A great leap towards decentralization
2020 was the year of a huge market crash, new all-time highs, a long-awaited genesis block of Ethereum 2.0, and a decentralized finance boom. While Bitcoin has smashed through $28,000 mark amid growing institutional adoption, many investors keep their eyes on the Ethereum price, as a major indicator of a so-called “alt season” — which usually occurs when people start pilling their gains from bitcoin to other cryptos.
DeFi products saw a massive wave of adoption and popularization, as the total decentralized exchanges (DEXs) trading volumes rose from a few million to over $100 billion, according to Dune Analytics. While the number of unique addresses interacting with DeFi protocols skyrocketed to over 1 million, many users enjoyed airdrops of various governance tokens worth from a few dollars to more than $1,000.
In fact, to increase engagement in the protocol’s governance process, Uniswap has recently rolled out an open-source tool, called Sybil. The new feature helps UNI token holders discover, verify, and then delegate their votes to community representatives, who have connected Ethereum addresses to their social media accounts.
Ripple to face the SEC suit over its XRP token
The U.S. Securities and Exchange Commission (SEC) filed a suit against San Francisco-based company Ripple and its executives, Brad Garlinghouse and Chris Larsen, for allegedly raising more than $1.3 billion via sales of unregistered securities. The regulatory watchdog alleges that Ripple’s XRP token is classified as a security, and it served as an investment in the company and to enrich Garlinghouse and Larsen personally.
Following the SEC’s filing, XRP price fell sharply and a number of crypto companies cut off XRP support for their products. Major Europe-based crypto exchange Bitstamp announced the suspension of XRP deposits and trading for its US customers starting from January 8, 2021. After the announcement, Bitstamp’s XRP/USD pair accounted for more than $125 million in daily trading volume, according to CoinGecko. A few days later, Coinbase, OKCoin, and Bittrex followed suit, announcing that XRP trading will be halted in January, which triggered another major sell-off.
Since Ripple has historically had a very controversial reputation in crypto space, many started cheering SEC’s decision to sue the company. Ethereum’s co-founder Vitalik Buterin pointed out that Ripple considers XRP to be a better alternative to Bitcoin and Ethereum, because the latter two are “Chinese-controlled” currencies.
CEO of Ripple Brad Garlinghouse commented in the Twitter thread that the SEC is intentionally limiting American innovation in the cryptocurrency industry, and that such regulatory decisions directly benefit China. Earlier in October, Ripple’s co-founder Chris Larsen said that the company was considering relocating outside the U.S. due to regulatory uncertainty.
In May this year, messaging app Telegram shut down its TON project and returned funds back to investors due to similar regulatory pressure from the U.S. SEC after the company raised $1.7 billion in 2018.
In other news
Decentralized exchange aggregator 1inch announced the release of its governance 1INCH token, with 6% of its total supply being airdropped to users that interacted with the protocol before December 24.
In July this year, popular France-based hardware wallet manufacturer Ledger disclosed a data breach, which led to a leak of 1 million email addresses and personal information of 9,500 customers, including names, mailing addresses and phone numbers. Turned out that the leakage was a lot bigger, because in December somebody uploaded a database that contains personal details of 272,000 Ledger customers.
New DeFi lending project Warp Finance has recovered approximately 73% of $7.76 million that were stolen from the platform in a flash loan attack earlier this month. The team behind the lending protocol has distributed recovered funds to victims of the exploit, and announced Portal IOU tokens that will help fully reimburse all affected users over time.
Decentralized finance protocol Cover has been exploited multiple times while all of its core devs were asleep. The first attack resulted in the loss of around $4.4 million. Luckily, developers of another DeFi project Grap Finance quickly used the same exploit to drain the funds left in the Cover protocol and then returned nearly $3.2 million back to the Cover team. Since the compensation plan will reimburse only COVER holders prior to the attack, Binance allocated $10 million to cover losses of all of its users who bought COVER tokens after the incident and saw their tokens become worthless.
Merry Christmas and Happy New Year! We wish health to you and your loved ones. We hope next year will bring us even more decentralization and global crypto adoption.