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yETH and Curve Go To War

yETH dai draining by arbitrage due to Curve Y pool flaw, Sep 2020The hottest new dapp that could have fueled the price of eth seems to have courted a bit of a problem, the Curve (CRV) guys don’t seem to like them…

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The hottest new dapp that could have fueled the price of eth seems to have courted a bit of a problem, the Curve (CRV) guys don’t seem to like them too much anymore because the yethers are selling their curves.

This wouldn’t have mattered if yETH didn’t find an oversight in the Y Curve pool that underprices dai.

“Yearn is repaying CDP early using Curve to mitigate as there is not enough DAI to repay the debt quickly. $44M DAI in Curve this morning, $20M now,” Julien Bouteloup, a long time eth dev, says.

That was after he said the yETH pause was an “emergency shut down & you’re all stuck in yETH vault #13972 while $ETH is crashing!”

Something that Andre Cronje called “pointless sensationalism” and “simply false.” All suggesting the happy couple is having a bit of a row.

You see the Y Curve pool is selling dai for cheap. So when a lot of eth was sent to yETH, about $100 million, and that eth through collateralization got a lot of dai that was sent to the Y Curve pool, arbitrage boters quickly munched that new dai because it was going for cheap.

That’s because of something called A which from the sound of it seems to be the intensity of the shape of the curve.

Meaning at A 2,000, the contract sends the signal that you really should convert this dai to some other stable coin because it has hit the target of $1, when the dai free market price is say $1.01. Small difference, but not with big amounts. Cronje says:

“The high A of y pool, has essentially allowed arbitragers to keep getting DAI for 1, when in fact they should have been paying 1.01 ~ 1.02.

So by bringing A lower, it makes DAI more expensive to buy. But, since y pool is incredibly low on DAI, it also makes DAI nice to sell to it.

This will keep the pool more evenly spread between assets, which I generally think is positive for all LPs, will remove a source of cheap DAI from the market (good for DAI). And create a healthier balance of assets.”

The proposed solution is to halve the A to 1,000, but this is at the Curve protocol layer, and there the Curve holders decide, and one of them says:

“Although I am generally in favor of collaboration with Andre Cronje, I will be voting against this proposal.

Everyone is free to sell their earned CRV but I have no interest in helping make that process easier or in this case safer to do at a large scale.

Growth of the yeth vault only pushes CRV price down and brings absolutely no LPs invested in the curve protocol success.

I want distributed CRV to end up in the hands of investors that could decide to hold it if incentivized properly, the vault does not offer that option at all.”

Ouch, and what must hurt even more is that you can’t even blame him. However, this flaw in the Y Curve pool applies regardless of whether there is or isn’t a yETH because it existed before yETH came around, it’s just now that it became evident to experts who can do something about it.

So you have here a pretty awful clash between what is objectively reasonable and right, and between what is ‘objectively’ better for one’s pocket.

The former one is easy. What is right is right. There’s a flaw, though not a fully critical one, but there’s a mistake that should be addressed.

The latter one is hard to objectively analyze because there are tradeoffs in as far as obviously CRV holders wouldn’t want automated selling of their token, but presumably they wouldn’t want the Y Pool to go down or really, presumably they wouldn’t want to be thieves either because they’re facilitating the taking of money for cheap when there’s nothing one can say about it if they were unaware, but now that they know, well it’s basically a refusal to fix what is theft really.

It isn’t theft because you willingly put it in there and in this case the yeth guys came up with y pool as well, so where the past is concerned there’s no argument there.

But even now it isn’t theft because you’re willingly and knowingly putting it in there. And yet, it kind of is theft at this point to prevent its fixing and such prevention creates further risks in as far as devs may well consider Curve to be a bit of a moat.

You’re kind of at their mercy if you build on top of it and in this case, Cronje says:

“Y pool has also become something closer to a stable savings account and meta stable coin for yearn and a lot of other communities. So having a more equally proportioned pool gives a lot more safety and security.

We have been building and integrating a lot of solutions ontop of y specifically because till now, it served that purpose so well.

