Bitcoin finally hits a new ATH; network congestion follows suit
After three years of struggle, Bitcoin has finally broken through the $20,000 psychological barrier, setting a new All-Time High above $23,600. Following the news about a historical price milestone, the Bitcoin network experienced congestion with a number of unconfirmed transactions in the mempool climbing above 100,000 and an average transaction fees skyrocketing to over $12, according to Blockchair.
It is worth noting that three years ago, when Satoshi’s coin was climbing towards its previous ATH and amid the scalability drama taking place back then, network fees were as high as $50 per average transaction. Since then, developers introduced different scaling solutions from Lightning Network to Blockstream’s Liquid Network, but none of them has gotten a wide adoption yet.
An attempt to tokenize BTC on the Ethereum network saw some results, though, with more than $2.5 billion locked in the Wrapped BTC (WBTC) token, an ERC20 token backed 1:1 by bitcoin via custodial solutions. However, this approach doesn’t completely solve the problem of high transaction fees, but rather distributes the burden of onchain fees between Bitcoin and Ethereum networks.
Another Christmas gift to UNI holders (but beware)
The team behind the Mirror Protocol announced a large airdrop of 18.3 million MIR tokens, worth around $23 million at the time of the announcement, to LUNA stakers and all Ethereum addresses that held at least 100 UNI tokens during a snapshot taken on November 23. Eligible UNI holders can claim 220 MIR tokens, worth around $250 at the time of writing, through the official website.
MIR is a governance token of decentralized finance protocol Mirror, which enables the creation of synthetic assets that mimic the value of shares in publicly traded companies like Tesla or Netflix. Unlike highly over-collateralized synthetic assets on Synthetix protocol, Mirrored Assets (mAssets) on Mirror Protocol require only a 150% collateralization ratio in one of Terra’s various stablecoins due to low volatility of the latter.
It’s important to mention, though, that one should always exercise extreme cautious when interacting with DeFi applications.
Firstly, there are lots of scammers in the space and recently, at least three new DeFi projects performed an exit scam in just one day, leading to a total loss of $1.2 million of investor’s funds.
Secondly, DeFi projects are constantly attacked by hackers, with Compound, Pickle Finance and more recently, Warp Finance, being the latest victims of exploits that led to the combined loss of $128 million less than a month ago, with news of the former two being covered in our previous newsletter.
Thirdly, many DeFi protocols ask for an unlimited access to withdraw tokens from user’s address in order to interact with an application. Such a flaw in the design of ERC20 tokens has previously been exploited by malicious actors, who managed to steal victims’ funds directly from their wallets. To mitigate this threat users can set custom spend limits when approving a permission to withdraw their tokens, as well as lower or even revoke infinite approval from protocols that already have such permissions.
In other news
The founder of DeFi insurance platform Nexus Mutual lost $8 million worth of NXM tokens in a highly-sophisticated targeted attack. A hacker was able to compromise the victim’s MetaMask wallet, tricking him into signing a transaction that transferred all funds to the adversary. Interestingly, this hacker was a member of this platform and passed Know-Your-Customer (KYC) verification prior to the attack, which sparked discussions whether KYC/AML restrictions actually stop malicious actors from committing a crime.
Visa and Mastercard stopped processing payments to porn industry giant PornHub, in respond to the New York Times article alleging that some videos uploaded to the website contain abusive illegal content. Shortly after, PornHub removed millions of videos, changed its policies to clamp down on abusive content and added more crypto payment options to the list that now includes BTC, ETH, BCH, and more recently, privacy-focused coin Monero (XMR).
The French Finance Ministry moves to impose stricter KYC rules on crypto firms citing that cryptos might be used to fund terrorism. The new rules regulate all exchanges, including crypto-to-crypto ones, requiring them to request two forms of identification from customers. The French government wants to also propose these strict measures at the European level.
The team behind the Flare Network took a snapshot of the entire XRP blockchain to determine all addresses eligible for free Spark (FLR) tokens that will be distributed next year after the network launch. Following the snapshot, the unique amount of addresses interacting on the XRP network has plummeted.
Due to Apple’s policy, all iOS users of the Brave browser will no longer be able to collect BAT tokens for watching ads and tip their favorite content creators via Brave.