🦹🏻‍♂️ Rug-Pullers and Black-Hats Ran Wild in 2021 With $2.2B Lost to Theft: Report

Hello Defiers! Here’s what we’re covering today: News Rug-Pullers and Black-Hats Ran Wild in 2021 With $2.2B Lost to Theft: Report ERC-4626 Proposes To Make Yield-Bearing Tokens Their Own DeFi Lego Index and Bankless Have a New Token for the Lazy but R...


Hello Defiers! Here’s what we’re covering today:


Weekend Read



Trending in The Defiant

The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button below ($15/mo, $150/yr).

Subscribe now

🙌 Together with:

  • Step Finance is the portfolio management dashboard for Solana users to visualise, analyse, execute and aggregate transactions across all Solana contracts in one place. Get started now!
  • ZerionZerion is Mission Control for Web3: an intuitive DeFi portfolio manager, multichain tracking & trading and the best place to show off your NFT collection
  • Sorare Experience true football connection in The Global Fantasy Football Game! Trade & collect, play with football NFTs #OwnYourGame Learn More!
  • Cryptex Finance (CTX) the fully decentralized creators of TCAP, The World’s First Total Crypto Market Cap Token.

DeFi Exploits

🦹🏻‍♂️ Rug-Pullers and Black-Hats Ran Wild in 2021 With $2.2B Lost to Theft: Report

NEWS Hackers, exploiters, rug-pullers, and other DeFi miscreants had a prolific 2021. That’s the upshot from a finding by Chainalysis, the blockchain forensic analysis firm. It said rogues stole $2.2B in digital assets from DeFi protocols last year, a 13-fold increase from 2020. That accounted for more than two-thirds of the $3.2B lost in all crypto.

SCAMMING Chainalysis also found surging instances of rug-pulls and money laundering in the DeFi sector last year, warning that DeFi may be “unlikely to realize its full potential if the same decentralization that makes it so dynamic also allows for widespread scamming and theft.” The firm published the findings in a preview of its 2022 crypto crime report.

UNSAFE PROJECTS While Chainalysis suggests that better communication from industry leaders and regulators may help retail investors learn how to avoid dubious projects, the report forecasts that “more drastic steps” may be needed to “prevent tokens associated with potentially fraudulent or unsafe projects from being listed on major exchanges” in the future.



👀 ERC-4626 Proposes To Make Yield-Bearing Tokens Their Own DeFi Lego

TOKEN STANDARD A new proposed token standard for Ethereum sent optimistic ripples through the DeFi community this week. Joey Santoro, co-founder of the Fei protocol, introduced a new token standard, called ERC-4626 on Twitter on Jan. 4 to general support.

YIELD At a high level, ERC-4626 tokens standardize yield-bearing tokens, making it easier to integrate them into DeFi protocols. Examples of yield-bearing tokens include lending protocol Aave’s aTokens, which accrue interest, and Yearn Finance’s yTokens, which increase in value as the deposits they represent generate yield.

MONEY LEGOS ERC-4626 streamlines the integration of tokens like aTokens and yTokens into other DeFi protocols, Santoro told The Defiant. Integrations with other protocols, essentially stacking “money legos” on top of each other, is a key value proposition of DeFi. So, a standard for these value-accruing legos would be likely to reduce friction in the DeFi development process.


DeFi Indexes

🧐 Index and Bankless Have a New Token for the Lazy but Risk Hungry DeFi Investor

GAS COSTS Not sure which of the up-and-coming decentralized finance tokens are the right bet? Why not just buy all of them? Obviously, the gas costs alone of buying all of them would be prohibitive, never mind the time it would take to just catch each one as they launch.

NEW TOKEN But now, the Index Coop and the Bankless DAO have collaborated to come up with a new token that does all the work. It’s called the Bankless DeFi Innovation Index, and its GMI token launches today.

RISK CURVE For those who don’t dedicate their days to crypto Twitter, “GMI” is shorthand for “gonna make it.” “Our thesis is, DeFi moves fast,” Peter Lemonade from Index’s growth team told The Defiant in a phone call. “A lot of our customers were looking for something a bit further out on the risk curve.”



👩🏽‍💻 Devs Flock to Ethereum But Fulltimers Still Sorely Needed as DeFi Expands

ECOSYSTEM It may not be a surprise, but now we have the proof: Devs love Ethereum more than ever. The lion’s share of developers — 700 — are joining the Ethereum ecosystem every month, according to a report published by Electric Capital, a crypto research firm. Ethereum’s developer ecosystem is the largest in crypto by a significant margin, with 4,000 active devs clocking in every month.

NEW DEVS And 500 new devs are also contributing code to a DeFi protocol for the first time each month. However, the report emphasizes that just 1,000 full-time devs are maintaining the entire DeFi sector, which currently represents a combined total value locked of more than $200B.

WEB3 PROTOCOLS Researchers analyzed almost 500,000 open-source code repositories and 160M individual code commits from across Web3. With the study looking at unique open-source repositories only, Electric Capital notes its estimates are undercounted. The report estimates there are currently more than 18,400 developers contributing to web3 protocols every month.


Future of Ethereum

🦄 Vitalik Cheers NFTs, Layer 2s, and Previews Ethereum 2.0 in Podcast

FASCINATING Vitalik Buterin is just like everyone else — he digs NFTs, too. That was just one of the observations made by the co-creator of Ethereum in an appearance on Bankless’ podcast on Jan. 4. In a freewheeling discussion, Buterin also weighed in on Ethereum 2.0 and Layer 2 scaling solutions. Buterin described the rise of NFTs as “really fascinating,” asserting that the sector has inspired many new entrants into the crypto sector from the mainstream and artistic communities.

