DeFi (Decentralized Finance) is or will be one of the most discussed topics for 2020. This refers to the development of applications from the classic financial sector, such as lending, sending and investing money, with the difference that these are to be decentralized. Just how great the need for this is, it is shown by the fact that billions of people worldwide do not have access to a functioning financial system, but would urgently need one.
Banks as intermediaries could also be eliminated. That is why some people assume that DeFi “could be the next big thing.” However, despite this euphoria, one has to admit that this trend is still in its infancy and a lot of development work is still needed. That is also shown by the recent hack of the DeFi application “Lendf” from dForce, when $25 million in Ethereum and Bitcoin were stolen.
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Ethereum DeFi Hack makes $25 million disappear
Lendf.me is one of two protocols developed by the dForce Foundation. According to the Twitter page of Lendf, it is “by far the largest fiat-backed Stablecoin DeFi rental protocol.” According to DeFi Pulse, the Ethereum DeFi heavyweight was hacked last Saturday night. The protocol lost 99% of its deposits when $25 million in ethereum and Bitcoin were stolen from its wallets.
“Lendf.me confirmed that it was attacked at block level 9899681 on Sunday at 8:45 Beijing time,” Lendf.me told Chinese media company Chain News.
Other developers of DeFi protocols speculated that the attack was caused by “imBTC”. This is an Ethereum Token, which is coupled 1:1 to Bitcoin. This was used as security and could have been proven fraudulent, allowing the attacker to withdraw funds almost for free.
Protocol website not available
The investigations of those responsible have not yet been completed. According to dForce Foundation CEO Mindao Yang, “the team is still” investigating the incident. He calls on users not to include Ethereum and Co. in the protocol.
On the website of the Ethereum Protocol, Lendf.me also posted the following: “Do not make any more deposits!” Meanwhile, the site is no longer accessible, although this may be a security measure to ensure that no more money is lost.
Just last week, the dForce Foundation completed a strategic round of $1.5 million led by Multicoin Capital and supported by Huobi Capital and the Chinese bank CMB International (CMBI). Huobi itself is one of the largest crypto companies, while CMBI is the investment arm of one of China’s largest banks.
However, Multicoin Capital’s investment made headlines because of the company’s strong support. Its director, Mable Jiang, said: “dForce is building the first” super network “of DeFi protocols.”
The funds were earmarked for staff increases and the introduction of new DeFi products next year.
As unfortunate as it is that Lendf and the dForce Foundation, as a DeFi project on Ethereum, suffered a bitter, perhaps final blow with the attack, the hack once again impressively demonstrates the importance of personal responsibility in the crypto sector.
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