This Week in DeFi: 14th September

Decentralized Finance or DeFi, as it is popularly stylized, is an innovative force to be reckoned with in the finance space. Based on the blockchain network, the defining attribute of DeFi is its lack of reliance on any central authority or intermediary for finance decisions. DeFi is an umbrella term for all those financial services and applications on the public blockchain, usually Ethereum. It is a fast-growing industry, with new updates every week. This week’s edition of This Week in DeFi will walk through some of these additions and what makes them so exciting.

September 7- $400 Billion in Losses Faced By Cryptocurrency Market

On Tuesday, September 7, the cryptocurrency market was hit with a staggering drop in the prices of nearly every single coin. The loss has been calculated to be a jaw-dropping $400 billion. Moreover, this happened on Bitcoin Day, the name given to the first day El Salvador accepted Bitcoin as a legal tender. Bitcoin, in particular, faced a 15% dip in price to $43,000, the lowest in nearly three weeks. The price then quickly rose to $46,810 within an hour, but the damage has been done. Other major cryptocurrencies like Ether, Binance Coin, and Cardano’s Ada all dipped between 13% and 18% as well. Amidst this, El Salvador took advantage of the situation, with the President Nayib Bukele announcing the country’s buying of an additional 150 Bitcoins.

September 8- Lido Announces Launch of SOL Staking

Liquid staking solution Lido has recently announced its launch on Solana, one of the fastest blockchains in the world. This proposal is the latest addition to the already emerging market of DeFi supported by Solana. Liquid staking is based on Lido’s stSOL token. This token allows users to earn staking rewards on immediate deposit, with no need to keep track of difficult infrastructure. stSOL also allows unstaking at any time, and can also be integrated into other DeFi platforms on the Solana blockchain.

September 8- Cream Finance Hacker Returns $17.6M in Stolen Funds.

Lending protocol Cream Finance was hacked on August 30, 2021, leading to a loss of 2,804.96 ETH and 462,079,976 AMPM tokens, a combined value of $34 million at the time. The hacker exploited a reentrancy bug of the protocol, which allowed multiple high-value flash loans. On Wednesday, September 8, Cream Finance announced that it has received 5,152.6 ETH, amounting to a value of $17.6 million from the hacker’s address. The reason for this sudden change of heart is not yet known.

September 9- Cryptocurrency Regulation in India: Governor of Reserve Bank of India Expresses His Concerns

On September 9, RBI Governor Shaktikanta Das said, “We have serious, major concerns on cryptocurrency with respect to financial stability, have conveyed the same to [the] government of India.” This comment comes as a result of the long-spun discussion of the government regarding the regulation of cryptocurrencies in India. The government is yet to make any concrete decision thus far, citing price volatility and abstract coin-mining process as factors of financial instability. Ironically, the government of India plans to launch its digital version of the rupee that is legally recognized. This will be exchangeable on a 1:1 ratio with the Indian Rupee, serving as a regulated digital reflection of India’s current monetary system.

September 10 Ukraine Parliament Legalizes Cryptocurrency

Ukraine becomes the fifth country in the world to legalize and regulate cryptocurrency in some legal form after the country’s parliament passes it in a nearly unanimous vote. Before this, local Ukrainians were allowed to buy and exchange digital currencies, but the platforms and companies enabling this were kept under careful watch. This law, however, outlines protections against fraud for cryptocurrency owners. This bill is yet to be signed by President Volodymyr Zelenskyy, but the sheer fact that terms like digital wallets and virtual assets will be a part of legal documents is a milestone in itself.

September 12- Cardano Alonzo Hard Forks

Cardano, the third-largest cryptocurrency known by its virtual currency ADA, underwent a hard fork on September 12. Cardano has achieved an estimated market cap of around $80 billion since its inception in 2015, and with this new update, it hopes to grow even bigger. The Alonzo hard fork is a software upgrade that will enable developers to finally be able to build and deploy smart contracts on the Cardano blockchain. This functionality will not only encourage the creation of dapps but also allow users to create fungible and non-fungible tokens. This is a game-changer for Cardano and will be a driving force in raising its popularity.