March 16th, 2023: Weekly Web3 Newsletter by Sujith Godavarthi

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Wassup web3 people. Sujith.eth is back with more bank stuff along with crypto and JPEGs! And all thanks to our well-optimized financial system😢

What’s Happening in Web3

1. Banks & Crypto

Banks & Crypto (current scenario):

Silvergate Bank 🔴
Silicon Valley Bank 🔴
Signature Bank 🔴

In the USA, these three banks stood out as the most likely options for crypto businesses seeking fiat banking. And now they are gone…Basically, nobody left to bank crypto companies in the US.

Signature Bank, $SBNY, has been closed by State authorities citing systematic risk. All depositors will be made whole.
Coinbase $COIN says it holds $240 million in the now-collapsed Signature bank. Ripple had an undisclosed amount of cash in Silicon Valley Bank says CEO Brad Garlinghouse.
SVB depositors will have access to all of their money Monday. Shareholders and certain unsecured debtholders will not be protected.
Treasury Secretary Janet Yellen said Sunday that the federal government would not bail out Silicon Valley Bank, but is working to help depositors who are concerned about their money.”
Who’s paying the bailout money? Fees on banks. A special fund was set up after the 2008 financial crisis. It currently has $100 billion. No taxpayer money will be used.

“I can’t wait for Biden to get on the speech again and talk about how great the economy is and how it’s moving forward and getting stronger by the day. And this is an indication that whatever he says is not true. And maybe the American people will finally wake up and understand that we’re living in very tough times, that, in fact, that a recession may have already started. Who knows? But it doesn’t look good”: Bernie Marcus, Home Depot co-founder

2. Not Crypto’s Fault

Cathie Wood said FDIC and others will prevent the U.S. from participating in the most important phase of the internet revolution.

“In our view, crypto is a solution to the central points of failure, the opacity, and the regulatory mistakes in the traditional financial system. Made the scapegoat for policy mistakes, crypto will move offshore, depriving the US of one of the most important innovations in history,” she said.

This is in response to the letter Tom Emmer (Congressman) sent to FDIC asking to provide clarification on whether it had issued any instructions to banks not to offer banking services to cryptocurrency firms, and whether any such instructions would lead to harsher scrutiny of banks taking on new crypto-related clients.

On the other hand, Cardano’s Founder Charles Hoskinskon believes the cryptocurrency industry should differentiate itself from the “unstable and volatile” banking sector.

And that is why I stay poor!!

3. Market Overview

Notable Coins (Top 5): Stacks (STX) is in the top gainers of the week (+45%), and Maker DAO (MKR) is in the top losers of the week (-14%).

Bitcoin is up 12% in the past 7 days whereas Ethereum is up 7.3%. Pretty good, I’d say for investors. Doesn’t matter if you are poor like me.

Polygon, Solana, and also PolkaDOT showed green signals in the past 7 days.

4. NFT Updates

Mocaverse NFTs minted out and generated 3,552 ETH (US$5.5 million) sales volume in the first 48 hours.
9GAG has filed patents for various digital tokens and NFTs. Trademarks even include the word “PFP”: Profile Picture.
Amazon is launching its own NFT platform on April 24th, first showcasing 15 collections.
Gitcoin Presents (the “Vitalik NFT”) floor price went to 0.7 ETH (Mint: 0.05 ETH) and is now less than 0.15 ETH. NFT mfers are built differently, as Joe Rogan says.
Someone sold 82 Cool Cats NFTs for a whopping 168.52 ETH.

5. DeFi Protocol Exploited For $200M

Euler Finance suffered a $200M exploit!! What happened?

Decentralized lending protocol Euler Finance suffered a $200M exploit due to a vulnerability in its code that went undetected for 8 months.

The flaw was not in the scope of any previous audits and now the protocol was exploited (on March 13th).

An auditing partner of Euler Finance, Omniscia, has released a post-mortem report stating that a vulnerability exploited by hackers originated from a decentralized finance lending protocol’s incorrect donation mechanism.

This led to an over-leveraged position that the attacker could liquidate by artificially causing it to go “under-water.”

The lending protocol lost almost $200 million because of that. The feature at the center of the vulnerability was not audited by Omniscia.

Despite a $1 million bug bounty in place, the vulnerability remained on-chain for eight months until it was exploited on March 13th.

The flawed etoken module has since been disabled.

Following the attack, Euler Finance is working with security groups to perform audits and has tapped law enforcement agencies to recover the funds.

They’re offering a $1 million reward for information about the attackers behind the exploit.

Euler Finance’s developers have sent on-chain messages to the exploiters, stating that if 90% of the funds aren’t returned within 24 hours, they’ll launch a $1 million reward for information leading to their arrest and the return of all funds.

This incident highlights the importance of thorough auditing and testing in DeFi protocols. Even a seemingly small vulnerability can result in significant losses….

Quick Bites

A smart contract vulnerability was attacked on the Hedera Mainnet, which led to the theft of several liquidity pool tokens.
Meta is working on a decentralized text-based app aka a decentralized Twitter version, codenamed P92.
President Biden calling for a 30% tax on all electricity used to mine.
Circle confirms $3.3 billion of the ~$40 billion $USDC reserves are in collapsed Silicon Valley Bank.
Blockfi, the bankrupt crypto lender, has $227M stuck on SVB. Can it get any worse??

Binance NFT Marketplace has extended support to Polygon, so now you can use $MATIC to purchase NFTs on the marketplace.
A hacker found a bug in the DeFi lending platform called Tender. fi and borrowed $1.6M in ETH using only $71 worth of GMX tokens as collateral. Update: The hacker has paid back the stolen money in exchange for a $97,000 bounty reward in Ether.

GPT-4 is here. It’s been tested out by scanning an active Ethereum smart contract and it successfully found the vulnerabilities.
20+ web3 games coming to the Epic games store this year.
You can now purchase NFTs on BLUR using mobile devices.
The South Korean government invested $18.1 million in the Metaverse Fund.
Meta rug pulled us 😅! It is winding down NFT support across Instagram & Facebook. We’re winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses.
Form Function, a Solana marketplace focused on one-of-one, single-edition artwork announced that it’s closing the marketplace on March 29th. A year ago, they raised nearly $5 million in funding.
sold 21 punks in one go 👀

Silicon Valley Bank Owes $150M To Roblox.
Bitcoin is already up 50% this year, beating stocks and gold. Yay!!
Shiba Inu Shibarium alleged to have copied blockhain code from Rinia blockchain. Just saying! We don’t care about Shitcoins. Do we?

Interesting Numbers

9,861

U.S. government moved 9,861 BTC from a self-custody wallet (that has 40k BTC) to Coinbase.

2.57B

FBI says crypto investment fraud rose 183% to $2.57 Billion in 2022.

Interesting Reads

Do You Know?

Ark Invest bought over 350,000 shares in Coinbase ($COIN) a week ago, worth more than $20.5 million, in its biggest one-day purchase of the year.

Meme Of The Week 😂

Disclaimer: None of this is financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and always do your own research.

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