Another Sign Yield Farming's Harvest is Souring
Also, Audius token distribution, PoolTogether update, IDEO's crypto fund
Hello Defiers! Here’s what’s happening:
- Harvest Finance scrambles to catch hacker and make users whole
- AUDIO tokens retroactive distribution to 10k musicians
- PoolTogether no-loss lottery leverages DeFi in upgrades
- IDEO announces $21M crypto fund
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Harvest Grapples to Make Users Whole After ~$34M Hack
Harvest Finance, one of the latest DeFi projects to ride on the waning yield farming wave, was exploited over the weekend, shortly after its total value locked crossed the $1B mark. The hacker was able to drain $33.8M worth of stablecoins.
Users can deposit a variety of stablecoins and governance tokens in the Harvest platform in exchange for fTokens, or interest-earning wrappers. Deposits are then sent to popular DeFi protocols like Curve, Uniswap and Balancer to aggregate the highest returns.
Post Mortem
The attacker was able to manipulate the price of USDC and USDT inside the Y pool on Curve.fi, get vault shares (fTokens) for a beneficial price, and exit the Harvest Finance vault at a lower share price generating a profit, according to Harvest’s post mortem.
The anonymous team-led project was able to attract hundreds of millions in digital tokens less than two months after launch as traders chased attractive APYs amid a dwindling number of farming opportunities. But they’ve pulled over half of those assets after the hack, leaving Harvest enthusiasts to wonder whether or not the meme-driven project can rebound from a seemingly devastating blow.
Image source: DeFi Pulse
Harvest Finance TVL has plunged to $415M, while the FARM token is down more than 50% in the past seven days to ~$110.
Admin Keys
Harvest assets climbed in the past two weeks as the platform’s governance token, FARM, ran up from $90 at the start of October to as high as $336 last week.
Amidst the growing focus around Harvest, content creator Chris Blec raised the alarm that the project had control over admin keys with the power to theoretically withdraw users’ funds
2:43 PM ∙ Oct 25, 202098Likes15Retweets
Flash Loan
Whether by chance or circumstance, less than 48 hours later the hacker started draining the project. They were able to source $50M of USDC with a flash loan on Uniswap to manipulate prices in the USDT-USDC liquidity pool in Curve. They then returned almost $2.5M.
banteg @bantgtl;dr on harvest exploit
1:14 PM ∙ Oct 26, 2020433Likes105Retweets
The Harvest team acted quickly to protect the rest of the Vaults, saving the protocol of any additional losses, and it’s trying to identify the hacker’s addresses so that exchanges can stop them from cashing out. It remains to be seen whether exchanges are willing to help in this regard.
Jesse Powell @jespowStop fucking up your bullshit DeFi scams and expecting exchanges to bail you out. I will not accept your attempt at externalizing the cost of your hasty, reckless rollout. Invest in audits, insurance and please DYOR. Taking your losses is the only way to enlightenment.10:33 PM ∙ Oct 26, 20201,243Likes149Retweets
Ethics Question
Harvest, which had been audited by PeckShield, is also offering a $100k bounty for whoever can help them get the attacker to return the rest of the funds. The team says it has identified the hacker as a “well-known” member of the crypto community, sending the community on a goose hunt.
Meanwhile many are left to question the ethics regarding the flash loan attack: Some say this is the case of a trader legitimately taking advantage of an arbitrage opportunity, while others say the hacker exploited the code to provoke an illicit price manipulation, stealing other users’ funds. As the debate rages, Harvest users wait to see whether they’re made whole
𝐬𝐜𝐨𝐭𝐭 𝐋🌾 @scott_lew_isit was hack. it was a crime. the thief is no longer welcome in ethereum community.12:33 PM ∙ Oct 26, 2020227Likes21Retweets
Audius Drops Crypto on 10k Artists
Audius last week brought 10k artists into the crypto world overnight.
The music streaming platform with 800k active users on Friday launched its AUDIO token, distributing 50M tokens to its top 10k power users. This makes it one of the most active blockchain projects, as it compares with 35k users on Uniswap and 6k users on Compound Finance, according to DappRadar.
