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☠️Multichain Exploited For $120M

The Defiant

DeFi Daily

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Happy Friday! Yet another bridge exploit saw Multichain lose over $120M of assets yesterday, underscoring the risks associated with custodial cross-chain bridges. Next, we turn to DappRadar's latest report that spotlights a surprising uptick in web3 activity in June despite the regulatory crackdown on top centralized exchanges.

We then examine an unconventional project, VMPX, that has managed to outpace regular heavy hitters in terms of Ethereum gas consumption. Finally, we look at the ongoing SEC investigation into BarnBridge, a protocol for trading structured derivatives,

✍️ In today’s newsletter:

  • Attacker drains Multichain bridge
  • Nearly 2M wallets interacted with dApps in June
  • VMPX token spikes Ethereum gas
  • BarnBridge shuts down amid SEC investigation

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Exploit

Over $120M Drained From Multichain Bridge

TLDR Multichain, a cross-chain bridging protocol, has reportedly been exploited with over $120M in digital assets transferred to unidentified wallets. The protocol's team is investigating the incident and has asked users to halt using their services. Assets including wBTC, USDC, USDT, and several altcoins have been moved from Multichain's Fantom bridge to various wallet addresses.

SO WHAT This incident once again underscores the risks associated with centralized bridges in DeFi.


SPONSORED POST

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Phat Contract is the optimal solution for implementing Web3 Functions.
In web3, ensuring efficient interaction with massive off-chain data while maintaining trustworthy and secure information has become exceedingly challenging. Therefore, Phat Contract enables smart contracts to extend their capabilities to the rich off-chain world, making smart contracts even smarter.

Use cases of Phat Contract are:

  • SocialFi developers can enable their smart contracts to read data from any API, including user profile stats like followers, posts, comments, and post stats.
  • Cross-chain DEX aggregators that enable users to swap tokens between various blockchains while ensuring the best possible price and minimal slippage in one-click.
  • Self-owned oracles where any smart contract can access a wide range of data from both on and off-chain data sources.

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You can check out Phat Contract templates here.


Web3

Web3 Apps Gained Users In June Despite Regulatory Challenges: DappRadar

TLDR Web3 activity increased in June despite regulatory actions against top centralized exchanges, as per DappRadar. Around 2M wallets interacted with dApps daily, with the DeFi sector growing by 14%. The increase in adoption was attributed to airdrop hunters on Layer 2 protocols and the LayerZero cross-chain bridging protocol.

SO WHAT Despite the overall rise in dApp users, Ethereum saw a 50% drop in active wallets, mainly due to a decline in NFT activity. NFTs drove $888M in volume, up 17% over May, but daily active NFT users dropped by 44%.


Ethereum

Ethereum Users Have Been Burning ETH To Mint VMPX Tokens

TLDR An new token called VMPX has topped Ethereum's transaction fee charts as users rush to mint it. VMPX is designed to bridge the Bitcoin and Ethereum blockchains, allowing holders to earn fees from transfers between the two chains. The project has led to the highest gas prices on Ethereum since May.

SO WHAT VMPX and its associated ecosystem, XEN, have been multichain from the start and have a significant presence across several major blockchains. The experiment of combining the Bitcoin and Ethereum ecosystems might set the stage for more such projects in the future.


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Enforcement

BarnBridge Winds Down Activity Amid SEC Investigation

TLDR BarnBridge, a protocol for trading structured derivatives, is reportedly under investigation by the U.S. Securities and Exchange Commission. The SEC's scrutiny has led the BarnBridge DAO to halt all work on its products until further notice.

SO WHAT The BarnBridge investigation underlines the increasing regulatory pressures faced by DeFi protocols, which could potentially shape the future trajectory of the entire sector. It also raises questions about the SEC's enforcement strategy and the need for specific legislation to better cater to the unique nature of digital assets and web3 operations.


🔎 OUR REPORTERS ARE WATCHING


🌍 ELSEWHERE

  • AI Will Choose Bitcoin as Its Native Currency, Predicts Arthur Hayes (Decrypt)
  • Three Arrows Capital Liquidator May Try to Claw Back About $1.2B From DCG, BlockFi (Coindesk)
  • Winklevoss Twins’ Gemini Sues Crypto Conglomerate DCG, Citing Fraud (Bloomberg)