🧐 New DeFi Dapp Attracts $6B Over the Weekend
Hello Defiers! Here’s what we’re covering today,
Big Data Protocol draws $6B of TVL almost overnight
NBA Top Shot growing pains highlight centralization risk
Cover token dives after Yearn breakup
DODO DEX was hacked for $2.1M
and more :)
🙌 Together with:
Zerion, a simple interface to access and use decentralized finance
Balancer, an asset manager and decentralized exchange built on Ethereum
Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi
Casper, an enterprise-focused blockchain which aims to introduce unprecedented security, speed and scale for businesses
TLDR Big Data Protocol wasn’t even live a week ago. Now it sits third in terms of total value locked, ahead of DeFi mainstays Compound Finance and Uniswap, according to data compiled by DeBank.
$6B TVL With over $6B locked up since rewards emissions began on Saturday, the project has DeFi watchers wondering how it rocketed from nowhere to unseat major DeFi players in the fight to attract liquidity.
1,000% YIELDS The basic reason for the meteoric jump in TVL was the 1,000% plus APYs on 11 of the 12 tokens available to stakers on the first day of the six-day liquidity mining program. The yield’s source is Big Data Protocol’s token, BDP. 30% of BDP’s total supply will be distributed equally to the 12 asset pools during its six-day rewards program.
COOLING OFF The rewards have cooled by the time of writing as more participants have joined, with many of 12 tokens in the program, like WBTC, USDT, and WETH now reporting yields below the triple-digits. Alongside rewards, the price of the BDP token has halved to $3.14 from its launch price of $6.5 as stakers are immediately selling their rewards upon receiving them.
JUSTIN TRON & SBF The wealth of the 705 staking participants is concentrated at the top with over 56% of the protocol’s TVL attributed to two wallets and over 90% concentrated among the top 50 at the time of writing. According to Igor Igamberdiev, Research Analyst at The Block, the top wallet, with over $1.6B staked, belongs to Tron founder Justin Son, and the second wallet, with $769M belongs to cryptocurrency trading firm, Alameda Research, led by Sam Bankman Fried.
SELLING BDP Notably, three of the top five wallets in terms of locked value in Big Data Protocol hold less than $1 of BDP, meaning that the wallets’ controller either moved the tokens elsewhere or sold them.
Julian Koh of Ribbon Finance thinks it’s the latter, telling The Defiant, “the top whales are farming with billions of dollars and dumping immediately and the people who put money in the incentivized LP pool get rekt.”
EXIT LIQUIDITY The incentivized LP (liquidity provider) is the second pool in Big Data Protocol’s liquidity mining program which rewards users with a second token, bALPHA, for providing liquidity on BDP/ETH or bALPHA/ETH pairs. These users are exposing themselves to impermanent loss at the hands of stakers in the first set of pools. “They’re essentially providing exit liquidity for whales,” Koh commented.
bALPHA The bALPHA token, according to the protocol’s launch post, will be used to access what the project calls “commercially valuable” data. The token’s value has dropped by 80% to $5,109 from its opening price of $25,188.
Big Data Protocol’s launch post states that it has access to “14,141 professional data providers” which it will connect to its data consumers, by way of Amass Insights, which it describes as “the industry’s largest alternative data marketplace.”
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TLDR With over $230M in gross sales since launch and affiliation with one of the most lucrative sports franchises in the world, there’s one important question NBA Top Shot fans should be asking themselves: Do they actually own their NBA Top Shot?
WITHDRAWAL DELAYS Top Shot users are experiencing several days of delays in the withdrawal of funds from the dapp, which is struggling to keep up with its massive growth. At least one user has been banned from the application after repeated attempts to withdraw his funds, because he triggered “suspicious activity.” While the experience may sound familiar to users of popular fintech or Web2 companies, it’s a far cry from the self-custody and permissionless experience that DeFi enthusiasts have come to expect.
Last week, a Top Shot buyer and Cover Protocol advisor who goes by the online name of “DeFi Ted” documented his struggles trying to withdraw $40k from the Top Shot dapp.
“I was actually banned from Dapper and Topshot,” Ted told The Defiant. “Banned at Dapper meant no access to my account at all. So that was locked. NBA Top Shot account was also locked at login.”
