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Warp Finance adds Chainlink oracles to protect against flash loans

Warp Finance’s hack of $8 million could have been prevented with better oracles, the team says.

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Warp Finance, a DeFi lending protocol that suffered an $8 million flash loan exploit shortly after release, is now gearing up for a relaunch that will include an integration with oracles by Chainlink.

The inclusion of Chainlink oracles reportedly serves as protection against similar exploits. Flash loan exploits use a feature that allows borrowing an unlimited amount of funds, as long as it is also returned within the same Ethereum block. According to the team, security experts determined that the root cause of the exploit was an exploitable price oracle.

The issue seems to have been compounded by Warp Finance’s use of liquidity provider tokens for collateral. This feature is one of the main selling points of the protocol, as it allows committing yield-bearing tokens as collateral, combining both the yield from trading fees and from borrowers using the protocol.

According to DeFi whitehat hacker Emiliano Bonassi, the exploit relied on the fact that Warp Finance oracles did not properly calculate the underlying value of the pool tokens. The new protocol will use Chainlink price feeds for all critical functions — notably the value of the LP tokens used for collateral.

Chainlink and its founder, Sergey Nazarov, have often been adamant about the fact that price oracles need to cover as much of the market as possible. Indeed, many flash loan exploits are closer to market manipulation than outright software bugs. Even when no malice is present, incidents such as Compound’s excessive liquidation event in November could have been prevented with more market coverage. Compound relied only on prices from Coinbase and Uniswap, which temporarily posted a highly inflated price for Dai.

When asked by Cointelegraph why Warp Finance did not initially use Chainlink oracles, a spokesperson replied:

“Uniswap oracles have been an option for many projects that seek price feeds for a variety of use cases. As such, we launched similarly to other lending platforms for the trial phase, with the ability to upgrade later.”

The spokesperson further noted that a significant portion of DeFi projects are not using Chainlink, and they believe that the relaunch “gives our users much greater peace of mind about the security of our protocol.”

Warp Finance also drafted a compensation plan for affected users, already having recovered 73% of the stolen funds.

Source: https://cointelegraph.com/news/warp-finance-adds-chainlink-oracles-to-protect-against-flash-loans

Blockchain

The First Decentralized Crypto Volatility Index (CVI) To Be Launched By COTI

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Cryptocurrency traders that want to benefit from the infamous market volatility would be able to do so by taking advantage of COTI’s recently launched Crypto Volatility Index (CVI). Users will be able to place positions in anticipation of significant fluctuations in either direction.

The First Decentralized Crypto Volatility Index

COTI is a blockchain project that describes itself as a “fully encompassing finance” on the distributed ledger technology. It’s designed to meet and address challenges of traditional finance, such as fees, latency, global inclusion, and risk.

The project referred to traditional finance as well with its latest product – the Crypto Volatility Index. COTI said in a press release shared with CryptoPotato that CVI is inspired by the stock market’s Volatility Index.

CVI is already live on the mainnet, and users who want to participate can deposit Tether (USDT) to open positions or provide liquidity.

“The index enables traders to profit from market volatility by opening positions in anticipation of major movements in either direction. Users who expect volatility to increase can open a CVI position. If correct, they can take profit by selling their positions once the index has risen.”

The index will work in the opposite direction as well. If traders believe that the volatility will remain low, they can provide liquidity to the platform and profit by collecting fees paid by traders who have opened CVI positions.

The announcement further described the index as a “full-scale decentralized ecosystem that brings the popular ‘market fear index’ to the crypto market.”

Updates, Staking, And Liquidity Providing

COTI noted that users will also be able to connect the CVI index with their MetaMask or Trust Wallet accounts to manage their positions, provide liquidity, and deposit/withdraw funds.

Those who decide to provide liquidity need to deposit USDT for a minimum of 72 hours before receiving a share of the premiums collected by the pool. On the other hand, traders who have opened a position must maintain it for at least six hours before selling or closing it.

The index will work with its own native governance token called GOVI. The platform will enable users to stake the coin to earn fees and participate in voting. Token holders will also have a saying in determining which tradable assets are available on CVI, the allowed leverage, deposit amounts, and platform fees.

