Weekly Alpha Leak🚰: Looters Steal $200M in Stables and Wrapped Assets from Nomad Bridge

Week of July 30 - August 5: ETH Merge and Potential Fork Continues Splitting Opinions

This week highlighted how scammy and uncertain the crypto space can be! We saw not only a major $190M bridge hack but also a wallet exploit that led to a looting fest for on-chain degens

Crypto often feels like the wild west

What will it be next? 🤯

⛓ Crypto News Highlights of the Week ⛓

✅ This Week’s Headlines:

Bullish Momentum From Last Week Waned
Justin Sun Supports Creating PoW ETH Fork
Is Crypto Being Exploited to Death?
Still Tallying Casualties from Luna Crash

1️⃣ Bullish Momentum From Last Week Waned:

The Market found itself uneasy at the beginning of the week attributed to Beijing's warning to the U.S. House of Representatives Speaker Nancy Pelosi against visiting Taiwan – a self-ruled island claimed by China – during her tour of four Asian countries. She landed with the event ending up being a nothingburger

Bitcoin then spent the week ranging uncertainly between $22-$23k and ETH between $1500-$1700 with the crypto total market cap managing to sustain the $1T level. Unfortunately the bullish momentum from last week dissipated and we await for either bulls or bear to regain control

2️⃣ Justin Sun Supports Creating PoW ETH Fork:

The Ethereum Merge is just on the horizon with everyone left and right proffering their thesis on how to play it. What we know for certain is that the Sepolia testnet is set to undergo a post-merge execution layer upgrade at block 1735371, expected on August 17, 2022

Another narrative we see arising is a potential post-Merge forking. We are already seeing a key miner pushing a proof-of-work fork

Poloniex came out in support of the potential forking of ETH and said it would list two potential forked ETH tokens: ETHS & ETHW. Poloniex owner, Justin Tron, stated that he will donate some ETHW to build the ecosystem

On the other hand, Frax joined Tether as the first stablecoin issuers to support Ethereum 2.0 publicly, putting forth a proposal will see the project convert any Frax DAO-owned ether on Ethereum proof-of-work forks to ether on Ethereum 2.0
So basically this means that we may end up with PoW ETH and PoS ETH as distinct chains, with miners choosing to continue on with the PoW chain. Stay tuned as we follow these developments..

3️⃣ Is Crypto Being Exploited to Death:

Another prominent bridge hack! Nomad cross-chain crypto bridge was exploited for $190M worth of WBTC, WETH and USDC. Nomad is a token bridge that allows transfers of tokens between Avalanche, Ethereum, Evmos, Milkomeda C1, and Moonbeam. After the initial attack, hundreds of separate accounts swarmed in a free-for-all to loot funds - some whitehats who eventually returned the funds for a bounty. Nomad ended up offering up to a 10% bounty to return funds stolen from the recent hack on the Nomad bridge on Aug. 2. So far ~ $22M has been returned by whitehats

Chainalysis estimates that $2B has been stolen from cross-chain bridges across 13 separate hacks so far this year with attacks on cross-chain bridges accounting for 69% of the total funds stolen so far this year

Adding further fuel to the fire of security concerns, we saw a high profile wallet hack affect the Solana ecosystem where about 8000 internet-connected Solana hot wallets were compromised, including Phantom, Slope, Solflare, and TrustWallet. The most likely attack vector was determined to be that affected addresses were at one point created, imported, or used in Slope mobile wallet applications and that Slope allegedly stored private keys as plain text on a centralized server. Slope confirmed that a number of its wallets were compromised in the incident
NEAR Protocol also came out to notified users that SMS and email data used as recovery options in its core wallet offering were leaked to a third party in June and the issue was resolved before any harm was done

As if that wasn’t enough, Blockchain security firm Halborn warned users of the latest phishing emails for MetaMask. Also, North Korean cybercriminals have been targeting jobs listed on LinkedIn and Indeed to plagiarize resumes and other people’s profiles to land remote work at crypto firms. Plus there was news of a potential widespread malware attack on github going around

