Ethereum vulnerable to frontrunners: Researcher

Bots abound.

Ethereum may be vulnerable to frontrunners according to Dan Robinson, a research partner with the crypto-asset investment firm Paradigm. 

Robinson said in a blog post, the design of Ethereum’s mempool, or a set of unconfirmed transactions, is where the vulnerability lies. He said arbitrage bots monitor pending transactions in the Ethereum mempool and attempt to exploit profitable opportunities created by them.

Arbitrage bots typically look for specific types of transactions in the mempool (such a DEX trade or an oracle update) and try to front-run them according to a predetermined algorithm. Frontrunners look for any transaction that they could profitably forward trade by copying it and replacing addresses with their own. They can even execute the transaction and copy profitable internal transactions generated by its execution trace.

The rescue plan

Robinson explained that he devised a plan to extract the money in cooperation with a team of smart contract engineers and another team of Ethereum security engineers. The plan was to confuse the transaction so that the bots could not detect that there was a connection to the Uniswap spouse.

But despite the efforts made, the plan did not succeed, and the money was seized by the frontrunners.

He concluded his post by stating the lessons he learned from the experience and also warning miners of a similar fate if they do not pay close attention.

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Crypto Long & Short: What Changes at the Fed and the SEC Mean for Crypto

Chairman Powell’s speech on Thursday highlighted how much the Fed’s role is changing, and that's an opportunity for the crypto industry.

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Bitrue, OKEx to offer both DeFi and CeFi options

Hybrid offerings to suit different needs.

Two exchanges will offer both decentralized and centralized financial options.

Both Bitrue and OKEx separately announced plans to provide hybrid services that cater both to the DeFi market and more mainstream centralized finance products.

OKEx CEO Jay Hao tweeted on August 30 that the exchange launched its hybrid lending aggregator. The DeFi and CeFi aggregator integrates Compound (COMP). Hao said OKEx is “here to redefine crypto lending experience.”

The OKEx DeFi Lending Marketplace gathers major DeFi lending products and allows users to check and compare all DeFi and CeFi lending rates. The exchange will also come out with a One-Stop DeFi Trading Shop promising a one-stop DeFi experience and eliminates the need to transfer funds between wallets.

Bitrue, on the other hand, plans to launch its own hybrid service in the first quarter of 2021, the exchange said in a statement.  Its DeFi offering will be backed by a new token called the Bitrue Finance Token or BFT. Bitrue said it will start out by enabling lenders to add coins to the liquidity pool with the lenders receiving interest. BFT will be listed in mid-September.

“By providing both CeFi and DeFi products at the same time, we will be able to satisfy the needs of different types of users. Regardless of your preferred time horizon, the yield you want to receive, how long you're prepared to lock up your coins for, and how much you want to invest, there will be an opportunity for you to invest in a way that you're most comfortable with.”

Bitrue added it would be “implementing upgrades to their existing loan service, starting with a move to make publicly viewable the wallets that contain collateralized funds.”

Interest in DeFi remains high, especially as DeFi reached a milestone recently, hitting $9 billion in locked-in value. OKEx also listed eight new DeFi tokens and said it’s been encouraging to see many excellent DeFi projects coming up.

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Synthetix (SNX) surpasses $1B TVL as DeFi investor interest grows

DeFi platform Synthetix (SNX) surpassed $1 billion in total value locked but what’s fueling the protocol’s growth?

Synthetix has reached the $1 billion in value locked milestone, following other DeFi protocols like Compound and Aave. Synthetix (SNX) has been one of the many DeFi tokens that has made substantial gains in 2020, having hit its all-time high of $7.32 on August 15 and rallied more than 400% year-to-date.

SNX/USDT daily chart. Source: TradingView

Most of the hype around the 2020 altcoin season has been focused around lending, liquidity, and yield farming within crypto. However, Synthetix has been able to make strides in the DeFi sector by offering crypto investors an inlet to the world of traditional finance. Synthetix is also the fourth biggest DeFi protocol by total value locked according to data from DappRadar.

What makes Synthetix tick?

Synthetix is a decentralized exchange (DEX) built on the Ethereum blockchain through a series of smart contracts. However, Synthetix does not offer trading between crypto assets (typically ERC-20 tokens) like tokens and stablecoins, but rather between synthetic assets or “Synths.”