SOCIETY “To me, blockchains are about creating these innovative new ways to organize society,” Buterin said. “In some ways, what’s happening with artists being able to sell NFTs really is a realization of that spirit, because we actually are giving people who are creating art new business models — giving the creators of this thing is very valuable but often has a hard time getting business models, a new way to get funding.”

SCALING Ethereum’s chief scientist highlighted the “amazing” growth of Layer 2 scaling, describing the technology as having evolved “from theory to practice” over the course of 2021.


Weekend Read

🏞 Axie Infinity to Release Land Gaming Mode in Bid to Maintain Dominance

In which Brady Dale delves into Axie Infinity’s next act.

GAME MODE Axie Infinity is entering another dimension. It’s not going to just be a sort of Pokémon game any longer. A new wrinkle is coming. “Land is another game mode built in the Axie universe,” Jeffrey Zirlin of Sky Mavis, the company that’s building the Axie Infinity game, told The Defiant in an interview.

OWNABLE PLOTS On New Year’s Eve, the team published a blog post teasing gaming on Axie land — ownable plots in the Axie creatures’ world, Lunacia. The move introduces a whole new kind of gameplay for the Axie NFTs that have driven so much activity over the last year. The blog post included a short teaser trailer that allows players to have a look at the quality of art powering the game.

VANGUARD Axie Infinity had a giant year in 2021. It was in the vanguard of the play-to-earn revolution spawned by blockchains. Its AXS governance tokens are selling for $88, up 149X from where it was in early 2021.

QUESTS It also brought in $1.3B in revenue in the last year, according to Token Terminal. But obviously the pressure is on to keep up that dominance. Axie is now a game with basically two modes: quests and battles. Both allow users to earn cryptocurrency, but some have criticized the level of gameplay for such a buzzy enterprise.


Sponsored Post


Better trades on Ethereum with Eden Network.

In 2021, Ethereum traders lost over $200 million dollars to malicious bots exploiting their trades. As DeFi continues to gain popularity, this number is expected to rise.

Eden Network is a next generation private transaction service for Ethereum, providing traders with MEV protection by submitting transactions directly to miners and away from the prying eyes of harmful bots. Using Eden Network for Ethereum transactions results in better and safer trades.

While MEV protection does not require any stake, traders who stake $EDEN and use the Eden RPC on MetaMask, receive transaction block priority n and now with the release of staker extractable value (SEV), they are paid for every trade they make on Ethereum.

Eden Network recently launched Eden Rocket RPC, which compiles some of Ethereum’s fastest private transaction networks, resulting in 90%+ effective hashrate. This makes Eden Rocket RPC the the fastest private transaction network available.

Launched on August 5th with EIP-1559, Eden Network successfully closed a $17.4 million dollar seed round led by Multicoin Capital with participation from Alameda Research, Jump Capital, Wintermute, GSR and DeFiance Capital. Genesis Capital executive Joshua Lim and Andre Cronje of Yearn.finance also participated as angel investors.

Join the best - get started with Eden Network today and trade safer.

The Tube

📺 Real Vision vs. The Defiant: “EMINAPE” USHERS IN 2022 AS YEAR OF NFT CULTURE


🔗 $139M Terra proposal to ‘bring awesome UST use-cases’ to DeFi projects: CoinTelegraph

Decentralized stablecoin issuer Terra issued an ambitious proposal to expand the interchain deployment of its TerraUSD (UST) stablecoin across five projects on Ethereum, Polygon and Solana.

🔗 Bitcoin Slips to 3-Month Low, Analysts Divided on Impact of Fed’s Tightening: CoinDesk

Bitcoin continues to lose ground as minutes from the Federal Reserve’s December meeting released earlier this week flagged the chance of a faster policy tightening.

🔗 GameStop Entering NFT and Cryptocurrency Markets as Part of Turnaround Plan: The Wall Street Journal

GameStop Corp. is launching a division to develop a marketplace for nonfungible tokens and establish cryptocurrency partnerships, according to people familiar with its plans, pushing the company into much-hyped areas as it tries to turn around its core videogame business.

🔗 Goldfinch raises $25M led by Andreessen Horowitz to double-down on 154X growth in 2021: Medium

Today we are thrilled to announce an additional $25M in funding, led by Andreessen Horowitz (a16z crypto).


Bill Laboon @BillLaboonTHREAD - @Polkadot #PolkadotDigest 7 Jan 2022 #Polkadot News A new parachain slot auction started yesterday, and Composable Finance is currently in the lead. polkadot.js.orgPolkadot/Substrate Portal6:36 AM ∙ Jan 7, 2022183Likes34Retweets


Justin Ðrake 🦇🔊 @drakefjustinthe EF research team will host a Reddit AMA on Jan 7 at 1pm UTC


reddit.comr/ethereum - [AMA] We are the EF’s Research Team (Pt. 7: 07 January, 2022)53 votes and 99 comments so far on Reddit3:52 PM ∙ Jan 5, 2022293Likes108Retweets

Trending in The Defiant

🧑‍💻 ✍️ Stories in The Defiant are written by Brady Dale, Owen Fernau, Samuel Haig, DeFiDad, and yyctrader, and edited by Edward Robinson, yyctrader, and Camila Russo. Videos are produced by Robin Schmidt, Alp Gasimov and Daniel Flynn. Podcast is led by Camila, edited by Alp.

Subscribe now

The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access, while free signups get only part of the content. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button above ($15/mo, $150/yr)