A N-UwU Exploit Hits Crypto

Crypto hack updates, a fresh bitcoin chart, five crazy crypto stats, and a crypto 101 on DEXs.

OVERVIEW

A N-UwU Exploit Hits Crypto 🧐

It was a quiet start to the week in the land of crypto, with bitcoin and other risk assets awaiting this week’s inflation data and Fed decision. ⏸️

In today’s Litepaper, the exploit hitting UwU lending and a bitcoin chart that’s begging for a clear catalyst.

Also on deck are five crazy crypto stats you might not know and a crypto 101 on the world of decentralized exchanges (DEXs).

P.S. As noted last week, this is The Daily Rip writer (Tom Bruni), and I am covering for Jon this week as he enjoys some well-deserved time off. Just an FYI in case you notice any changes to the content. 👍

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total and altcoin market cap YTD:

NEWS
UwU Lend Losses $20 Million In Latest Exploit 🚨

Several blockchain security firms reported that the lending and liquidity protocol suffered an exploit worth $19.30 million. 💸

On-chain data showed the hacker’s wallet moved several assets: wrapped Ethereum (WETH), wrapped Bitcoin (WBTC), and stablecoins like USDC over the course of a few minutes.

It’s unclear how the exploit happened, with the UwU Lend team posting to X that they paused the protocol and are investigating the situation. 🔍

Data as of this morning showed that UwU Lend currently holds over 82,000 Ethereum, but approximately 81% of those funds ($247/$305 million) are borrowed. 😬

That’s what we know since this morning, and we will keep an eye on how this story develops. 👀

TECHNICAL ANALYSIS
Crypto Awaits A Catalyst 🕰️

It doesn’t take a rocket scientist (or technical analyst) to identify that bitcoin is in a long-term uptrend, with the chart below showing a clear uptrend line from last October’s lows topped off with resistance near $74,000.

That said, although most are expecting this bullish pattern to resolve to the upside and result in new all-time highs, nobody can identify a clear catalyst that will make it happen. 🤔

As the 7-day rate of change (ROC) shows, bitcoin volatility is once again contracting to historically low levels. Past compressions have led to strong moves in one direction or another, and many expect that outcome again. 🐢

The most likely catalyst is the FOMC’s interest rate decision and updated economic projections on Wednesday at 2:00 PM ET, which are expected to give risk assets some pep in their step.

In what direction though remains to be seen. 🤷

CRYPTOCURRENCY
Five Crazy Crypto Facts You Might Not Know 😲

It’s Gone Forever

Fact: An estimated 20% of all $BTC is lost forever. People have lost private keys, passed away without sharing access, or thrown away hard drives with fortunes on them. That’s about 3.7 million BTC, or tens of billions of dollars, lost in the digital abyss. 💸

We Still Don’t Know Who He Is

Fact: Satoshi Nakamoto, the creator of Bitcoin, is still unknown. Despite numerous theories and investigations, Satoshi's identity (or identities) remains one of the biggest mysteries in tech history. The enigmatic creator holds about 1 million BTC, untouched. 🕵️‍♂️

Ethereum Is Not The Original Ethereum

Fact: Ethereum Classic ($ETC) is the original Ethereum blockchain.

In 2016, a major hack exploited a vulnerability in The DAO, a decentralized autonomous organization, resulting in the theft of $50 million worth of Ethereum.

Vitalik Buterin and much of the community proposed a hard fork to recover the stolen funds and restore the network's integrity. However, blockchain purists like Charles Hoskinson believed that the blockchain's immutability was paramount and opposed the fork.

The resulting split created two separate blockchains: Ethereum ($ETH), which reversed the hack, and Ethereum Classic, which maintained the original transaction history. 🤯 

It Takes A Lot Of Power To Mine Bitcoin

Fact: You may have already heard that the energy needed to mine Bitcoin is on par with or greater than the same amount to power some countries, like Argentina, Norway, New Zealand, or The Netherlands.

What you might not know is that Bitcoin’s energy usage is greater than that of the entire airline industry and Google’s ($GOOG) global operations. ⚡️ 

Dogecoin And Litecoin Are Mined Together

Fact: Bet you didn’t know this one - $DOGE and $LTC are both ‘merge-mined’. In fancy schmancy speak, the official name is Auxilliary Proof of Work (AuxPoW). AuxPoW allows miners to mine both Dogecoin and Litecoin simultaneously using the same computational power. And, get this, this has been the case since 2014. 👩‍❤️‍💋‍👨 

CRYPTO 101
Journeying Into the World of Decentralized Exchanges (DEXs) 🕹️ 

A crucial part of the crypto world, decentralized exchanges, or DEXs, enable traders to transact directly with each other without the need for intermediaries like banks or traditional exchanges. Instead of relying on a central authority to oversee and authorize transactions, DEXs utilize blockchain technology to facilitate and validate peer-to-peer trades.