Synths are tokenized representations of other assets. They track the price of other tokens that are traditional assets investors know well.  Commodities and stocks can be traded directly on the Synthetix exchange. Examples include fiat currencies (sUSD,sEUR), cryptocurrencies (sETH, sBTC) and commodities like gold (sXAU).

Another unique feature of Synthetix is the ability to create and trade Synth tokens that track the price of assets inversely (iUSD, iETH, iXAU, etc). This makes Synths one of the only ways to short an asset in a purely decentralized manner.

With DeFi, it takes money to make money

These Synth tokens are created by using another asset as collateral. However, instead of using the underlying asset (like USDT or wBTC) or relying on an established asset like Ether (MakerDAO’s DAI), the protocol’s native SNX token is used.

This means that in order to create new Synths, users must stake SNX tokens at a 750% collateralization ratio through the platform’s Mintr smart contract.

While locking up $750 to access $100 of sUSD may seem counter-productive, users can also acquire Synths through another decentralized exchange or by borrowing it. Those staking SNX are incentivized to do so through the staking rewards which come from new tokens issued in the protocol’s inflationary monetary policy.

Not only do users receive staking rewards, SNX stakers receive Synth exchange rewards generated by the exchange’s fees. As such, members of the community are incentivised to provide liquidity to Synths and to lock their SNX tokens.

This creates scarcity and may be a major factor in the rapidly growing market cap as well as the growing value locked figure.

DeFi connects investors to crypto and traditional assets

While the Decentralized Finance sector has taken crypto by storm in 2020, there are a few key projects that are taking the lead and pushing the space forward.

Notably, lending and credit platforms along with yield farming have been in the spotlight, especially following the release of the Compound protocol and token.

However, this new subset of DeFi is becoming more popular with projects like UniSwap and its upcoming fork, SushiSwap, which allow for decentralized trading of ERC-20 tokens and rewards liquidity providers. There’s also dYdX, a fully decentralized platform which allows users to trade assets with margin.

As DeFi continues to make its parth to mainstream appeal, the need for solid infrastructure and interoperability between protocols and traditional finance becomes paramount. The growing allure of DeFi is not just in the interest to be earned from staking assets but also from the sector’s potential to provide investors with decentralized access to crypto and legacy assets.

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Lopp warns people not to take opinions on social media too literally

Bitcoin believers can be curious about altcoins.

Jameson Lopp, co-founder and CTO of Casa, considers himself a Bitcoin Monetary Maximalist and a curious being towards altcoins, so in a post on August 30, he warned the public not to take online interactions on cryptos too literally.

Although Lopp sees no other options on the market that can compete with Bitcoin's sound and secure money proposition, he also believes that other cryptocurrencies can bring values that Bitcoin can’t bring, such as digitizing assets and non-financial functionality.

In fact, Lopp has been advising a blockchain project built on Ethereum. He sees the project’s potential, bringing cryptocurrency and security token opportunities to institutional and retail investors. However, he also warns there is no guarantee in the company to become profitable. He stressed that:

“While INX token holders are guaranteed to receive a portion of cumulative net positive cash flow (also known as "profit") there is of course no guarantee that INX Limited will become profitable. People on social media tend to generate controversy in order to gain clout. Anyone considering investment should do their own research!”

The same thing goes for Lopp’s other comments on other blockchain projects or cryptocurrency other than Bitcoin. He stated that whatever he put out there in social media is not for any investment recommendation. Lopp, and other Bitcoin maximalists, were accused of shilling INX. INX has been cleared by the U.S. Securities and Exchange Commission.

Lopp pointed out that he believes Bitcoin is the best monetary asset in the world; however, he is still open to using other cryptocurrency platforms when the need or desire arises. He suggested giving a new “label” to people who hold such beliefs as “Bitcoin Pragmatist,” in the hope that there will be less criticism from the public of taking what he says too literally.

“It doesn't matter what kind of Bitcoiner you are. You can be a maximalist, a pragmatist, a toximalist, a shitcoiner, or a multi coiner. I'm no stranger to criticism, attacks, and even threats on social media. I have no interest in engaging in self censorship simply to meet purity tests of specific subsets of my followers. I suggest taking online interactions you see with a grain of salt.”

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Top 5 Cryptocurrencies to Watch This Week: BTC, ATOM, LEND, XEM, YFI

Bitcoin is likely to consolidate for a few days but during this time select altcoins are likely to extend their up-move.

