👉 What Happened on Crypto Twitter at the End of February

⚔️Epic DeFi Arbitrage Season, 👾IOTA out, and more!

Mar 4, 2020

Hey everyone, it’s Colin again! Welcome back to Crypto Twitter TLDR, a newsletter that brings you the juiciest tweets from Crypto Twitter twice a month.

Here’s what happened on Crypto Twitter at the end of February.

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⚔️🛡️DeFi systems get battle-tested by savvy arbitrageurs

Arbitrage was the talk of Crypto Twitter in February, as carefully executed flash loans and trades across DeFi protocols like bZx’s Fulcrum resulted in huge trading profits for market manipulators. While there was initially panic that this may have been the result of a hack, many ecosystem members came to see the events as both a critical learning experience for the nascent DeFi ecosystem as well as a demonstration of the current state of interoperable protocol capabilities.

Linda Xie @ljxie

The bZx attack was wild! Seriously never a dull day in crypto bzx.network/blog/postmorte… Best detailed analysis here medium.com/@peckshield/bz…

Julien Bouteloup | ETHCC Paris @bneiluj

~353k net profit using 'Sophisticated' arb on Fulcrum @bzxHQ 1.he took $2.7M Flash loan.@dydxprotocol 10kETH 2.put 5.5k ETH @compoundfinance, borrowed 112 WBTC 3.short WBTC on bzx #sETHwBTC5x 4.dumped 112 wBTC on #KyberUniswap to trigger short(oasis?) 5.Paid back loan 6.profit

bZx @bzxHQ

1/ Due to the complexity of the transaction, providing a comprehensive accounting of the losses will require additional time. This was not a simple Uniswap attack, and we do not use Uniswap as an oracle.

Haseeb Qureshi @hosseeb

So bZx just got flash attacked *again*, just after they announced the postmortem on the previous one. Unlike that attack, this one was pure oracle manipulation—didn't even require a logic bug. Details are still hazy, but there are three interesting takeaways for me (THREAD)

bZx @bzxHQ

We have released our official report detailing the nature of the attack, our response, and how we will move forward. We hope this will shed some much needed light on the incident. https://t.co/JNLoTqX8RA

Andrew Kang @Rewkang

The bZx attacker used a combination of features from: - @TornadoCash - @compoundfinance - @UniswapExchange - @KyberNetwork - @dydxprotocol - @synthetix_io - @bzxHQ Shitty situation for bZx, but also impressive demonstration of composability and understanding of DeFi

Jordan LG 👻 @JordanLzG

Behind the scenes of a @MakerDAO collateral swap using @AaveAave Flash Loans, @UniswapExchange and @chainlink oracles 📸 @daveytea @RyanSAdams @econoar @nanexcool @EthereumMemes $LEND $LINK $ETH #Woahx

Lucas @0x_Lucas

Haseeb Qureshi @hosseeb

It's still early. There are going to be lots of attacks, things will blow up, way worse than what happened to bZx. Failure is a necessary step in learning. But at least all of this learning is happening out in the open, with other builders able to benefit from it. FIN

Ryan Sean Adams - rsa.eth @RyanSAdams

Nexus Mutual is paying out $87k of claims to those who purchased insurance on bZx! It works! Proof that we have insurance for smart-contracts DeFi is growing up 🔥🔥🔥

$RIC 🐚 @ricburton

There is not a regulator in the world that would have approved the creation of #FlashLoans That is what makes Ethereum so interesting

👾👾IOTA remains down

Internet-of-Things focused token project IOTA has been shut down since early February. @ercwl had an informative-yet-devastating thread about the state of affairs for the IOTA project and went into detail on all the mess pertaining to the Founders’ attempt to claim ICO funds, the client hack, and what’s likely to happen to token holders going forward.

Eric Wall IS RIGHT @ercwl

So everyone knows that IOTA has been turned off for >12 days now, but do you also know that: - the main client (Trinity) was actually a Trojan because of a compromised third-party dependency? - all private keys that used this client are potentially stolen?

Eric Wall IS RIGHT @ercwl

8 500 000 000 000 iotas (~$2 million) were successfully stolen before the IOTA Foundation could pull the plug on the Coordinator. They have no idea how many private key seeds have been stolen yet; there's a big chance more theft is waiting when it reboots.

blog.iota.orgTrinity Attack Incident Part 2: Trinity Seed Migration PlanSummary: Trinity is a software wallet for the IOTA digital asset that has been developed for desktop and mobile operating systems. Managed…

Eric Wall IS RIGHT @ercwl

This whole clusterfuck seems to have been overlooked because people are still processing the fact that IOTA shut down for >12 days, and that the founders are publicly fighting over tens of millions of dollars of the unclaimed funds they stole from the ICO:

Come-from-Beyond @c___f___b

I notify the #IOTA community that I no longer work with David Sønstebø and am contacting my lawyers to get my 25 Ti from him. He refuses to transfer the iotas to make me act for his own benefit and against mine.

Eric Wall IS RIGHT @ercwl

All I can say is that IOTA has now successfully become tangled up in so many outrageous messes simultaneously that it is apparently no longer possible for the public to follow along with each different part of this multiplexed train wreck. Each disaster distracts from the other.

🤔🆒Other Developments / Quick Updates

Shocking $3M+ BCH miner sweep that went fairly under-the-radar:

Jameson Lopp @lopp

An unknown miner has swept up nearly 9,000 BCH that were mistakenly sent to SegWit addresses (which are only redeemable on Bitcoin.) Over $3M as of today. H/T @khannib @Coinometrics coinmetrics.substack.com/p/coin-metrics…

Heated monetary policy discussion between BTC and ETH supporters:

Michael Flaxman @mflaxman

I had a conversation with a well-known ETH supporter today and was shocked that he didn’t know the difference between a currency’s current issuance rate and the credibility of its future monetary policy. /1

antiprosynthesis.eth @antiprosynth

This may surprise some people, but $ETH's monetary policy is in fact more credible than $BTC's monetary policy. Find out why in this excellent thread:

Josh Stark @0xstark

@mflaxman 0. In short, both bitcoin and ethereum’s monetary policy is “minimum necessary issuance” - it’s just that Bitcoin hasn’t admitted that yet

CZ & Binance launch Binance Cloud, a whitelabel exchange solution:

CZ Binance 🔶🔶🔶 @cz_binance

Do you want to run a crypto exchange? Let us take care of the boring stuff (tech, product, liquidity) for you.

Binance @binance

#Binance Announces B2B2C Cloud Solution for Launching Digital Asset Trading Platforms An exchange-specific cloud solution, Binance Cloud provides partners & customers with a means to easily set up a digital asset trading platform in their local markets. https://t.co/ThQyrwePlh

👏👏👏Random / Funny / Interesting Stuff

Ending this one as we always do with an assortment of random tweets from around CT. Hit me with feedback on this week’s letter (@goltra) and see you next time!