Arbitrum’s airdrop hype sweeps the DeFi world: finance redefined

Welcome to Finance Redefined, your weekly dose of key decentralized finance (DeFi) insights – a newsletter to bring you key developments over the past week.

The long-awaited airdrop of Layer 2 scalability protocol Arbitrum has been dominating the headlines all week. The token hype has led to exploits, fake airdrops, and even a significant surge in volume for other Layer 2 protocols.

In addition to the Arbitrum hype, the Euler Finance hack has also seen some new developments. The person or group behind the attack returned some of the funds after the protocol’s developers placed a $1 million bounty on their heads. Some of these funds were also moved to blacklisted North Korean addresses.

While we all read a lot about DeFi exploits every now and then, a recent report sheds light on insurance payouts in the millions in 2022. Ninety percent of all DeFi insurance claims paid out since inception were paid out in 2022.

In a further development surrounding Ethereum staking, MetaMask Institutional has launched a new staking marketplace to give institutional users access to solo Ether (ETH) staking.

The top 100 DeFi tokens have had a mixed week in terms of price action. A majority of them traded in the green on the weekly charts while a few others lost some gains during the market volatility towards the end of the week.

Beware of Fake Arbitrum Airdrops, Community Warns

Ethereum’s Layer 2 scaling solution Arbitrum’s upcoming ARB token airdrop appears to have become a popular target for scammers, with the community warning of hundreds of phishing scams aimed at tricking crypto users. The hype surrounding the airdrop has led to more than a few attempts by scammers to set up fake token airdrops aimed at stealing funds from victims before the official event.

The hype surrounding its airdrop has also helped another Layer 2 solution, zkSync, to see significant week-over-week growth. Following Arbitrum’s airdrop announcement, eligible crypto users are also already selling them on OTC markets.

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DeFi insurance payouts hit $34.4 million in 2022: report

According to a report by DeFi analytics firm OpenCover on March 21, DeFi insurance companies paid out $34.4 million in claims in 2022. Only $36.9 million of such claims have been paid since OpenCover began tracking the data. Notable payouts include $22.5 million during the May 2022 collapse of the Terra ecosystem and $4.7 million from the November 2022 crypto exchange FTX collapse.

Despite the surge in payouts, OpenCover said that according to its data, only $231 million worth of funds had been insured in DeFi protocols, accounting for just 0.5% of the total value locked in the DeFi industry. Cointelegraph reported on Jan. 5 that DeFi security exploits grew 47.4% year over year in 2022 to $3.64 billion.

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Euler Finance’s exploit saga sees new developments

Ethereum-based lending protocol Euler Finance may be one step closer to recovering funds stolen in a $196 million flash lending attack last week, with private talks now opening with the exploiter.

In an on-chain message to Euler on March 20, days after he sent funds to a red-flagged North Korean address, the exploiter claimed he wanted to “reach an agreement” with Euler.

On March 18, about 3,000 ETH ($5.4 million) was sent back from the hacker’s address to Euler Finance’s deployer address. Blockchain investigator PeckShield identified three transactions used to send the funds.

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MetaMask Institutional unlocks the solo ETH staking marketplace

MetaMask Institutional is said to be a way to create new Ethereum validators after announcing a new staking marketplace for its institutional clients.

Institutions using MetaMask’s institutional wallet and custody service can manage ETH staking through four providers – ConsenSys Staking, Allnodes, Blockdaemon, and Kiln. The marketplace aims to simplify access and management of solo staking and allow institutions to become Ethereum network validators.

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Overview of the DeFi market

Analytical data shows that the total market value of DeFi has risen to over $50 billion in the past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market cap had a bullish week, with most tokens trading green except for a few.

Thank you for reading our roundup of this week’s most influential DeFi developments. Join us next Friday for more stories, insights and information in this dynamically evolving space.

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