Ripple Labs CEO Brad Garlinghouse believes that the U.S. Federal Reserve’s recent decision to allow inflation to stay above its 2% target objective could debase the dollar further. According to Garlinghouse, this decision is likely to lead “to further diversification of assets which will certainly be good for crypto.”

The various stimulus and fiscal measures announced around the world to counter the coronavirus pandemic led economic slowdown are bullish for Bitcoin (BTC). However, Bitcoin’s major bull market cycles show that each successive cycle has been longer than the previous one.

Hence, if history were to repeat itself, Bitcoin could consolidate for another 3-12 months before making a decisive move.

Crypto market data daily view. Source: Coin360

During this period, when Bitcoin remains range-bound, several other altcoins are likely to rally in rotation.

For the past few months, the market action has been in the DeFi tokens, which have been in a bull run of their own.

So, while Bitcoin consolidates, let’s look at some of the altcoins that could provide an opportunity in the short-term.

BTC/USD

The average directional index (ADX), a component of the directional movement indicator, has dipped below 24 and the 20-day exponential moving average ($11,534) has flattened out, which suggests that the trend in Bitcoin has weakened considerably.

BTC/USD daily chart. Source: TradingView

Currently, the price is largely stuck between the $12,000 and $11,000 levels, which has brought the positive directional indicator (+DI) and the negative directional indicator (-DI) closer to each other.

After the bears failed to sink the price below the $11,000 support on Aug. 25 and 27, the bulls will now try to push the price above the $12,000–$12,460 resistance zone. If they succeed, the next leg of the up-move is likely to begin.

However, if the price turns down from the overhead resistance zone, the BTC/USD pair is likely to spend some more time inside the range.

BTC/USD 4-hour chart. Source: TradingView

The -DI and the +DI are closer to each other and the ADX is below 18, which suggests a balance between supply and demand.

However, a minor positive is that the buyers are aggressively defending the $11,000–$11,200 support zone. They will now try to push the pair to $12,000 level.

Unless the pair picks up momentum, the possibility of a breakout in the short-term looks weak, hence, the range-bound action is likely to extend for a few more days.

ATOM/USD

The bears aggressively defended the $8.50 level on Cosmos (ATOM), which attracted profit booking by the short-term traders that dragged the price down to the breakout level of $7.249.

ATOM/USD daily chart. Source: TradingView

If the ATOM/USD pair rebounds off the breakout level, then it is likely to act as a strong floor during further declines.

The ADX remains strong above 35 and the +DI is above the -DI, which suggests that the bulls have the upper hand. On a break above $8, a retest of the recent highs at $8.877 is likely.

If the bulls can push the price above this level, the uptrend could resume with the next target objective at $10.471.

Contrary to this assumption, if the pair turns down from $8, the bears will again try to sink and sustain the price below $7.249. If they succeed, a drop to the 20-day EMA ($6.69) is possible.

ATOM/USD 4-hour chart. Source: TradingView

Although the bears pulled the pair below $7.249, they could not sustain the price below it, which shows that the bulls are buying at lower levels.

If the bulls can push the price above the $7.844 resistance, a retest of $8.877 is possible. Above this level, the uptrend is likely to resume.

This bullish view will be invalidated if the pair turns down and sustains below $7.249. Such a move will suggest that the correction could deepen to $6.604 and then to $5.50.

LEND/USD

The ADX is trading above 55 and the +DI is above the -DI, which suggests that Aave (LEND) is in a strong uptrend, with the bulls firmly in command.

LEND/USD daily chart. Source: TradingView

Currently, the LEND/USD pair has pulled back after reaching a high of $0.89985 on Aug. 26. However, the positive thing is that the bulls have not allowed the price to dip below $0.70426, which is the 50% Fibonacci retracement level of the most recent leg of the rally.

History suggests that since July, the pair has not spent a long time in consolidation (marked via ellipses on the chart). Hence, the bulls are likely to again make an attempt to resume the uptrend by pushing the price above $0.89985.

If they succeed, a rally to $1 and above it to $1.10918 is likely. However, if the price turns down from $0.89985, the pair could enter a consolidation.