Audius is vying to become a better home for artists to share and publish and and create new ways for artists to monetize their work using web3 primitives."
The token was launched on Friday morning prior to being on the front page of Twitch for a RAC and deadmau5 concert. Longtime users got an average of 5k AUDIO (~$750 at publishing time) dropped in their accounts, with the most active users taking roughly 60k tokens each (~$9k at publishing time), according to a Medium post. The drop is 5% of the initial 1B token supply.
Twitter was quickly awash with artists who suddenly had thousands worth of cryptocurrency in their hands.
PD @playerdaveefor real the most ive ever been paid at a single time for my music in the last 5 years of this project is from @AudiusProject tokens. I dont understand how but yall are helping me keep doin music full time and not get a job🥺5:03 PM ∙ Oct 24, 202039Likes2Retweets
ʟᴜᴄᴀ ʟᴜsʜ @LUCALUSHAudius paid out more money to artists in a single day than most of my peers have seen from Spotify / SoundCloud over their entire careers. incredible.2:30 AM ∙ Oct 24, 2020674Likes75Retweets
Major artists on the platform include deadmau5, Skrillex, RAC, Alina Baraz and Kenny Beats. Since Friday, total daily streams have increased 10x.
40% of Tokens
The team and advisors, a group of around 80 people, will hold 40.6% of the tokens. Investors who participated in the company’s $9M funding rounds, including Binance Labs, Standard Crypto, Hack VC, and Free Co, will receive 36% of the tokens. The project’s Treasury, which is meant to be controlled by Audius holders, will hold 17.8%.
120M AUDIO will be in circulation at launch. Team, advisor and investor tokens will start unlocking six months after launch.
Staking Rewards
AUDIO has an annual issuance rate of 7%, used to continually reward the protocol’s most active users. Issuance will originally be funneled to service providers who stake AUDIO to secure the protocol, which is being migrated to mainnet from testnet.
“This means all content now lives on a mainnet iteration of decentralized service providers, giving Audius the unstoppable foundation we’ve been battle testing for two years,” the team wrote.
PoolTogether Leverages DeFi in No-Loss Game Update
PoolTogether has upgraded its savvy DeFi’s savings game to enable the creation and management of no loss prize games.
The V3 upgrade features larger prizes as the result of multiple yield sources and leveraged yield farming. The new design marks the next step in the progressive decentralization of the protocol by removing the need for a trusted party to manage a prize pool and allowing anyone to earn DeFi raffle tickets for saving Dai.
The community quickly rallied around the new upgrade, depositing a variety of unique prizes into the primary contract to give one lucky winner a basket of rewards that can be found here.
3:43 AM ∙ Oct 26, 2020109Likes11Retweets
With added referral bonuses and ongoing deposit rewards, PoolTogether is shaping up for its next chapter of protocol-wide governance to democratize the means for anyone to leverage tokenized savings to create a no-loss lottery.
IDEO CoLab Announces $21M Crypto Fund
IDEO CoLab Ventures, the venture fund of renowned design firm IDEO, today announced a $21M early-stage crypto fund backed by IDEO, Avanta Ventures, GS Group, Hanwha Asset Management and Fineqia. Backers also include executives from IDEO, Coinbase, Twitter, Fortress, and other major tech companies and financial institutions.
IDEO CoLab wrote it believes the blockchain “industry is at a critical moment in its development” as “while blockchain and crypto technologies are still inaccessible to the average person, the fundamental need for more open, free, and equitable systems is greater than ever.”
IDEO CoLab’s portfolio has now grown to include over 30 blockchain and crypto startups and 40 founders since making its first investment in 2018. The fund’s investment focus will be on: Web 3.0 infrastructure and tools; new financial systems, products, and services; new networks, marketplaces, and experiences that will change the way people work, connect, consume media, and play.
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About the founder and editor: Camila Russo is the author of The Infinite Machine, the first book on the history of Ethereum, and was previously a Bloomberg News markets reporter based in New York, Madrid and Buenos Aires. She has extensively covered crypto and finance, and now is diving into DeFi, the intersection of the two.
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