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📉 Liquidations Whack Synthetix
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Kyber DMM, an automated market maker which prioritizes permissionless liquidity contribution and high capital efficiency
User's of the Zapper-Matic/ Polygon bridge have been experiencing issues recently. In this tutorial we demonstrate how to revoke token approvals using Polygonscan.
TLDR In a sign of volatility in the blockchain-derivatives market, liquidations on the Synthetix platform skyrocketed to $19.4M, on June 11, a 30-fold jump from the next highest level on May 13, according to data from The Graph.
SO WHAT As worrisome as that spike might be, the liquidations were right in line with how the system is supposed to work, said Synthetix core contributor, Andrew Trudel.
“Someone did not properly manage their staked position and got partially liquidated back to their target range of 500% as a result,” he told The Defiant.
NATIVE ASSET Synthetix allows users to mint Synths, instruments that are blockchain-based derivative contracts. To mint Synths, users must stake SNX, the protocol’s native asset at a 500% ratio to the synthetic assets. If the value of the minter’s debt falls below the 200% then liquidators can pay down the debt with Synethix’s sUSD, US-dollar-based Synth, according to a post released last year. In exchange for the sUSD, liquidators will receive the liquidated user’s SNX.
TLDR Last weekend, Alchemix, which offers automatically repaying loans, shipped a vault that accepts ETH.
DEBT CAP Alchemix users will now be able to borrow alETH, Alchemix's token that's soft-pegged to ETH, using ETH as collateral. The collateralization ratio: 400%. The launch came with a debt cap of 2,000 alETH and it was reached within a day of launch, according to the project’s founder, Scoopy Trooples.
ETH Until now, Alchemix only accepted the DAI stablecoin as a deposit. But with the protocol accepting ETH, users can maintain a long position while retaining the self-paying loan feature that Alchemix pioneered.
RISK The new function enables users to borrow against ETH without risking liquidation. As alETH and ETH move in tandem, users can’t drop below the collateralization ratio and risk having their collateral seized.
TLDR Twenty days after upgrading its “Polygon Bridge” smart contract, Zapper found a vulnerability in its own deprecated version. According to a tweet, the Zapper project “exploited the vulnerability ourselves and all of the funds have been rescued.”
SO WHAT The problem would have affected those with an infinite approval for the bridge contract. Infinite approval is part of the ERC-20 token standard. Users can set custom approval levels for spending when interacting with dapps, but this step requires an extra click on “view full transaction details” when using Metamask.
EXPLORER Debank, a data provider, provides a way to manage approvals under the profile tab. Etherscan too, the block explorer, provides a page with which users can check token approvals.
“I’m going to make this as simple and straight forward an explanation as I can. Yield Farming via Staking and Liquidity Providing are a core feature of most, if not all Decentralized Finance (DeFi) projects. The principle behind why they are brilliant also applies to other crypto projects , but lets put that aside. But first let me say that this is not investment advice. This is how I see the market and there may be things that I am wrong about or could change by the time you read this. Feel free to add your thoughts in the comments below.”
“dYdX, the decentralized derivatives exchange, has secured $65 million in a Series C raise led by Paradigm. The San Francisco-based protocol development firm, which is focused on decentralized perpetual swaps, announced a $10 million Series B fundraise as recently as January of this year. Three Arrows Capital and DeFiance Capital led that round, with Wintermute, Hashed, GSR, SCP, Scalar Capital, Spartan Group, and RockTree Capital all participating.”
“Today we are extremely proud to announce the last participants from our recently completed funding round. In the first two parts, we’ve covered Evan Cheng from Facebook and Chainlink and Wayne Lin from Axia8 who both participated in this funding round, but furthermore, decided to join the PARSIQ team as advisors.”
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🧑💻 ✍️ Stories in this newsletter were written by Dan Kahan, Owen Fernau, and edited by Edward Robinson and Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access, while free signups get only part of the content. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button above ($15/mo, $150/yr).