LEND/USD 4-hour chart. Source: TradingView

The 4-hour chart shows that ADX has dipped below 23 and the 20-EMA is flattish, which suggests a balance between supply and demand. The pair has formed a symmetrical triangle, which usually acts as a continuation pattern.

If the bulls can push the price above the triangle, a retest of $0.89985 is likely. A breakout of this resistance is likely to resume the uptrend.

Contrary to this assumption, if the bears sink the price below the triangle, a drop to $0.65 is possible. If this support also cracks, it will suggest that the pair has topped out at $0.89985.

in the short-term.

XEM/USD

NEM (XEM) broke out of the $0.1295715 overhead resistance on Aug. 29, which is a huge bullish sign. However, the sharp up move of the past few days has led to profit booking by the short-term traders today.

XEM/USD daily chart. Source: TradingView

The bulls are likely to defend the $0.1215678–$0.1129611 support zone, which are the 50% and 61.8% Fibonacci retracement levels of the most recent leg of the rally. If the XEM/USD pair rebounds off this zone, the bulls will again attempt to resume the uptrend.

The ADX is strong above 63 and the +DI is well above the -DI suggesting that bulls have the upper hand. If they can scale the price above $0.158037, the up-move can extend to $0.18 and then $0.20.

Conversely, if the bears sink the price below $0.1129611, a drop to the 20-day EMA ($0.091) is possible. A bounce off this level will be a positive sign as it will suggest that the bulls are buying on dips to this support.

The bullish view will be invalidated if the bears sink and sustain the price below the 20-day EMA. Such a move will suggest that the current breakout was a fake one.

XEM/USD 4-hour chart. Source: TradingView

The ADX on the 4-hour chart is above 48 and the +DI is above the -DI, which suggests that the advantage is with the bulls.

Currently, profit booking has dragged the price to the breakout level of $0.1295715. If the pair rebounds off this level, it will be a huge positive as it will suggest that the bulls have defended the breakout level, which will increase the possibility that the uptrend will resume.

However, if this level cracks, the next support is at the 20-EMA. If the pair bounces off this support, the bulls will again attempt to resume the uptrend.

YFI/USD

Yearn.finance YFI has been on a stellar run. It has risen from a low of $3,000 on Aug. 13 to a high of $38,855.31 today, which is a 1,195% rally within a short span of time. Usually, such vertical rallies are not sustainable.

YFI/USD daily chart. Source: TradingView

Today, the YFI/USD pair witnessed profit booking close to the 200% Fibonacci extension level of $38,451.95 and has given back the intraday gains.

If the price closes near the lows of the day, it will form a bearish shooting star candlestick pattern. Usually, if this pattern is followed by a large bearish candlestick on the next day, it could indicate that a short-term top is in place.

However, the bulls are unlikely to give up without a fight. They will try to provide support between $26,436.24 and $23,505.34, which are 50% and 61.8% Fibonacci retracement levels of the most recent leg of the rally.

If the price rebounds off this zone, the bulls will once again attempt to push the price above $38,855.31 and resume the uptrend. If they succeed, the next target will be the 261.8% Fibonacci extension level of $46,899.39.

YFI/USD 4-hour chart. Source: TradingView

The ADX is above 54 and the +DI is above the -DI, which suggests that the trend remains strong and in favor of the bulls.

Currently, the pair is attempting to rebound off the 50% Fibonacci retracement level of $26,436.24. If the bulls can push the price above $32,500, a retest of $38,955.31 is likely.

On the other hand, if the bears sink the price below $26,436.24, a drop to the 20-EMA is possible. A break below this support could sink the price to $19,332.53 and below that to $14,017.17.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Cloudflare goes down; crypto websites hit

This time it’s not your Wifi that’s the issue.

Cloudlfare, an internet service provider responsible for various functions, went down Sunday morning, taking down many websites, including some crypto sites.

The company confirmed in a tweet it experienced issues around 9:24 am Eastern time caused by a third-party transit provider. Network stability returned around 11 am though Cloudflare said it is still monitoring for other potential problems.

A large majority of the internet uses Cloudflare. News reports noted several popular websites went down following Cloudflare’s network issues, including streaming site Hulu and cooperative gaming services PlayStation Network and Xbox Live.

Crypto websites were not immune. Bitfinex Chief Technology Officer Paolo Ardoino tweeted that the Cloudflare outage caused any connection issues to Bitfinex Sunday morning.

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