Decentralized finance (DeFi), one of the fastest growing ecosystems in the cryptocurrency market, has long been a dilemma for regulators, given the decentralized nature of the space. In 2022, United States regulators paid special focus to the nascent area with significant attention to ending the anonymous nature of the ecosystem. DeFi protocols allow users to trade, borrow and lend digital assets without having to go through an intermediary. DeFi ecosystems by nature are decentralized with the majority of projects being run by automated smart contracts and decentralized autonomous organizations (DAOs). Most DeFi protocols don’t require heavy Know Your Customer (KYC) …

Helping investigate a $265,000 hack on decentralized crypto exchange KyberSwap, crypto exchange Binance narrowed down two suspects that seem responsible for the attack. On Sept. 1, Kyber Network succumbed to a frontend exploit, allowing the attacker to make away with $265,000 worth of user funds from KyberSwap. While investigations were underway, KyberSwap offered a 10% bounty — of roughly $40,000 — to the hacker as means to remediate the situation. Parallelly, based on an independent investigation, Binance’s security team identified two suspects that may be responsible for orchestrating the virtual heist. Binance CEO Changpeng ‘CZ’ Zhao confirmed that the intel …

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 past week in the DeFi ecosystem saw major developments centered around the Ethereum Merge. Aave community proposed temporarily suspending Ether (ETH) lending before the Merge, citing the potential issue of high ETH utilization that may result in liquidations being hard or impossible and annual percentage yields (APYs) reaching negative figures. An industry expert shared his opinion on possible censorship vulnerabilities that the Ethereum network could eventually face in the wake of its transition …

Sovereign identity has been a hot topic in blockchain and cryptocurrency, especially with the rise of the creator economy. Currently, there are two types of digital identities— federated and centralized whereby data is in the control of the service provider. Self-sovereign digital identity is often cited as a human right that can reclaim agency using blockchain technology, but what frameworks exist that aid in governing it? On Aug. 2, NFT Steez, a bi-weekly Twitter Spaces hosted by Alyssa Expósito and Ray Salmond, met Marjorie Hernandez, the co-founder of LUKSO and The Dematerialized to discuss the state of blockchain-based identities and …

KyberSwap, the decentralized exchange built on liquidity protocol Kyber Network, has offered a hacker 15% of the funds from a $265,000 exploit as a bug bounty. In a Thursday blog post, Kyber Network said a hacker had used a frontend exploit to pilfer roughly $265,000 worth of user funds from KyberSwap. The protocol said it will compensate all users for any missing funds related to the exploit, and directly addressed the hacker to give them an opportunity to return the funds in exchange for “a conversation with our team” and 15% of what was taken — roughly $40,000. “We know …

Decentralized crypto derivatives exchange dYdX says it has ended its short-lived and contentious $25 first deposit bonus promo, amid a wave of backlash over its facial recognition requirements for new users. The exchange however simply cited “overwhelming demand” as the reason for its short-lived promotional campaign, which ended on Sept. 1 “effective immediately.” Due to extremely overwhelming demand of the $25 deposit bonus promotion, we are ending the campaign, effective immediately. Thank you to the many thousands of new users that onboarded to dYdX today. We truly underestimated the amount of interest the campaign garnered. — dYdX (@dYdX) September 1, …

The decentralized finance (DeFi) ecosystem scored another win against traditional finance, often called TradFi, with a former Morgan Stanley executive launching a DeFi protocol. Kevin Lepsoe, the former head of structuring for Morgan Stanley, aims to deliver an institutional fixed income scheme that offers fixed and floating rates with his new project named Infinity Exchange. According to Lepsoe, his new project will allow DeFi traders to “implement arbitrage, pull liquidity from other protocols and hedge their futures rates basis risk positions.” The DeFi market is known for its volatility and, therefore, risk in digital asset trades. Trading with more options …

Decentralized finance (DeFi) protocol Babylon Finance has finally announced that it will shut down after months of trying to recover from the negative momentum that the Rari Fuse exploit caused. In a statement, founder Ramon Recuero explained that the platform experienced an insurmountable negative streak despite their team’s efforts to endure the domino effect caused by the hack. According to Recuero, the protocol lost $3.4 million in the hack. Following this, the total value locked within the platform went from $30 million to $4 million. To make matters worse, the Fuse pool was abandoned, taking out the lending market worth …

The Ethereum network will be able to withstand censorship risks both in the short and long term, according to Ethereum community member and investor, Ryan Berckmans. The ban of Ethereum-based privacy tool tornado Cash by U.S. authorities earlier this month left many wondering whether Ethereum transactions could be also at risk of censorship, especially after Ethereum’s imminent transition to a proof-of-stake system. A widely spread concern is that entities controlling a large chunk of staked Eth, such as Coinbase or Kraken, would start censoring transactions in order to comply with U.S. sanctions. That is an unlikely scenario according to Berckmans, …

Decentralized lending platform Compound has been plagued by a code bug in a recent governance proposal to update its price feeds. The code error has “temporarily frozen” the Compound ETH (cETH) market, causing cETH transactions to revert, but Compound Labs stated that despite the front end not working, “funds are not immediately at risk.” Compound Labs announced on Aug. 31 that the code bug came from Proposal 117: Compound Oracle Upgrade v3, which was implemented a couple of hours ago to update the oracle contracts on the Compound protocol to a new version that uses Uniswap V3 instead of V2 …

A decentralized cryptocurrency (DEX) options exchange cut its own life short after unwittingly executing a command that closed its mainnet program and made it irrecoverable. OptiFi informed users that its platform had come to an unceremonious end after its development team tried to update its code on Aug. 29. According to the portfolio margining derivative DEX, the program incident also locked up some 660,000 USD Coin (USDC) on-chain. OptiFi's program has been closed by mistakes we made. TL;DR 1. We accidentally closed the OptiFi mainnet program and it's not recoverable 2. 661k USDC is locked in the PDAs, luckily 95% …

Digital asset custody platform Fireblocks has launched support for Solana, giving its thousands of users access to the developer network’s applications and infrastructure. Beginning Tuesday, Fireblocks users will have direct access to Solana’s various decentralized finance (DeFi) and Web3 applications — a move the company says will directly benefit “alternative asset managers” and “capital market participants.” “Thousands of businesses use Fireblocks to access novel Web3 products and services,” Solana co-founder Anatoly Yakovenko said in a statement. “Starting today, these businesses will immediately have access to the depth and breadth of the Solana ecosystem.” The Solana integration will come via Fireblocks’ …