Rug Radio Recap - August 6, 2023

gm fam! We’re fresh off of our event with OD Labs and there’s nothing like the vibes of getting see everyone IRL. We even had Beeple on GN Web3 on Thursday who created a special Everyday piece to commemorate the episode (more on that at the end)!

This is Rug Radio. We’ll leave the mics on for you.

Here's what we've got in this week's recap...

• Rug Radio & OD event recap👾

• Curve Finance exploited for $62 million😬

• Coinbase sets public Base launch for August 9th🔵

• A surprise from Beeple👀

Rug Radio & OD Labs Event👾

The Rug Radio and OD community meetup in Toronto on Friday was an overwhelming success. Shoutout to everyone who came through and contributed to the amazing vibes🇨🇦

Curve Finance Exploit

On July 30, Curve Finance, one of the largest decentralized exchanges, was exploited for nearly $62 million in digital assets.

The attack exploited a reentrancy vulnerability in the Vyper programming language, which allowed the attacker to repeatedly withdraw funds before the smart contract could update it’s balance.

The attack was carried out against four of Curve Finance's stablecoin pools: alETH/msETH, pETH/USDT, USDC/DAI, and FRAX/USDC. The attacker was able to withdraw a total of 287,900 ETH, 1,073,668 DAI, and 1,383,300 USDC from these pools. The Curve Finance team was quick to respond to the attack by halting trading on the affected pools and deploying a patch to fix the vulnerability.

This was merely damage control as liquidation fears began to mount.

Curve Finance's CEO, Michael Egorov, had taken out loans totaling ~$100 million against his CRV tokens meaning that he had to keep a certain amount of CRV tokens in his wallet in order to maintain the collateral for his loans.

When the Curve Finance attack happened, the price of the CRV token plummeted 35% to $0.48 approaching Egorov’s liquidation levels between $0.37 - $0.39. As a result, he was forced to sell his CRV tokens over-the-counter (OTC) to multiple people and institutions or face cascading liquidations that would hit the entire DeFi sector. Luckily, that didn’t happen.

Recovery: White-hat hackers helped recover nearly 6,000 ETH (~$11 million USD) which was then sent back to Curve Finance’s deployer wallet. In an attempt to end the entire fiasco, Curve, Metronome and Alchemix offered the hacker a 10% bounty to return the funds in exchange for not taking any legal action…and it worked.

Within 24 hours, the hacker returned the remaining funds to various associated wallets along with an on-chain message stating that he accepted the offer because he didn’t want to “ruin your project.”

Credit to Cointelegraph and Flakes for the information in this section.

Context

• Weekly NFT volumes continued to hover near year-to-date lows. Outside of general economic sentiment, the reason for such low volumes appears to be two-fold:

  • 1) Announcements from projects aren’t affecting volumes due to lack of attention and many teams are taking advantage of this, working strategically in the background.

  • 2) Many are cautiously optimistic for a late 2023/early 2024 crypto rally which is causing many to hold onto crypto.

• There were some high value sales from generative art and historically iconic collections, like CryptoPunks, with Beeple buying a Punk for 113.69 ETH.

• The concerns surrounding the Curve Finance exploit caused crypto to fall across the board with altcoins getting hit the hardest. Expect to see crypto continue to stay in this range until we see some positive catalysts and/or macro-economic conditions improve.