Herald DeFi: hacker withdrew $90 million from Mirror, and Tron rose by 48%

The decentralized finance (DeFi) sector continues to attract increased attention from cryptocurrenciesinvestors. ForkLog has collected the most important events and news of recent weeks in a digest.

The main indicators of the DeFi segment

Locked funds (TVL) inDeFi protocols fell to $106.3 billion. MakerDAO became the leader with $9.45 billion, while Curve ($8.67 billion) and AAVE ($8.23 billion) hold the second and third lines of the rating, respectively.

DeFi Herald: Hacker withdrew $90 million from Mirror, and Tron grew by 48%

TVL in Ethereum applications fell to $68.2 billion. Over the past 30 days, the indicator has decreased by 38% (on May 4, the value was $110 billion).

Объем торгов на децентрализованных биржах (DEX) за последние 30 дней составил $98,1 млрд.

Uniswap continues to dominate the non-custodial exchange market, accounting for 74.7% of total turnover. The second DEX in terms of trading volume is Curve (11.3%), the third is Balancer.

Tron DeFi Ecosystem Grows 48% in May

In May, the TVL of the Tron-based dapp ecosystem grew by more than 48%, exceeding $6 billion.

In the overall DeFi Llama ranking, the project is second only to Ethereum and BNB Chain with $68.24 billion and $8.41 billion, respectively.

The performance of other top 10 ecosystems sank significantly. For example, Avalanche lost 52.9%, Solana lost 42.7%.

Hacker withdrew $90 million from the Mirror protocol

The Terra-powered DeFi protocol Mirror was the victim of an exploit worth more than $90 million. It was discovered by an analyst at FatMan and confirmed by cybersecurity firm BlockSec.

To open a short position on a syntheticshares in the Mirror Protocol must be blocked by collateral (UST, LUNA Classic and mAssets) for at least 14 days. After the operation is completed, the tokens can be withdrawn back to the wallet.

To set the asset owner, usedID generated by the smart contract. Due to the vulnerability, the protocol was unable to block multiple withdrawals by the same user. In October 2021, this was discovered by an unknown person who caused a total of $ 90 million in damage - an amount hundreds of times higher than the size of the security he blocked.

BlockSec explained that this became knownonly now, because the Mirror site did not display data on the amount of deposited by users. Another factor was the lack of community attention to the analysis of data in the Terra blockchain compared to Ethereum and EVM-compatible networks.

In May, a few days after the collapseTerra, the developers of Mirror Protocol have eliminated the exploit. On the community forum, the team left unanswered the question of whether someone managed to exploit the vulnerability.

At the end of the month, an unknown person withdrew another $2 million from the Mirror as a result of problems with the display of quotes by oracles. This vulnerability was discovered by a member of the Mirroruser community and confirmed by FatMan.

Most Validators in the Terra Classic Networkused an outdated version of oracles. The latter provided the system with data on the cost of LUNA Classic (LUNC) at the rate of 5 USTC (~$0.12), while the real price did not exceed $0.0001. As a result, the attacker emptied several liquidity pools (mBTC, mETH, mDOT and mGLXY).

The analyst warned that the hacker could alsoto do to the mAsset pools, leading to the accumulation of bad debt and the collapse of the protocol. Access to them was suspended until the start of the pre-trading session in shares. 

The situation was "saved" by the weekend and the celebration of May 30 in the United States of Remembrance Day, on which the stock market was closed.

The developers listened to the expert's advice.They disabled the use of mBTC, mETH, galaxy and mDOT as collateral, preventing a “catastrophe”. As a result, the attacker lost the ability to drain liquidity pools.

Uniswap has traded over $1 trillion since DEX launch

Uniswap has traded over the equivalent of $1 trillion since the launch of the DEX in 2018.

According to the Uniswap Labs behind the project, the number of users of the protocol has approached 3.9 million — more than 80% of all participants in the DeFi space.

When considering DEX trading volume across all networks, Uniswap's share (including all versions) is 42.5%, according to CoinGecko. The closest competitor PancakeSwap on BNB Chain has 8.3%.

Singapore Regulator to Explore DeFi Protocols

The Monetary Authority of Singapore will explore the possibilities of DeFi protocols and tokenization. JPMorgan, Marketnote and DBS will also take part in the Guardian project.

Financial institutions will work on user cases in four main areas:

open and interoperable networks;
anchors of trust;
asset tokenization;
Institutional level DeFi protocols.

The first pilot project involves the creationpermissioned liquidity pool. It will consist of tokenized shares and deposits used to provide secured loans through smart contracts.

“These early studies of DeFi solutions will ensure the competitiveness of Singapore as an advanced financial center,” said Han Kwee Huan, Head of Strategic Planning at DBS.

Polygon developers launched an acceleration program for DeFi projects

Platform for Ethereum solutions of the second level (L2) Polygon has launched a new acceleration program for developers in the field of decentralized finance.

The initiative was implemented in cooperation with the third-level (L3) blockchain infrastructure provider Orbs based on the DeFi.org accelerator.

The program is focused on projects that use key partner technologies. 

“The focus on L2 and L3 DeFi applications is the next step for creators who are passionate about developing on Ethereum,” the statement said.

Program participants will create solutions forbase Polygon. They will receive support in the form of funding, mentoring and marketing assistance. DeFi.org will provide liquidity for promising projects, as well as promotion through its website and other platforms.