Some of the largest decentralized finance (DeFi) protocols are working on replenishing their treasuries while getting ready for the Ethereum Merge.

ETC Group has announced the launch of a new Ethereum exchange-traded product (ETP) ahead of the Ethereum Merge, which is scheduled to occur in mid-September and will see the Ethereum network transition to Proof-of-Stake consensus.

Avalanche-based lending protocol Nereus Finance has been exploited for $371,000 worth of the USDC stablecoin through the use of a flash loan, which is a loan taken and repaid within a single transaction.

CryptoCompare is delighted to announce our partnership with the world’s leading quant finance event, QuantMinds International, which kicks off in Barcelona from 7-10 November 2022.

Top stories in the Crypto Roundup today:

• DeFi Protocols Start Replenishing Treasuries After Market Meltdown
• ETC Group Launches ETP Based on ETHPoW
• Avalanche Flash Loan Leads to $371,000 Exploit
• Get a 10% discount for QuantMinds International 2022!

DeFi Protocols Start Replenishing Treasuries After Market Meltdown

Some of the largest decentralized finance (DeFi) protocols are working on replenishing their treasuries while getting ready for the Ethereum Merge.

Aave Companies, the main developer behind the Aave Protocol, is looking to receive $16.28 million from the project’s decentralized autonomous organization, governed by AAVE token holders. It’s the first time the organization has asked the DAO for funds.

Similarly, Lido DAO, which manages liquid staking protocol Lido Finance, has recently approved a proposal to sell 10 million of Lido’s native tokens to the venture capital firm Dragonfly Capital. The sale followed the rejection of several proposals on how to manage its assets in order to cover two years of expenses.

At its height, the DeFi sector attracted billions of dollars in investment and saw activity surge, which generated millions of dollars in revenue. The value of DeFi protocols’ treasuries quickly surged, but the bear market has been taking its toll.

Aave DAO’s liquid assets now stand at $378 million, compared with $800 million in April. Lido DAO went from a similar figure to around $344 million. Uniswap’s treasury also dropped from $2.5 billion to around $1.7 billion.

ETC Group Launches ETP Based on ETHPoW

ETC Group has announced the launch of a new Ethereum exchange-traded product (ETP) ahead of the Ethereum Merge, which is scheduled to occur in mid-September and will see the Ethereum network transition to Proof-of-Stake consensus.

ETC Group’s new ETP offers exposure to a potential fork of the Ethereum network, represented by a group of miners opposing the view to PoW. A chain split would lead to the creation of a new token, ETHPOW, which is the basis of ETC Group’s new product.

The physically-backed product, called ETC Group Physical EthereumPoW, or ETHWetc, is expected to be listed on Deutsche Boerse’s electronic trading platform Xetra under the ticker symbol ZETW.

The listing is expected to occur shortly after the hard fork itself. ETC Group noted that ZETW will not replace the original ETC Group Physical Ethereum (ZETH) product. In fact, ZETH holders will receive ZETW automatically on a 1:1 basis on their brokerage accounts, in a way similar to the way ETH holders will receive ETHPOW on the new chain.

Avalanche Flash Loan Leads to $371,000 Exploit

Avalanche-based lending protocol Nereus Finance has been exploited for $371,000 worth of the USDC stablecoin through the use of a flash loan, which is a loan taken and repaid within a single transaction.

Blockchain security firm CertiK was one of the first to detect the exploit, and noted that the attack impacted liquidity pools on Nereus associated with decentralized exchange Trader Joe and automated market maker (AMM) Curve Finance.

In a detailed post-mortem report, Nereus Finance noted that an “exploiter” was able to deploy a custom smart contract that used a $51 million flash loan from Aave to manipulate the AVAX/USDC Trader Joe LP pool.

As a result, the attacker minted $998,000 worth of NXUSD against $508,000 worth of collateral, and then swapped the capital into different assets via various liquidity pools to ultimately walk away with $371,000.

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