Turns out every dog does not necessarily have its day after all.
Welcome to the Daily Forkast. April 21st, 2022.
I'm Angie Lau, Editor in Chief of Forkast covering all things blockchain.
Well, yesterday proved to be a bit of what the Brits would call a dog's breakfast for
Dogecoin, but it was a great one for the apes.
Instead, with ape coins soaring 30%.
We're going to take a look at how ape coin stole Dogecoin's thunder and whether that
can continue.
Plus, a whole lot more coming up.
Let's get you up to speed from Asia to the world.
Join thousands of NFT traders who already start their day on CryptoSlam.
Well, let's kick off with the growing list of Russian firms facing sanctions due to the
country's invasion of Ukraine.
The latest to face sanctions from the US is cryptocurrency miner Bitriver and its ten
subsidiaries.
In a statement, the US Treasury said this is the first time it has designated a virtual
currency mining company as an entity attempting to evade sanctions.
It also noted that Russia has a comparative advantage in crypto mining due to its energy
resources and cold climate.
And it went on to say that mining companies reliance on imported equipment and fiat payments
make them still vulnerable to sanctions.
The US Government's move reinforces recent efforts to cut Moscow from channels that could
facilitate sanctions evasion.
Earlier this month, the Treasury also sanctioned the Russian darknet market, Hydra and related
crypto exchange Garantex, which was associated with ransomware activities.
Now, to cushion the effect of the sanctions in the Russian economy, the country proposed
Bitcoin and national currencies as payment options for energy exports last month.
Meanwhile, over in China, the Hangzhou Internet Court has ruled that Nonfungible token or
NFT marketplaces are obliged to review the copyright of NFTs.
Now, the ruling comes after a dispute between the plaintiff Qice company and the defendant,
a technology company over the use of the Fat Tiger Vaccine NFT.
Now, the court favored the plaintiff and asked the defendant to stop the infringement and
compensate the loss of ¥4,000 or just over US$600.
A far cry from the original demand of ¥10 million or US$1.5 million.
The court added that the NFT marketplace operated by the defendant, failed to fulfill its duty
of care for review.
You can find those stories and more at Forkast.News.
Meanwhile, Doge Day turned into somewhat of a disappointment for the memecoin's fans after
the Apecoin community stole their thunder.
Win all silver back, you could say.
And while memecoins like doge are regarded as a somewhat of a joke by many in the crypto
community, could Apecoins have real staying power?
Forkast's Lachlan Keller reports.
Dogecoin investors had been hoping to recreate the success of last year's Dogecoin Day, which
saw the coin soaring 500% and becoming the fifth largest token in the world by market
cap.
However, it seems those days are over, with the coin trading down a quarter of a per cent
in the 24 hours to Thursday morning in Asia, as well as dropping to 12th place in the crypto
rankings.
One expert told Forkast that while Dogecoin does carry brand value, he's wary over the
future of it and other meme coins.
I just can't be bullish on meme coins over the long term.
For sure, during the awakening period of cryptocurrency, there are these hypes and there are these
fads and there are these interests.
And as I said, dogecoin is fun.
But then I'm mostly talking about the picture.
Like it's a funny picture and people eventually will realize that this is money and money
can disappear and then it will never come back.
But it wasn't all bad news in the animal themed crypto coin world with the Ape ecosystem's
governance token Apecoin taking the spotlight.
Instead, it was trading around the US$16 mark Thursday morning in Asia.
Apecoin only launched just over a month ago and will serve as the native token for the
Bored Ape Yacht Club creator Yuga Labs, a soon to be launched Metaverse Project - Otherside.
The coin's price surge began after Bored Ape Yacht Club's members started generating social
media buzz around eight point priced public land sales in Otherside.
So we'll be keeping close watch on the launch of Otherside, which Yuga Labs says will happen
this month.
For Forkast, I'm Lachlan Keller.
Beanstalk - a decentralized, credit based Stablecoin protocol lost $76 million in an
attack this week.
The perpetrators used a flash loan to exploit a design flaw in the Protocol's governance
code.
We've got Mark Lamb here, Chief Executive Officer at CoinFlex, a leading crypto derivatives
exchange and yield platform.
Joining us now to discuss the vulnerabilities in the new economy.
Great to see you again, Mark.
Great to be here.
How many of these crypto exploits are you talking about here?
The attacks show no signs of slowing down.
What do you make of the governance exploit that hit Beanstalk?
The team revoked governance privileges but too little, too late.
Flash loans are this basic concept where as long as you pay something back within a series
of transactions, you can borrow as much money as you want.
