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Prices on 2021-03-13 06:15 UTC.
Ethereum upgrades

Berlin and London to go live

After months of planning and development, Ethereum updates Berlin and London will see the light in the upcoming months, and will bring about several tweaks and changes to optimize transaction costs, as well as to pave the way for future related updates.

The first of these, the Berlin upgrade - named after the city that hosted Devcon 0 - is scheduled to go live on April 14 with the implementation of four Ethereum Improvement Proposals (EIPs): 2565, 2929, 2718, 2930. These improvements aim to introduce certain gas optimizations, make the network safer and lay the groundwork for upcoming features.

The second upgrade, London, is scheduled for July. London — named after Devcon 1 — includes the highly-anticipated and somewhat controversial EIP-1559, which is supposed to make ETH more scarce by burning transaction fees and make gas prices more predictable, potentially improving overall user experience. Many mining pools are calling for a boycott of EIP-1559 as they see it as a wealth redistribution from miners, who invest in hardware to secure the network, to whales, who hold large amounts of ETH.

In the last few months the Ethereum network has been clogged with transactions, especially after a rapid rise of various DeFi and NFT projects, with gas prices hitting 1,000 gwei or $300 for a simple swap on decentralized exchanges in late February.

It is worth noting that due to the severe network congestion, many investors flocked to other chains including Binance Smart Chain (BSC), which has long been criticized for its lack of decentralization. Regarding this, an anonymous developer deployed a smart contract game on BSC with a token called Tanks of Tiananmen, referring to the 1989 Tiananmen Square massacre, which is a heavily censored topic in China. The idea behind this contract is to push Changpeng Zhao - the Chinese-Canadian CEO of Binance - to either censor the game (revealing BSC’s centralized nature), or risk retaliation from the Chinese government. According to CZ, similar tactics have been used against the Ethereum network, which led to popular explorer Etherscan being blocked in China.

DeFi

The rise of indexes

The Indexed Finance DAO has released a highly-anticipated DEGEN index token, which consists of 10 native tokens of highly innovate DeFi projects with market caps below $2 billion. Initial projects included in the community index are Thorchain, Ren, Reserve Right, Curve, 1INCH, Ocean, Alpha Finance, BadgerDAO, Polkastarter, and Mirror protocol.

While users can trade the DEGEN token on various DEXes without any hidden fees, there is a 0.5% exit fee for investors who want to burn DEGENs back into their underlying assets. This process is usually done by arbitrage traders who wish to profit from the difference in prices between an index token and the assets it tracks.

Another index-focused DAO, PowerPool, has released its innovative index Yearn Lazy APE (YLA) that is composed of Yearn Vaults’ liquidity provider (LP) tokens. YLA is designed for investors who seek an easy exposure to Yearn automated capital management strategies in order to generate yield on their stablecoins without the risks associated with AMM’s impermanent loss.

Index tokens such as DPI, DEFI5, sDEFI, PUNK, and MASK gained a lot of popularity in the recent months, as they help save on transaction fees and provide an easy exposure for retail investors to various DeFi and NFT projects. It’s important to keep in mind, that all wrapped tokens and indexes have additional risks of being exploited even if underlying assets stay untouched.

In other news

  • Due to a private key leak, Ethereum-based PAID Network suffered from an exploit resulting in a loss of nearly 60 million PAID tokens, which were sold for over 2,000 ETH - worth roughly $3 million at the time of the attack. PAID Network plans to relaunch its token, while the public raises concerns about team’s negligence for not securing their tokens with a multisig.

  • DeFi batching protocol Furucombo became the victim of an “evil contract” attack that allowed a hacker to steal over $14 million directly from wallets of Furucombo users that have previously approved an unlimited access to their tokens for the protocol. The attack reminded once again about the importance of carefully managing permissions to DeFi protocols. Furucombo provides an easy drag-and-drop interface for batching transactions, usually used by arbitrage traders.

  • Several V2 Crowdpools of decentralized exchange DODO have suffered from an exploit that drained $3.8 million from the protocol, of which $1.89 million has been successfully recovered. According to DeFi Pulse, the protocol had close to $40 million in total value locked at the time of the hack, so the incident didn’t significantly impacted a short-term price of project’s native token DODO.

  • BSC-based project Meerkat Finance lost $31 million in a hack shorty after its launch. However, the team behind the protocol disappeared from the social media platform after the incident, which prompted many investors to believe that developers performed an exit-scam - also known as a “rug pull”. Meerkat Finance was a copy-cat of Ethereum-based yield vault protocol Yearn Finance.

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