All of this highlights the fact that the crypto space is still very much like the wild west and it’s your responsibility to practice good security practices. Someone will always want to separate you from your funds

4️⃣ Still Tallying Casualties from Luna Crash:

VC firm Hashed confirmed losing more than $3B during the Luna crash but despite that, is still looking to step up investments in GameFi projects and plans to raise a third venture capital fund

Digital asset manager CoinShares reported losses in the second quarter and $21M in losses following the de-pegging and collapse of TerraUSD

💊 This Week’s Top Daily Bullets:

Aave DAO's proposal to create a stablecoin called GHO passed with 99.99% approval. GHO can be minted by users against a diversified set of crypto-assets

Meta has started to roll out NFTs across 100 countries after integrating with Coinbase Wallet and Dapper, adding support for Flow Blockchain

dYdX dropping all trading fees for up to $100k/month volume

Coinbase selected by BlackRock to provide Aladdin clients access to crypto trading and custody via Coinbase Prime. Coinbase stock pumped after the BlackRock announcement, resulting in trading being temporarily halted due to volatility. Interesting to recall that Cathie Wood's Ark Invest dumped $75M in Coinbase Stock last week
Binance Co-Founder Yi He to Lead Its $7.5B Venture Arm

Waves community backs plan to reimburse $500M of lost DeFi funds following the depegging of its stablecoin. Plans to reboot non-custodial lending protocol Vires.Finance

These are just our top six bullets, want more? Check out our daily newsletter:

**💩 Scammy Sh*t:**

The Macalinao brothers used a network of anon identities to create the illusion of a dev community, and artificially inflate the total value locked on the Saber protocol and Solana ecosystem. Their next play is the Aptos ecosystem

Decentralized wireless network Helium does not have partnerships with two well-known firms, Lime and Salesforce, whose logos it prominently featured on its website. Was a bit embarrassing

Coinbase exec at heart of SEC insider trading scandal pleads not guilty in federal court

📊 Crypto Market Data Highlights of the Week 📊

✍️ From our special guest contributor: Patrick Scott from Dynamo DeFi

The launch of Aave with OP incentives, catapulted the Optimism Layer 2 to over a billion dollars in Total Value Locked (TVL). Week-over-week Optimism TVL grew 88%.

User activity on Optimism also increased notably. Average daily transactions increased 33% this week.

The stellar performance of the Optimism ecosystem spilled over to other Ethereum Layer 2s, with Arbitrum and Metis both outperforming the market as well.

Algorand, the Layer 1 blockchain founded by MIT professor Silvio Micali, hit a new all-time high in TVL of $229M.

Tornado Cash revenue grew 36% week-over-week, perhaps related to the large number of recent exploits.

🏢 TradFi Highlights of the Week 🏢

✍️ From our special guest contributor: Romano - @RNR_0

This is just a TL;DR of Romano’s Market Insight, want more? Check out the full report.

The market was pessimistic before the FOMC meeting. June-like. The market was pricing in a worst-case scenario, so a 75bps raise would be "dovish" The recent rally is one of the "most hated rallies”

Bitcoin prices have risen more than 10% with stocks and commodities. It's impossible to predict the bear market rebound's peak or if risk assets and/or equity markets have bottomed

Bitcoin: The NASDAQ has recovered from its mid-June sell-off, while BTC is still down. NASDAQ has recovered from its mid-June sell-off, but BTC hasn't
Ethereum merge trade might affect Ethereum investments and initiatives. If demand for project tokens grows, so will their price. You should watch for changes that might boost demand for Ethereum-based tokens. You may like to watch: 1) Ethereum Classic 2) Ravencoin

The crypto space is a wild and fast paced, evolving landscape - however one filled with recurring themes and trends. The point of this newsletter is to highlight the story of crypto - as it's told over time. The board, the players, and the game itself. Follow along as we catalog and organize the chaos.

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