And basically the the hacker borrowed, I think, $150 million or something.
Put that into Beanstalk borrowed money from Beanstalk and then they they were able to
buy enough of the governance tokens of Beanstalk that they were able to just change the rules
of the Beanstalk protocol so that borrowers didn't need to repay loans, which is a very
helpful rule change if you're in the majority of the borrow on on that platform.
So it was it was it's an interesting use case where I think it really is a testament to
you can have a smart contract system where you think you've you've planned everything.
But if you, you know, if if you're able to change the rules by simply owning the majority
of the tokens and there's no protection around that change, you know, the majority token
holder can do whatever they want.
You do get problems.
And and these risks are very, very difficult to protect against 100%.
This is this is one of the reasons why, unfortunately, so many people trust centralized finance.
As an investor, as as somebody who's who's trying to navigate this space, what are the
red flags?
How can the industry perhaps prevent this situation from happening again?
The biggest thing is as an investor in the space, if you are if you're looking to use
DeFi, use a huge protocol that has existed for more than six months and has billions
and billions of dollars in it.
I mean, six months is a long time when the whole world could can read your code and exploit
your code if you want to use a platform that doesn't have billions and billions of dollars
in it and a long time in the market, make sure you're a programmer.
This exploit could have been mitigated by a time delay in the governance vote that would
have that would have solved it, you know, but that wasn't put in place.
And it's one of those things.
What's the trusting large large protocols is one.
Audits is another, more public bounties, more research towards white hat hacking activities
in crypto.
Cybersecurity hacking is is an arms race and it's one which, you know, you're constantly
dealing with people that are more advanced and more advanced and come up with with smarter
and smarter things.
In an ironic twist, I guess the developers of the protocol have offered the hacker keep
10% of the amount they stole as white hat bounty if they return the remaining 90%.
I mean, what are the chances of the money being recovered here?
And one of the founders also have been quoted saying chances of a bailout for the project
are low since there's no VC backing.
So who's going to get their money back?
They've traced the funds to the to a mixer.
So Tornado Cash, they've traced them to a mixer.
So I think if if the funds were sitting and hadn't been moved to a mixer, there might
have been a chance of it.
Because ultimately, the reason why hackers do take projects up on that, oh, you can get
10%, but it's clean.
It's it's a 10% that might be legally acceptable.
You know, you can maybe have more defensive ability if you're going to cash it out and
at an exchange, you know, tentative whether an exchange will actually accept that argument.
But you could you could consider yourself a whitehat hacker at that point, but they've
moved them to a mixer.
It's it's not happening.
And explain mixer very quickly for those in the audience who don't get how this acts as
money laundering, mix it up and suddenly it all magically disappears.
Blockchains are extremely public.
They're very difficult to do any type of illicit activity on and compared to like the banking
system or cash.
And so every every transaction is public on a blockchain.
And so one of the issues that these hackers have is if you if you steal $150 million of
crypto in this type of activity, no exchange will accept your funds.
What you can do is you can use a mixing service and that mixing service will at least somewhat
anonymize your coins.
What it'll do specifically is it takes all the illicit funds in crypto and it washes
them together and it means that you don't know which type of criminal activity those
coins came from.
You still have a problem, which is CoinFlex and every other exchange in crypto is is still
not going to accept your coins because we know it came from a mixer.
And and so we just assume, well, it's it's probably criminal proceeds of criminal activity.
So there's still an issue for these guys.
But at least it's it's one step in the in the direction of them having more privacy.
What they do from there, who knows, maybe they'll use some other DeFi protocol.
Maybe they'll, maybe they'll go on to hack more things.
It is a hard lesson to learn, but a lesson nonetheless.
And this was, as usual, a great conversation.
Mark, thanks so much.
Thank you.
And finally, a sneak preview of the latest edition of Word on the Block, where we go
beyond the headlines with our guest, Kristin Smith of the Blockchain Association, taking
a deep dive into the progress of the digital dollar and regulations for the crypto world.
What we're at a phase now where there's a lot of smaller, individual, thoughtful companies
that are building to provide these solutions that are being built upon these publicly owned,
decentralized networks.
And I think the discussion we're having is one of how can we responsibly innovate in
this space to allow this innovation to thrive while protecting consumers?
And that's a real narrative shift, particularly from where we were in the last administration.
The full episode airs tomorrow, so do check it out.
And that's The Daily Forkast from our vantage point right here in Asia.
For more, visit Forkast News,.
I'm Editor in Chief Angie Lau.
Until the next time.