Key characteristics of DEXs:

  • Peer-to-peer trading 🤝: In a DEX, the trading process involves a direct exchange between two parties.

  • Non-custodial 💼: DEXs do not hold your funds. Instead, you retain complete control of your assets.

  • Operates using smart contracts 🤖: Trades are executed and facilitated through smart contracts, self-executing contracts with the terms of the agreement directly written into the code.

The Inner Workings of DEXs

DEXs operate on blockchain networks that support smart contracts, such as Ethereum ($ETH) and Binance Smart Chain ($BNB). When a trade is initiated on a DEX, the platform’s smart contract kicks into gear, automatically executing the transaction following its predetermined set of rules. This ensures that the terms agreed upon by both parties are adhered to without the need for trust or the oversight of a third party.

💡Remember: In a DEX, the platform itself never comes into contact with your funds. Everything is managed within the blockchain through the smart contract!

Advantages of DEXs: Trading with Freedom and Privacy

Decentralized exchanges bring a host of unique advantages to the table:

  • Censorship resistance: As DEXs are decentralized, it is challenging for governments and other institutions to shut them down or censor transactions. This makes DEXs a robust platform for maintaining the free flow of digital assets 🔒.

  • Privacy: Unlike centralized exchanges, DEXs require minimal personal information, enabling you to keep your personal details private while you trade.

  • Control over funds: Since DEXs are non-custodial, you have complete control over your assets at all times. This means that the risk of losing your funds due to the exchange being hacked or going bankrupt is significantly reduced.

Disadvantages of DEXs: Challenges on the Road to Decentralization

While they have significant advantages, DEXs also have their challenges:

  • Usability: For newcomers to the crypto world, DEXs can be daunting. They generally require a higher level of technical knowledge compared to traditional exchanges, and the process of setting up wallets and managing private keys can be complex💻.

  • Speed and cost: Depending on the blockchain network they operate on, transactions on DEXs can be slower and more costly than on centralized exchanges due to network congestion and high gas fees.

  • Smart contract risk: While smart contracts enable trustless transactions, they’re not immune to bugs. If a smart contract has a vulnerability, it could be exploited, leading to user losses.

Popular DEXs

The crypto landscape is awash with numerous DEXs, each with its own unique features and advantages:

  1. Uniswap: As the largest DEX on the $ETH network, Uniswap ($UNI) has become synonymous with decentralized trading. It offers a simple interface and a vast selection of Ethereum-based tokens for trading 🦄.

  2. SushiSwap: A community-driven DEX, SushiSwap ($SUSHI) offers a range of additional features, including yield farming and staking. It’s known for its active community and innovative approach to decentralized finance (DeFi).

  3. PancakeSwap: Operating on the Binance Smart Chain, PancakeSwap ($CAKE) has become popular due to its lower transaction fees and unique features like lotteries and NFT trading.

Embracing the Future of Decentralized Exchanges

Decentralized exchanges represent a significant step towards a fully decentralized financial system. With continuous advancements in technology and an increasing emphasis on privacy and control in finance, it’s likely that DEXs will become more user-friendly, efficient, and secure.

Remember, as with all crypto ventures, knowledge is power. Ensure you understand the workings of the DEX you choose to use, be conscious of the risks involved, and use it responsibly!

NEWS
Crypto News In Three Sentences 📰

🗳️ Industry Tries To Head Off Senate Crypto Bill

A surprise section in a recent spending bill could create significant sanctions threats for the crypto industry, which many call a flawed approach to a worthy AML/CFT goal. Industry experts are meeting with the Senate intelligence committee’s chairman to express their concerns regarding the overly broad language and scope. Coindesk has more.

🕵️ Crypto Custodian Bakkt Is Exploring Strategic Options

The custodian and trading firm is reportedly considering a potential sale or break up, enlisting the help of a financial advisor to explore its options. Although it recently announced a new partnership with Crossover Markets, its rebound still leaves its stock down nearly 99% from its post-SPAC highs set in 2021. More from TheBlock.

💰 Fidelity International Tokenizes Money Market Fund

The U.K. firm joined JPMorgan’s Tokenized Collateral Network (TCN), piloting the tokenization of its own money market fund with Onyx Digital Assets. It’s the latest move in a growing trend of tokenizing traditional financial assets, with firms like Fidelity International and JPMorgan leading those efforts. Coindesk has more.

📈 Crypto Industry Shifts From ‘Early Adopters’ To ‘Early Majority’

Binance CEO Richard Teng shared this comment as his company reached 200 million registered users worldwide, the most of any crypto exchange by far. The “swift growth” that’s caused its user count to double over the last 26 months has been largely due to the improving landscape for the crypto industry globally. More from Cointelegraph.

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