#48

Week 32 2021

200 issues


Grand Theft DeFi

Crypto Tokens worth $600 Million stolen from Polynetwork – Marking one of Defi’s biggest heists ever.

Sun 15th Aug 2021

Digital Pirates Pulls Off Defi History’s Biggest Heist

The hackers have set a record within the decentralized finance space by stealing more than $600 million raising a lot of eyebrows. Since the event, it has been the talk of the town among the investors.

The Ethereum address, which has been reported to be involved in the hack, contained 2,858 ETH tokens with a value of $266.5 million.

The Binance Smart Chain address has more than 6,610 BNB tokens. The value in USD terms represents just a bit over $252 million.

The Polygon address shows $85 million. The total amount stolen exceeds $600 million.

On August 10th at around 1 pm UTC, the official Twitter handle of PolyNetwork announced that it had experienced a security breach.

“It Is The Opportunity That Makes The Thief”

It was soon discovered that the hacker’s initial source of funds was Monero (XMR), which he then converted to ETH, BNB, and MATIC in the exchange. The nature of the hack was using private keys, access to the keys was made easier due to the Smart Contract design adopted by PolyNetwork.

A smart contract belonging to PolyNetwork used a single keeper wallet, which allowed the hacker to sign a contract transferring all funds to his address.

Salient point - PolyNetwork had not verified their smart contracts using Etherscan.

“You May Be A Thief But There’s Far Better In You Than Bad”

PolyNetwork published the following message trying to establish a communication channel with the hacker and retrieve part of the DeFi tokens:

“When a thief kisses you, you count your teeth”

The hacker then sends a transaction from one of the wallets containing the stolen funds back to the same wallet. It included a message that reads:

“IT WOULD HAVE BEEN A BILLION HACK IF I HAD MOVED REMAINING SHITCOINS! DID I JUST SAVE THE PROJECT? NOT SO INTERESTED IN MONEY, NOW CONSIDERING RETURNING SOME TOKENS OR JUST LEAVING THEM HERE”

Generous Hacker Rewards Tipper While Being Chased

PolyNetwork advised its customers, including cryptocurrency exchanges like Binance and Coinbase as well as miners to block transactions from specific addresses to prevent the hacker from exchanging digital tokens into cryptocurrencies. 

In response to Polynetwork's request, Tether froze approximately $33 million. A random guy tipped the hacker regarding the freezing of USDT. Now, what do you expect from pirates who turned millionaires in a matter of a few minutes? Yeah, you are right, the guy was instantly rewarded with 13.37 ETH by the hackers. 

SlowMist, a blockchain security firm said in a tweet that their researchers had “grabbed the attacker’s inbox, IP and device fingerprints and are tracking possible identity clues relating to the PolyNetwork attacker. 

Reactions From Centralised Exchanges

Changpeng Zhao CEO of the cryptocurrency exchange Binance, wrote on Twitter:

Jay Hao, CEO of Malta-based cryptocurrency exchange OKEx tweeted:

Paolo Ardoino CTO of the Hong Kong-based cryptocurrency exchange Bitfinex tweeted:

CHECKMATE "The hacker is ready to surrender"

In a strange turn of events Wednesday, the hackers began returning some of the funds they stole. The move came less than a day since the attacker’s ID information was reportedly obtained by Slowmist. The hackers sent a message to PolyNetwork embedded in a cryptocurrency transaction saying “Ready to return”. The DeFi platform responded requesting the money be sent to three crypto addresses. Seven minutes before sending the first transaction returning some of the funds the hacker created a token called the “Hacker is ready to surrender”. At the time of writing this article, most of the stolen assets have been returned by the hackers.

The Dark Knight - A Twist In The Tale

The hackers have been leaving messages alongside the transactions. In one such message, the hacker said that they “just dumped all the assets,” and  “hacking for good, I did save the project”. Adding more spice to the events the online pirates are asking for donations for their generosity. They also conducted a Q&A explaining the motivations for the attack. The online pirates said they took the funds “to keep it safe” after spotting a bug in the smart contract. The hackers ended the story by saying “I prefer to stay in the dark and save the world”.   

DeFi - Hacker’s Honey Pot

About $80 billion is locked in DeFi applications, making them an attractive target. This year, DeFi-related hacks made up more than 60% of the total hack and theft volume of crypto attacks, rising from 20% in 2020, according to crypto security company CipherTrace. At $156 million, the amount netted from DeFi-related hacks in the first five months of 2021 already surpasses the $129 million DeFi-related hacks throughout all of 2020, CipherTrace said.

Key Takeaways

During this unfortunate event in the Defi, We could see Twitter on fire within minutes after the first report. People following various block explorers started capturing every movement of the hackers moving the funds. Weird messages embedded into the transactions were just entertainment at its core. People from different parts of the globe reported and shared lessons within a matter of hours. Immaculate transparency could be noticed during this course of events which might almost be impossible to achieve in the real world situation.

