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Wonderland Reveal and Wormhole Hacked, Jan 28 – Feb. 4



Welcome to the latest edition of Cointelegraph’s decentralized financial newsletter. It has been a tumultuous week of doxxing, hacks, bailouts and new highs in the decentralized financial space. Read on to recap the most impressive stories from the past seven days. This article is a summary of the full email newsletter. Sign up for the full edition using the box below. Wonderland loses in no mans amid Sifu saga Following the revealing identification of previously anonymous QuadrigaCX co-founder Michael Patryn as the founder of DeFi protocol Wonderland — known on social media as @0xSifu — a subsequent community vote decided on Wonderland’s permanent shutdown due to outstanding issues. security issues. The saga began when DeFi researcher Zachxbt Patryn doxxde as Sifu, a figure with an infamous reputation within the digital asset space for alleged fraudulent and illegal activities, most notably related to the $145-million losses incurred at the Canada-based cryptocurrency exchange. QuadrigaCX in December 2018. After Daniele Sestagalli, co-founder of Wonderland and stablecoin protocol Abracadabra, was made aware of Sifu’s real identity a month before this week’s announcement, he asked community members a crucial question: “Are we shutting down or continuing to fight for the aspect of an investment that is DAO? a revolutionary new organization?” Sestagalli admitted that he personally preferred the latter to fight.From a technical standpoint, Wonderland recorded a near-all-time high of $776.64 million in total value locked, or TVL, on Jan. 15. exposure, however, the TVL figure fell significantly to $78.57 million on Jan. 25, a loss of 89.9%. At the time of writing, the figure has recovered somewhat to $408.59 million. In true Web3 style, the decision to “wind down Wonderland and return the treasury to its holders” submitted to a community snapshot The two-day participation in the board resulted in a split decision, an inconclusive majority with 116,000 TIME tokens allocated to the decision of no and 95,000 to yes carry out the will of the token holders Because the vote is so close to 50/50 there is only one way forward and that is redemption/relaxation,” confirms this in a follow-up tweet.1/Wonderland -expe rime is coming to an end. The vote clearly shows that the community is divided. The core and heart of Wonderland is still the community. If we can’t agree on whether to continue or not, it means we’ve failed.— Daniele never asks for a DM (@danielesesta) Jan 30, 2022 The discussions within the community are heated gang in an effort to find an accommodative solution to Wonderland’s story for everyone involved. Proposals currently in the foreground are a merger with Abracadabra or a move to a DAO structure with more transparency. Ether (wETH) tokens, equivalent to $321 million at time of impact — the second-largest hack in decentralized finance history behind Poly Network’s $610 million seismic breach in August 2021. Wormhole stands in the industry known for its cross-chain token bridge service in which users can transfer crypto assets between chains such as Ethereum, Solana and Polygon, without interacting with centralized exchanges. After analyzing blockchain data, it was discovered that the attacker minted 120,000 wETH on Solana and then proceeded to exchange 93,750 wETH for Ether (ETH) worth $254 million. The remaining wETH was exchanged for Solana (SOL) and USD Coin (USDC) on Solana. After this, the hacker used some of the money to buy assets including SportX (SX), Meta Capital (MCAP), Finally Useful Crypto Karma (FUCK), as well as the highly anticipated soon-to-be-released asset, Bored Ape Yacht Club Token ( APE). In response, the Wormhole team promised to the community that in addition to the one-to-one covered asset total, the token would be fully recovered and offers a generous whitehat bug bounty reward to the malicious entity for full reimbursement of the funds. The hack risked serious cascading consequences for protocols and platforms within the Solana ecosystem that rely on the WETH supply for collateral. If their assets were not backed with wETH, investors would not be able to use the service, perhaps lose confidence and therefore short the asset. Solana fell about 13% in the news fallout. In a fortuitous turn of events, Wormhole’s parent company, Jump Crypto, stepped in to save the platform and recover all lost funds, a move confirmed by Wormhole in a tweet.1/2All funds have been restored and Wormhole is up again. We are deeply grateful for your support and thank you for your patience.— Wormhole (@wormholecrypto) February 3, 2022 Despite a resolution to the platform’s affected users, concerns remain about the whereabouts of the $321 million in lost money , in addition to the hacker’s intentions on the market. Ethereum Hash Rate Reaches New ATH in PoS Transition. Quantitative insights from popular data aggregation site Glassnode this week revealed that the hash rate for Ethereum hit a new all-time high of 1.11 petahash per second (PH/s) on January 28, surpassing the previous figure of 1.08 PH. /s, established just 15 days earlier. Fluctuations in the hash rate of proof-of-work (PoW) networks such as Bitcoin and Ethereum are the main indications of additional nodes joining the network, scenarios that ultimately result in higher security and more extensive decentralization of the network. #Ethereum $ETH Mining Difficulty just hit an ATH of 13,119,856,939,346,200Previous ATH of 13,076,339,792,989,700 was observed on Jan 23, 2022View metrics:https://t.co/s9t4z96wMA pic.twitter.com/Cxk3JMdeals1Qp— glassnodealts1Qp 2022 In December 2021, participants of the Ethereum network implemented the Arrow Glacier upgrade, an initiative designed to delay the activation of an encryption mechanism that should prevent the production of mining operations on the network, otherwise known as the “difficulty bomb.” stop. The transition from Ethereum to PoS is widely expected to take place in the second half of 2022, with Arrow Glacier being the latest upgrade, a market sentiment acknowledged by one of the core developers facilitating the upgrade, Tim Beiko, in a recent commentary. Token PerformanceAnalytical data reveals DeFi’s total locked-in value rose slightly over the week by 8.87% to reach $109.92 billion, in a bid to recover from the market’s downturn in recent weeks.Tezos (XTZ) posted the highest score in the top 100 after its partnership with Manchester United at 31.60%. Maker (MKR) came in second with a respectable gain of 25.54%, while Convex Finance (CVX) posted a 19.46% increase. Curve DAO Token (CRV) and Oasis Network (ROSE) gained 15.29% and 11.79% respectively. Interviews, Features, and Other Cool Stuff Thanks for reading our roundup of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically evolving space.
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