I have no objections to all veCRV holders to vote for 0 CRV rewards for y pool, but I would like to keep using it as the defacto meta stable pool + savings account.”

If we read this correctly he is saying the Yearn team has built an entire ecosystem around this pool, and that entire ecosystem is basically at the mercy of another ecosystem that may have its own interests which in this case kind of overlap, but also conflict.

Making this a complicated situation and a tough decision for CRV holders, especially the CRV dev team.

Bouteloup happens to be part of that team and from his public statements, he isn’t happy about yETH at all and seems to be happy to see it potentially come down crashing, naturally maybe because he is part of the CRV team.

However, he hasn’t made any statements on this A matter as far as we can see, and the CRV team in general has not made any statement so far.

As such, what they’ll decide is to be seen because there can easily be a difference about not liking the fact your token is insta sold by some mining dapp, and not fixing your own dapp.

There can also be other wider implications if there’s a negative decision, with it unclear whether Yearn can just fork this pool and fix the A, something that you’d think would be a checkmate, except it wouldn’t mine CRV but maybe some Y token.

Or they could just offer the option to get CRV as CRV instead of insta selling them with devs now probably realizing you can interlope but you better be careful about it if you’re doing something the other dapp might not like and there is something they can do about it, like in this case not fix your/their pool.

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Bybit to Cease Services for UK Citizens Following the FCA Ban on Crypto Derivatives Trading

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The first consequences from the FCA ban on crypto derivatives trading in the UK are evident for the popular digital asset exchange Bybit. The company announced earlier that it will suspend its services to all customers based in the United Kingdom. 

  • Established in 2018, Bybit is a cryptocurrency exchange headquartered in Singapore with a reported user base of over one million registered clients. However, the firm will seize offering its services to UK-based customers, according to a recent press release
  • The statement informed that all UK users have to close all of their opened positions and withdraw all account balances by 8 AM UTC, March 31st, 2021. Following that date, UK citizens will be “restricted from accessing or performing any trading activities on Bybit.” 
  • Furthermore, the exchange will immediately restrict all new registrations using UK mobile numbers and/or IP addresses. 
  • Bybit’s decision is a direct consequence of a ban on crypto derivatives trading in the UK instituted by the country’s regulator – the Financial Conduct Authority (FCA). 
  • CryptoPotato reported last year that the watchdog planned to prohibit the sale, marketing, and distribution to all retail customers of crypto derivatives and exchange-traded notes (ETNs).  
  • At the time, the FCA described such products as “ill-suited for retail customers due to the harm they pose.” It also outlined that traders are unable to determine a reliable value because of the extreme volatility in the market and inadequate understanding. 
  • Interestingly, though, even the UK population couldn’t stop the FCA from implementing the ban as a survey compiled by the watchdog suggested that over 97% disagreed with the decision. 
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Source: https://cryptopotato.com/bybit-to-cease-services-for-uk-citizens-following-the-fca-ban-on-crypto-derivatives-trading/

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PAID Crashes 70% In Minutes as Network Purportedly Exploited

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PAID Network, one of the most popular Initial DEX Offerings (IDOs) that took place on Polkastarter’s platform a while ago and brought tremendous returns to private sale investors, is going through what seems as a massive attack.

  • PAID Network, one of the most popular and heavily promoted IDOs that brought massive returns to private sale investors, seems to have been exploited.
  • Multiple reports on social media point towards the exploit.
  • It appears that over 59 million PAID tokens were minted and sold through Uniswap.
  • This resulted in the price of the token taking a nosedive and decreasing by more than 80% in minutes.
paidchart
PAID/USD. Source: Dextools
  • At the time of this writing, the team hasn’t come up with an official statement.
  • Many in the cryptocurrency community speculate that this is a rug pull as the owner of the contract had the capability to mint new tokens.
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Source: https://cryptopotato.com/paid-crashes-70-in-minutes-as-network-purportedly-exploited/

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Bitcoin Losing the $50K Mark, Entering Bearish March: The Weekly Crypto Recap

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This week was tough across the board, not just in the cryptocurrency market. It was marked by a serious correlation between Bitcoin and the S&P 500, as well as the entire legacy market, in general.