"I think this demonstrates that even if you can steal crypto-assets, laundering them and cashing out is extremely difficult, due to the transparency of the blockchain and the use of blockchain analytics.”

Tom Robinson, Chief scientist of blockchain analytics firm Elliptical sent via email.



Crypto Venetians Twisted Art Heist

Another Heart-rending NOT-SO-COOL Theft in THE WEEK!

Sun 15th Aug 2021

When the NFT community was really enjoying the first-ever experience of physically being at Venice Beach to mint their Cryptovenetians NFTs and getting to know, hang around with people of similar interests in person, it came as a nightmare when the balance of 309 NFTs out of 1000 was stolen by a malicious actor(s) overnight!

While the whole CV team and the thousands of people waiting for their appointments, awaiting their opportunity to experience the magic of in-person minting, were asleep, the tokens numbered 692-1000 were stolen.

A Short Recap about CV:

CryptoVenetians are a generative art NFT created via the Art Blocks contract on the Ethereum chain. The main highlight of the NFT is that you should be present physically to mint the NFT at their Bright Moments Gallery at 62 Windward Ave in Venice Beach, CA. You should have 10 BRT tokens to mint the NFT. It is not a walk-in, just go and mint anytime scheme but a prior appointment is required to experience the absolute fun of one of its kind. Only 10 persons get reservations per day and each could return home with one minted CV and a heart full!  Only 1000 CV NFTs ever were available for minting.

What happened on August 11, 2021? 

Ans: “The CryptoVenetian Heist” as quoted by the team

It was a tough and tiring day for the cryptovenecians team when they woke up to discover that roughly 12,000 BRT tokens were taken from a Bright Moment DAO member’s wallet and were used to strip the team and community off of their remaining 309 CVs. HOW? The thief(s) created over 300 individual wallets and created a series of transactions in a short while. The total value of stolen NFTs at the time of incident amounts to 6 ETH per NFT, totalling 1800 ETH of NFTs equivalent to $5 million on the day.

SO TEAM, HOW WOULD YOU LIKE TO RESPOND?

Very responsibly, very convincingly - reiterating the faith of community members and winning their hearts again.

The stolen NFTs were available for sale on the Opensea market later the day for 1-2 ETH per NFT. The Cryptovenetians team had announced immediately that “owners of cryptovenetians #692-1,000 will not be provided with utility otherwise available to legitimate members of the community”, requesting to not buy the stolen NFTs as the metadata of these CVs were to be erased soon by updating the ArtBlocks API image hosting server. ”Once this is deployed, CVs obtained through the heist will not display properly on auction sites like OpenSea”. This would differentiate the legitimately minted CVs and hence would increase their value.

The members with an appointment for minting were called personally to inform them of the situation and are offered an IRL minting experience, with a time of course. The outpouring of support from the community was overwhelming. Nevertheless, the team is determined to keep providing such wonderful experiences to its people - they are moving forward with their roadmap and as previously planned, the opening of physical minting experiences across cities around the world, starting with New York this fall.

“We will grow from this together and come back stronger than ever”.

CryptoVenetian Team's Request For A Return

On 14th August, Cryptovenations requested for a return of the missing NFT’s through a tweet.

Devil Lives In The Details And Blockchain Never Lies

Detailed analysis of the events connecting the dots was published online.

Highlights

As suspected earlier, the key question was how come none of the team members of the DAO had no clue what happened during that day, on top of that they didn’t seem that eager for investigation, that’s just us.

A further breakdown here 👇

The IRL CV minting process works as follows:  

  • The visitor schedules an appointment

  • Next, one must send 20 BRT tokens to a computer program that creates the CryptoVenetian and then pays in ETH (the fee) to have their

     

    .

  • Without this BRT token and Ethereum fee, the transaction will not occur. 

  • Therefore the Ethereum and BRT tokens used to pay for the fees and activate the computer program to create the CryptoVenetian must originate from somewhere; it does not just come out of thin air.

  •  In addition, only one person can create a CryptoVenetian in person.

  • To acquire BRT tokens, you must be in person at the gallery to receive them. 

Hence, one cannot create a CryptoVenetian without:

  • Being personally present onsite at the gallery

  • Acquiring 20 BRT tokens at the gallery and sending them to the computer program that creates the CryptoVenetian.

  • Paying for the transaction in Eth to create the CryptoVenetian.

Perhaps, This exhibit connects the dots to visualize some of the key activities of the DAO member ( claimed to be hacked )

The question of an outsider having access to the BRT tokens has raised speculations as reviewed in the below article  

CryptoVenetian Heist Analysis

Heist Or A Scheme? 

Now that's a million-dollar question at the moment. With the pure transparency that blockchain offers we believe the question gets answered in the days to come.



Russian PFP Gang

Russian PFP Gang

The newest scam to come out this week in the world of DeFi is an ongoing pattern of three Russian developers posing as women to sell their different NFT projects.

Sun 15th Aug 2021

It was discovered after some investigative work by fellow NFT buyers and developers.

