Multichain $1.5B hack investigation, Shibarium eyes relaunch, Base, Optimism join hands: Finance Redefined

By xnftcrypto On Aug 27, 2023

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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.

The past week in DeFi saw developers behind Base and Optimism protocols join hands to develop a revenue and governance sharing framework. The $1.5-billion Multichain hack has seen some new evidence — read our detailed investigation to learn about every aspect of the exploit and the plight of the victims thereafter.

Blockchain security provider Quantstamp introduced a new DeFi tool to detect flash loan attack vulnerabilities in several protocols. Shiba Inu’s Ethereum layer 2, Shibarium, is gearing up for a relaunch after its first public launch was met with FUD, technical errors and more.

The DeFi market had a mixed week as the total value locked in DeFi protocols remained in the same range as last week but saw a minor dip of about $70 million.

Base, Optimism unveil shared governance and revenue-sharing framework

Developers behind the Base and Optimism networks have jointly announced a revenue-sharing and governance-sharing agreement. Coinbase, the parent company of Base, has also published a list of “principles of neutrality” it will follow to prevent Base from becoming centralized.

This announcement was made through three separate blog posts on Aug. 24: one from the jointly controlled Optimism Collective, one from Base and one from Coinbase.

Multichain victims search for answers in $1.5B exploit as new evidence emerges

On July 14, developers of the $1.5-billion Chinese cross-chain protocol Multichain confirmed users’ worst fears. The protocol’s CEO, identified only as “Zhaojun He,” was arrested by Chinese authorities in Kunming on May 21 after months of repeated denials on official communication channels. Also allegedly arrested was Multichain’s core team, which was operating in Shanghai.

It was never disclosed why Zhaojun had been arrested or what the charges were. However, evidence suggests that Multichain funds may have been seized as part of an anti-money laundering operation in the context of a greater crackdown on crypto by Chinese authorities. In addition, an alleged fake ID used by the CEO to register Multichain’s operations only draws more questions.

Quantstamp introduces tool to detect protocols’ flash loan attack vulnerability

Blockchain security provider Quantstamp has launched an automated service to detect flash loan attack vectors in smart contracts. The new service is being called Economic Exploit Analysis and is based on research done at the University of Toronto.

Economic Exploit Analysis will be available to protocols, whether they have been deployed or not. It will enhance Quantstamp’s audits by identifying flash loan attack vulnerabilities in a client’s code. The service will be available on any Ethereum Virtual Machine (EVM)-compatible blockchain and is non-exhaustive — that is, it may not detect all attacks.

Shiba Inu hints at making Shibarium public soon

Progress is underway in the field of blockchain technology, with the highly anticipated public launch of the Shibarium L2 happening soon. The Shiba Inu team has announced that the platform is running smoothly and just needs to be made public.

The team behind Shibarium, an Ethereum L2 network, has indicated that the platform is currently live and in private mode, having functioned smoothly during its two-day test, and is on the verge of becoming available to the public.

DeFi market overview

Despite the late market turmoil, DeFi’s total value locked in DeFi protocols saw a bullish surge in the past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week; however, the late Thursday dip washed away the gains, leaving most tokens trading in the red on the weekly charts. The total value locked into DeFi protocols touched $49.1 billion.

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.

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