Future updates to the index include adding ETH and COTI as deposit tokens, more derivatives markets data sources, an advanced traders dashboard, margin trading, and an enhanced voting platform.

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Source: https://cryptopotato.com/the-first-decentralized-crypto-volatility-index-cvi-to-be-launched-by-coti/

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Long Bitcoin Unseats Tech Stocks as the Most Crowded Trade in January, BofA Reports

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Trading above $35,000, Bitcoin continues to pass milestone after milestone as reports show that the cryptocurrency received the most capital inflow this month compared to tech stocks and traditional investments. 

Long Bitcoin Wins Most Crowded Trade

A recent survey conducted by the Bank of America on fund managers with over $500 billion in AUM reveals that investors are bullish on Bitcoin’s price in the long term. 

The study shows that “long bitcoin” dethroned “long tech” as the most crowded trade in January 2021. 

Reuters reported Tuesday that this is the first time a long position on technology companies is losing the top spot since October. This is also the first time “long bitcoin” has ever ranked first in the financial markets. 

The milestone is coming just three months after less than 5% of the participants in November’s survey voted for “long bitcoin” as a preferred trade, with more than 65% of fund managers choosing “long tech.” 

A previous survey conducted by BofA showed that “long bitcoin” climbed up to the top three preferred trades in December as fund managers named it as the “third-most crowded” trade.

Shorting USD

While investors are bullish on Bitcoin, traders are still losing faith in the US dollar as they continue to bet against it. The survey places “short USD” as the third most crowded trade for the month, just one spot below its previous position. It was the second-most crowded trade in December. 

As reported earlier, one reason for the criticism against the US dollar is the FED’s money printing spree during the peak of the COVID-19 pandemic last year, which allegedly saw the creation of almost 20% of all existing USD. 

Investors argue that the FED’s action is a recipe for inflation, with many economists predicting that the USD value would fall. To protect themselves against the supposed impending dollar doom, investors and institutions seeking to preserve their wealth chose Bitcoin, which has turned out to be a win for them so far. 

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Source: https://cryptopotato.com/long-bitcoin-unseats-tech-stocks-as-the-most-crowded-trade-in-january-bofa-reports/

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New timeline charts Bitcoin’s price alongside historical events of the past decade

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Bitcoin (BTC) has travelled an eventful path since its creation in 2009. TradingView.com recently unveiled a BTC chart showing major events in the digital asset’s history, alongside the cryptocurrency’s ever-changing price.

Released on Tuesday, the chart points out potentially significant events on Bitcoin’s price path, showing a “consolidated history of Bitcoin overlaid on the de facto crypto charts (by TradingView),” the platform’s general manager, Pierce Crosby, told Cointelegraph.

TradingView’s team intends to update the chart every 14 days — though if major news breaks, the team says they will adjust the metrics sooner. Clicking various bubbles on the chart produces an explanation of each event. The site also lists events in blog-like form below the chart.

Crosby said:

“TradingView Timelines have been a unique undertaking by our core visualization team and show us the importance of putting ‘news in context’ (the corresponding chart). We expect this logic will become much more mainstream in the coming years to prove the relevance of a given news story. This is just the first step.”

Worth less than $1 in its earliest days, the digital asset rocketed up past $40,000 in 2021. Many major events have occurred along that price path, such as the Mt. Gox ordeal.

“Our initial observations show the immediate impact of historical events on the price of the asset,” Crosby said. The BTC timeline shows a barrage of events, although the most recent headlines focus on the numerous price hurdles broken by the asset.

“Looking at some of the early historical events, they are dwarfed by the price action in 2015 – 2017 the first period of time when current events captured the mainstream imagination of investors,” Crosby observed from the chart.

Such a timeline adds a tool for discussions on Bitcoin’s price as it pertains to events and possibly correlated reactions. “Looking solely at BTC price movements in the market gives an incomplete view of why its price fluctuates the way it does, in a seemingly volatile manner,” Crosby said, adding:

“Timelines is the first comprehensive source to share price movements along with corresponding real-life events, so investors can understand why there are certain spikes or dips, helping inform them for the future and giving them a deeper understanding of the asset they’re trading.”

Source: https://cointelegraph.com/news/new-timeline-charts-bitcoin-s-price-alongside-historical-events-of-the-past-decade

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