No major euphoria-worthy moments happened this week — the ecosystem is still cooling off. I think the biggest sign of that is Uniswap’s trading volume. After hitting a peak of slightly less than $1 billion in daily volume in early September, those numbers steadily deflated. But despite the downtrend, I think even the current level is still well beyond the wildest imagination of a DeFi fan in 2019. For reference, those figures are roughly on par with Bitstamp or Bitfinex (even though as I write this, their volume seems to have skyrocketed with the PayPal news). This analysis of a …

The first governance vote for decentralized exchange Uniswap has ended in failure, despite the proposal attracting overwhelming support of 98% of votes cast. Despite this, it fell roughly 1% short of the 40 million vote threshold needed for approval by the close of voting. The poll ended earlier today, with almost 39.6 million UNI staked in favor, compared to roughly 700,000 opposed. DeFi blogger Danger ”Safetythird” Zhang described the vote as “the DeFi equivalent of winning the popular vote but losing the electoral college.” Ironically, the proposal sought to reduce the number of tokens needed to submit and pass proposals. …

A recent survey by cryptocurrency data aggregator, CryptoCompare, shows that centralized exchange operators do not see the emergence of decentralized trading venues like Uniswap as a threat despite growing volume and activity in the DeFi space. In its September exchange review, CryptoCompare asked 26 of the leading venues in the space how likely it was for DEX liquidity to overtake that of centralized exchanges in a 2-year time span. 70% of those interviewed said that decentralized exchanges will not overtake centralized exchange volume due to their lack of liquidity. Only 7.7% of the representatives found that it was a likely …

Bancor is updating its protocol once more to defeat the insidious issue of impermanent loss, which it earlier called “DeFi’s dirty little secret.” Impermanent loss, also called divergence loss, affects exchanges based on automated market makers like Bancor or Uniswap. It happens when the prices of two assets in a liquidity pool diverge significantly, with one side going strongly up or down in value. The effect translates to a loss of value compared to a benchmark “buy and hold” portfolio. Liquidity providers (LP) may take out less money than they would have had if they just held the tokens separately …

Solana, the smart contract platform that recently entered the spotlight thanks to FTX’s Serum, announced the upcoming release of what it says is a decentralized bridge for Ethereum ERC-20 tokens. Called Wormhole, the bridge would allow users to transfer value between the different blockchains, turning ERC-20 tokens into Solana’s corresponding SPL standard. The bridge is currently being audited by Kudelski, a major Swiss security firm. Anatoly Yakovenko, the CEO of Solana, told Cointelegraph that release is expected for the end of October. A beta of the bridge will be available to developers in a Oct. 28 hackathon, with a full …

DeFi failed to catch on eight years ago, according to comments from Yoni Assia, founder and CEO of financial platform eToro. "I think that DeFi is super interesting," Assia said on Oct. 6 during a panel on crypto exchanges and venture investments, as part of the LA Blockchain Summit. "We actually built a decentralized exchange back in 2012 based on the Colored Coin protocol we developed in eToro, which was tokenizing assets on top of the Bitcoin network, so this was really really premature — the beginning of thinking of tokenization." Ethereum has made a name for itself as one …

Blockchain analytics company Coinfirm recently unveiled a new anti-money laundering tool for the decentralized finance, or DeFi, niche of the crypto space — a sector facing regulatory crackdown on the horizon, according to Jakub Fijolek, Coinfirm's chief technology officer. "DeFi might soon have some regulatory issues," Fijolek told Cointelegraph in an interview. "The amount of funds that are flowing through DeFi is growing significantly." The DeFi niche of crypto has ballooned in 2020. In February, the total value locked in the sector reached $1 billion. Amid significant growth and interest, the niche went as high as $10 billion at one …

On August 28, Binance Futures launched its DeFi Composite Index, a basket of DeFi tokens that initially comprised 27% Chainlink (LINK) and 11% Aave (LEND) alongside nine other prominent DeFi tokens that made up between 6% and 9.5% of the index each. Updated weekly, the index now tracks 19 different crypto assets. However the Binance Futures’ DeFi index has dropped more than 50% from an all-time high of $1,189 on its first day of trading, with the basket now changing hands for just $507. Indexes tracking decentralized finance (DeFi) tokens have taken a beating over recent weeks following the popping …

As the fallout from the hack on its platform continues, KuCoin said it has identified suspects and have now officially involved law enforcement in the investigation. KuCoin CEO Johnny Lyu tweeted on Oct. 3 that the exchange now has substantial proof that identifies who hacked the service on Sept. 26. A quick update since my last livestream on Sep 30. After a thorough investigation, we have found the suspects of the 9.26 #KuCoin Security Incident with substantial proof at hand. Law enforcement officials and police are officially involved to take action. — lyu_johnny (@lyu_johnny) October 3, 2020 Lyu added that …

In the aftermath of criminal charges against BitMEX, the crypto community is debating whether the decentralized finance sector is also set to face the wrath of regulators. On Oct 1, the U.S. Commodity Futures Trading Commission announced charges against three BitMEX executives for violating the Bank Secrecy Act (BSA) due to the exchange’s allegedly weak anti-money laundering and know-your-customer (KYC) policies. DeFi protocols, including Decentralized Exchanges (DEXs) have made a virtue of having minimal AML and KYC procedurs. However many now wonder if DEXs are also obliged to comply with the BSA, even though most projects seek to decentralize ownership …

Cybercriminals have continued to come up with new, innovative attack vectors that a lot of prominent crypto platforms are still falling prey to. For example, Johnny Lyu, the CEO of Singapore-based cryptocurrency exchange KuCoin, stated on Sept. 26 that the exchange had been on the receiving end of a major hack that resulted in the firm’s Bitcoin (BTC), Ether (ETH) and ERC-20 hot wallets being affected. Commenting on the hack, Charlie Cai, the media manager at KuCoin, told Cointelegraph: “Following the incident, KuCoin is acting quickly and transparently to deal with it. We are trying our best to mitigate the …

Alexis Direr, a researcher at the University of Orleans in France, has released a paper summarizing the mathematical underpinnings of Uniswap and other exchanges based on Automated Market Makers. Automated Market Maker is the term for a class of decentralized exchange that reached significant popularity in 2020, spearheaded by Uniswap. In a nutshell, these exchanges do away with traditional order books and instead rely on liquidity pools governed by a mathematical formula. Traders are always able to make a transaction with the pool for even the most illiquid tokens, but each order will impact the price of the asset they …