August 4, 2022 / Unchained Daily / Laura Shin
Daily Bits✍️✍️✍️
- After the news about Michael Saylor’s stepping down as CEO, MicroStrategy shares jumped around 10%.
- Binance cofounder Yi He will lead the company’s $7.5 billion VC arm.
- Riot, a BTC mining company, was rewarded with $9.5 million for cooperating with the energy crisis last month in Texas.
- The Senate Agricultural Committee introduced a bill that would make the CFTC the primary regulator of crypto.
- Astar Network, a crypto bridge, announced a partnership with Alchemy, a blockchain development platform.
- Celsius wants to rehire its former CFO and pay him $93,000 a month as it goes through bankruptcy.
Today in Crypto Adoption…
- Michelle Bond is running for Congress with the support of FTX Digital Markets co-CEO Ryan Salame.
- Starbucks will unveil its web3 initiative next month.
The $$$ Corner…
- Galoy, the banking platform that supports El Salvador’s Bitcoin Beach Wallet, raised $4 million for a Bitcoin-backed synthetic dollar.
- Hashed, a crypto VC Firm, confirmed losing nearly $4 billion during the collapse of Terra.
What Do You Meme?
What’s Poppin’?
Solana’s Wallets Get Drained as Users Lose More Than $5 Million
The Solana ecosystem suffered a big attack last night, as users started to report that their wallets were being drained. The stolen funds were sent to four different wallets. At the time of writing, more than 10,000 wallets were compromised, with approximately $6 million stolen, as confirmed by on-chain data.
At first, the causes behind the attack remained unclear. However, this was not a hack of the code of a DeFi protocol. It looks like the hackers got the ability to sign the transactions on behalf of the wallet users.It was thought that it was a supply-chain attack (a compromise in a trusted third-party service). But later, Solana Developers claimed to have found the root of the issue and put the blame on the Slope mobile wallet app.
“After an investigation by developers, ecosystem teams, and security auditors, it appears affected addresses were at one point created, imported, or used in Slope,” they said. “While the details of exactly how this occurred are still under investigation, but private key information was inadvertently transmitted to an application monitoring service (…) There is no evidence the Solana protocol or its cryptography was compromised.”
It appears that Slope was sending plain text private key and seed phrases to a server, explained Adam Cochran. “There is absolutely no acceptable design reason for that,” he said.
The hack sparked criticism across the crypto community:
- “All the problems with Terra1 and Solana should really be a wake-up call. “DeFi” has drifted away from cypherpunk principles. Everyone is just trying to get rich fast with no conscience-unpublished code, security by obscurity, centralized interventions to prop up bad designs, etc.,” said Gabriel Shapiro from Delphi Digital.
- “The Solana wallet hack demonstrates why it’s irresponsible not to have open source code in crypto (…) Hundreds of millions lost due to unnecessary IP protection,” said señor doggo.
- “Ethereum hacks take hours to complete and require the entire community to chip in, while Solana hacks clean out your wallet in seconds,” said foobar.
The team behind Solana’s biggest NFT Marketplace Magic Eden recommended users to revoke permissions for any suspicious links and provided a quick guide on how to do it.
The Solana attack was not the only one that occurred this week. Yesterday, Nomad, a cross-chain bridge, suffered an exploit worth $200 million. Sam Sun, a research partner at crypto investment firm Paradigm, explained how it happened and called it a “chaotic” attack.
Furthermore, centralized crypto exchange ZB.com’s hot wallet got compromised and was drained of more than $4 million, according to blockchain security firm PeckShield. “This has been a bad week for exploits,” said Haseeb Qureshi, managing partner at Dragonfly Capital (and host of The Chopping Block).
Recommended Reads
- BitMEX researchers on the possibility of an Ethereum PoW chain
- Tim Betting on Aave
- Polynya on Optimism
On The Pod…
Lyn Alden, founder of Lyn Alden Investment Strategy, and Mauricio di Bartolomeo, cofounder of Ledn, discuss how inflation could affect the digital asset industry. Show highlights:
- how Mauricio’s upbringing in Venezuela and firsthand experience with inflation led him to Bitcoin
- what a “long-term debt cycle” is and why Lyn thinks the 2020s could be similar to the 1930s and 1940s
- the difference between inflation and hyperinflation
- how inflation changes consumer investing and purchasing decisions
- what the impact of inflation is on Bitcoin
- how Russia’s war on Ukraine will continue to impact inflation
- how rising interest rates will affect Bitcoin and stablecoin adoption
- what type of economic environment is worst for BTC growth
- whether Bitcoin is an inflation hedge
- why Lyn is long-term bullish on stablecoins and Bitcoin
- what effect a global recession would have on Bitcoin
- how global inflation has changed adoption rates for BTC in developing economies
- how Venezuelans use and perceive Bitcoin
- why Lyn and Mauricio are excited about Lightning Network in developing countries
- what Lyn and Mauricio think about El Salvador’s adoption of BTC and its billion dollar BTC bond
- how Ledn, as a lending company, was able to navigate the Celsius/Voyager crash
- how Lyn analyzes the risks associated with firms like BlockFi
- what lessons Lyn and Mauricio have learned in 2022 about digital assets and the economy
Book Update
My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, which is all about Ethereum and the 2017 ICO mania, is now available!
You can purchase it here: http://bit.ly/cryptopians
