 apps have already been approved for the program, including ParaSwap, Beethoven X, Stargate, LayerZero, WOOFi and SpookySwap. These apps have generated over 12,000 Fantom (FTM) in rewards already (worth approximately $3,715), the announcement stated.
Decentralized exchange PancakeSwap moves into GameFi
On May 29, decentralized exchange PancakeSwap announced that it had launched a new tower-defense game in conjunction with BNB Smart Chain-based GameFi protocol Mobox. Dubbed “Pancake Protectors,” the game allows players to utilize the DEX’s native PancakeSwap (CAKE) tokens to earn in-game rewards.
Utilities for CAKE tokens within Pancake Protectors include accelerating the level-up process, purchasing in-game currency, claiming CAKE heroes, staking CAKE to earn resources and unlocking game levels. There will also be an in-game marketplace for trading CAKE heroes, which can be further enhanced by participating in lotteries yielding nonfungible token upgrade rewards.
DeFi market overview
DeFi’s total market value saw a bullish increase this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most tokens trading in the green. The total value locked in DeFi protocols rose above the $50 billion mark.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.
