The rising tokenization of Bitcoin and the emergence of yield farming has propelled the expansion of the decentralized finance sector over the prev
The rising tokenization of Bitcoin and the emergence of yield farming has propelled the expansion of the decentralized finance sector over the previous three months in keeping with ConsenSys.
The second quarter report into Ethereum-based DeFi emphasizes the importance of the full variety of tokenized BTC overtaking the sum of BTC on Bitcoin’s personal layer 2 scaling answer, Lightning Community.
Wrapped Bitcoin (WBTC) represents greater than two-thirds of the tokenized BTC on Ethereum, however the report notes there was a latest proliferation of Bitcoin tokenization protocols. Round 3,000 of greater than 11,000 BTC on Ethereum was tokenized by way of renBTC, sBTC, imBTC, and hBTC.
“Cross-chain interoperability is anti-maximalist, however is extra seemingly the way forward for blockchain,” the report asserts.
Yield Farming drives DeFi adoption
The report additionally notes the rising reputation of ‘yield farming’ — the era of passive returns by way of systematic lending of crypto belongings throughout varied DeFi protocols.
The launch of Compound’s governance token in June was a serious catalyst that sparked elevated curiosity in yield farming, with every day energetic DeFi customers and the sum of Ether locked in DeFI protocols surging late within the month.
Nonetheless, ConsenSys’ knowledge signifies that the recognition of yield farming has failed to draw massive numbers of recent customers from exterior of the DeFi sector, with practically 2,000 ‘tremendous customers’ representing a big share of exercise within the area.
Main hacks rock DeFi in 2020
The report highlighted main safety incidents focusing on DeFi platforms Uniswap, Lendf.me, and Bancor.
On April 18, $340,000 was stolen from Uniswap by way of a reentrancy assault vector that compromised Tokenlon’s ERC-777 token that underpins its imBTC protocol.
The next day noticed $25 million stolen from Lenf.me after an identical assault, nevertheless, the funds have been returned after the hacker by chance leaked their IP tackle which resulted in subsequent negotiations between the platform and its attacker.
On June 28, Balancer suffered a lack of roughly $450,000 when a hacker exploited an incompatibility between ERC-20 ‘deflationary tokens’ STA and STONK and Balancer’s underlying sensible contract.
Collectively, the three assaults resulted in over $26 million being stolen, nevertheless, nearly all of the funds have been returned after the funds stolen from Lendf.me have been returned.
“Safety incidents are inevitable in rising know-how,” ConsenSys concluded, noting that “the DeFi group continues to develop methods to hedge towards it.”