As CryptoPotato reported, the abovementioned correlation reached a 5-month high. While this seems to be bearish in the short term, given that the stock market slumped following government bond yield that gave the market a jolt, there’s also a bullish argument to be made.

Last weekend, the US House of Representatives passed President Biden’s $1.9 trillion COVID-19 Relief Package, which also got a 51-50 approval vote in the senate. Should the legislation become effective, it could be the case that markets will recover. Given the high correlation, this might also play out positively for Bitcoin and the cryptocurrency market as well.

Nevertheless, the week wasn’t favorable for the market as the primary cryptocurrency, as well as the majority of large-cap altcoins, remained indecisive and failed to regain the momentum they previously had. Presently, Bitcoin is trading at around $49,000. Historically, March has been one of the two most bearish months for Bitcoin, on par only with September. After all, we did see Bitcoin drop by 50% in 2 days last March upon the announcement of the coronavirus pandemic.

Elsewhere, major news took place all over. Binance Smart Chain saw its first major rug pull as Meerkat Finance saw its protocol drained of over $30 million in both Binance Coin and BUSD.

We saw developments in regard to the BitMEX – CFTC fiasco. In a recent filing, it was revealed that the former CEO of the derivatives exchange, Arthur Hayes, could surrender to US authorities in Hawaii this April.

On the more positive and funny side, Mark Cuban’s Dallas Mavericks announced that they would start accepting Dogecoin as a means of payment for tickets and merchandise. The billionaire celebrity gave the most earth-shattering explanation for the move, saying they did it “because we can.”

It’s certainly interesting to see how the global macroeconomic outlook will pan out in the coming days. Will the markets start to recover, or is there more pain ahead? Only time will tell.

Market Data

Market Cap: $1,444B | 24H Vol: 130B | BTC Dominance: 60.7%

BTC: $48,959 (+2.94%) | ETH: $1,531 (+0.38%) | XRP: $0.462 (+3.89%)

Bitcoin Correlation With S&P 500 at 5-Month High: Is This Bearish for BTC? Data reveals that the correlation between the S&P 500 and Bitcoin’s price has hit a 5-month high. This was clearly confirmed over the past week as the cryptocurrency is following the traditional stock market very closely.

US House Passes $1.9 Trillion COVID-19 Relief Package, $1,400 Direct Check Provisions Included. The US House of Representatives has passed President Biden’s $1.9 trillion stimulus bill the past weekend. The Senate also voted 51-50 to proceed with the regulation. If successful, this will see another financial injection into the US economy.

First Major Rug Pull on Binance Smart Chain? Over $30 Million Drained. Meerkat Finance might have been the very first major rug pull on the novel Binance Smart Chain. The protocol saw over $30 million drained from it in what appears to be a rug pull. The community was taken ablaze as many people lost a lot of money.

Former BitMEX CEO Arthur Hayes Could Surrender in Hawaii in April. The former CEO of BitMEX and one of the most influential figures in the cryptocurrency industry, Arthur Hayes, could surrender to US authorities in April in Hawai. This became clear after new court documents were filed.

Mark Cuban’s Dallas Mavericks to Accept Dogecoin Payments. The Dallas Mavericks – an NBA team owned by famous billionaire and Shark Tank star Mark Cuban, will be accepting Dogecoin payments for tickets and merchandise. This became clear after a recent announcement where Cuban gave an astonishing reason for the move – “Because we can!.”

Tim Draper Handpicks Netflix as the Next Company to Purchase Bitcoin. According to one of the most popular venture capitalists in the cryptocurrency field, Tim Draper, the next major company to buy Bitcoin might be the streaming giant Netflix. He believes that the company’s co-CEO is the guy in control, and he thinks he’s an “innovative guy.”

Charts

This week we have a chart analysis of Bitcoin, Ethereum, Ripple, Polkadot, and Cardano – click here for the full price analysis.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


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Source: https://cryptopotato.com/107410-2/

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