NO CONTROL Withdrawal times highlight a larger issue with NFTs on Flow, the blockchain underlying Dapper Labs: Centralization. Unlike on many Ethereum DeFi dapps, Top Shot users aren’t in control of their funds.
On NBA Top Shot, asset withdrawals are centrally managed by the dapp and there are no alternative marketplaces for those NFTs on the Flow blockchain. This means that when NBA Top Shot shuts their market down for maintenance, it effectively puts a halt on all NBA Top Shot trading.
DAPPER LABS In order to participate in the NBA Top Shot ecosystem, users need a Dapper account which includes a Dapper-hosted wallet to hold their NFTs. Without a Dapper account, users can’t access the NBA Top Shot market or view their own Top Shots. According to the “Term and Termination” section of Dapper’s terms of service:
“At any time and in its sole discretion, without prior notice, and without any liability to you, Dapper may (i) cancel or deactivate User’s Account; or (ii) temporarily or permanently, suspend, restrict, or terminate access to any or all of Services for any reason or for no reason. Dapper is under no obligations to disclose its reason for any termination or suspension of the Service for User or generally. Dapper shall not be liable for any losses suffered by User resulting from any suspension or termination of the Services. You agree that your NFTs will be impossible to access during a suspension of Services.”
Dapper clarifies that in the case of an account termination, they will attempt to return all of a user’s NFTs and currency to an external wallet, but if they cannot do so “after reasonable efforts,” the NFTs will be forfeited to a governmental agency.
BANNED USERS To be sure, Ted’s experience does not seem to be a common one. There are no other verifiable accounts of Dapper banning legitimate users. But regardless of how infrequently Dapper may choose to ban users, the fact remains that they have the power to do that.
TLDR Yearn Finance and Cover are splitting ways after announcing a merger back in November. The reasons behind the break-up haven’t been disclosed, but Yearn’s creator, Andre Cronje, has made one thing clear: it’s not amicable, and Cover’s token is paying the consequences.
TIMELINE NOT AFFECTED Cover tweeted it has “parted ways with Yearn,” but that users can “still buy Yearn coverage on Cover protocol,” and that the project’s “products' roadmap and timeline are not affected.”
COVER TOKEN DROPS Yearn’s token price was largely unaffected, but COVER tanked immediately. As shown in the following CoinGecko chart, after Yearn’s announcement followed by Cronje’s tweet roughly 20 minutes later, Cover dropped to $562 from $824—a 32% decrease within the course of a few hours.
TLDR DODO, a crypto exchange with contracts on both Binance’s Smart Chain and Ethereum, has suffered a $2.1M hack. The hacker attacked DODO’s Crowdpools, which the project launched in February as part of their version 2 (V2). DODO said it is working closely with its security partner and experts to recover the funds and will “provide more information as soon as it becomes available.”
FAKE TOKENS Luciano Orlando, founder of DeFi LATAM, told The Defiant that while he might be “missing some of the tech specs of the exploit… the core point is that the initialization function for those pools shouldn’t have been publicly accessible.” This allowed the hacker to mint fake ERC-20 tokens for their DODO pool, reinitialize the WCRES/USDT pool and deposit the fake tokens inside, then remove the liquidity, according to Orlando.
“Decentralized finance transaction combination tool Furucombo will compensate the victims of a recent “evil contract” exploit that cost the protocol $15 million in stolen funds,” Cointelegrpah reported. “Following an internal call with affected users last week, Furucombo released a compensation plan Tuesday, announcing that they will issue 5 million iouCOMBO tokens to the victims of the breach. Issued in the form of ERC-20 tokens, iouCOMBO tokens will represent the rights to claim Furucombo’s COMBO tokens in the recovery pool.”
“From Jan. 18-28, 2021, Xangle surveyed 379 accredited investors to better understand their outlook on crypto investing,” the crypto disclosure and transparency platform said in a press release. “72% are very likely to invest in DeFi. Not only are accredited investors capitalizing on Bitcoin and other cryptocurrencies, but they want to expand their portfolio to include DeFi products, too.”
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