The first project to be called into question was an NFT profile picture (pfp) project called Fame Lady Squad. The project claimed to be a set of “8888 beautifully drawn females with different traits such as tattoos, clothes, hairstyles, earrings, etc. were created, as it seems, with one purpose: to invite more women to the crypto and NFT sphere.” 

The project launched in July and quickly caught fire, gaining notoriety from big names like Garyvee, who even mentioned the project in a New York Times article

But the project was called into question by Fedor Linnik and Haley after they noticed suspicious details in the project, which included the similar appearance of multiple other projects like Cyber City Girls Club and Unicorn GG Club.

Click the threads to read the full amount of evidence they both have.

One of the craziest pieces of evidence to come out is the accusation that the same devs make multiple projects. There’s evidence of multiple projects partnering and shilling each other, giving the impression that the same dev team just makes them. 

At first, the team denied all accusations saying they were false and created out of jealousy. But, after public pressure, one of the developers came forward and apologized for posing as a woman in order to sell the NFT project and his involvement in other projects. The dev Max Rand tweeted out, “Guys, I confess. I am the dev of the projects. Sorry for the lie; I was too afraid to say this because of a lot of threats on my side, my stupidity, and not understanding US market culture rules.” 

In his apology, Max also stated that he, John Russo, D Mefi, and UnicornGGClub would donate $100,000 for new NFT projects and strengthen the NFT community. The team also turned over the Fame Lady Squad contract to the Project Phoenix team, an NFT group lead by women created to keep the Fame Lady Squad project alive. 



Week 32 Biggest NFT Sales

This is the breakdown of the biggest sale of the week. This week can best be described as the week of Artblocks by the sheer amount of huge sales we had.

Sun 15th Aug 2021

- 1 -

Art Blocks

The amount of Art Block that sold for an extraordinary price could be its own list. There were so many record sales that our own Twitter couldn’t keep an updated top 10 highest sales list. Let’s go through some of the biggest ones of this week and hope that we don't miss too much. Chromie Squiggle #3784 sold for an Artblocks record 750 ETH. The Ringer curation had a good week with Ringer #52 sold for 400 ETH and Ringer #360 sold for 370 ETH. Archetype #213 sold for 320 ETH and Archetype #527. The Fidenza series is still doing well when Fidenza #607 sold for 300 ETH and Fidenza #310 sold for 250 ETH. And of course, there’s squiggles, Chromie Squiggle #4008 sold for 250 ETH, Chromie Squiggle #1780 sold for 235, and Chromie Squiggle #2557 sold for 130 ETH. The crazy thing about all these sales is everyone except one is in the top 10 largest Art Blocks Curated sales. 

The Art Blocks playground even had a huge sale when The Eternal Pump #40 sold for 225 ETH. 

-2-

Bored Apes YC

For the first time in four weeks, Punks do not come out on the first spot. This week Bored Apes YC had a great week. Gold Ape #3749 sold for a record 400 ETH. Ape #7345 sold for 210 ETH, making it the second-highest Ape sale. 

-3-

Punk

The Punk market is still pumping with two major hoodie sales this week. Punk #7748 sold for 240 ETH and Punk #6634 which has 3D glasses sold for 300 ETH. These sales come as CryptoPunks $1 billion total volume. 

-4-

Pegz

Pegz is making a return in this list when Peg #103 sold for an apparent 420 ETH...good one. 

-5-

Beeple

This might not be that high of a sale but because it's Beeple it’s worth mentioning. After being dormant for a long while, there was a big sale of one edition of Beeple’s first $1 drop sold for 95 ETH. The last one sold two months ago for 41 ETH. 



Virus Let Loose

Highly contagious Kudzu virus leaked from lab

Sun 15th Aug 2021

Let’s Go Green with Virus (not the pandemic causing 👾), Kudzu is an NFT virus artwork that is on a mission to proliferate across the Ethereum network.

Kudzu takes its name from a green creeper, native to East Asia and is considered an invasive weed elsewhere in the world, a threat to local species.

Kudzu Rampage

Kudzu infection has gained momentum since it escaped from the lab. To get infected someone needs to send you the Kudzu NFT (We can’t call it an NFT as it leaves some traces everywhere it goes) or you can self-infect yourself by purchasing one from OpenSea. Addresses can only be infected once. Wallet gets infected with a unique avatar. A small segment of the Token ID is reserved as the viral chromosome allowing Kudzu to pass on one trait to recipients and one random gene. As Kudzu spreads the variant evolves and becomes more complex.

Kudzu No 67, price - 2 ETH, at opensea (during the time of writing)

 

Kudzu is a creation inspired by….No wait, not Covid !!!  

Elk Cloner is one of the first known microcomputer Viruses that spread "in the wild", i.e., outside the computer system or laboratory in which it was written. It attached itself to the Apple II operating system and spread by floppy disk. It was written around 1982 by programmer and entrepreneur Rich Skrenta as a 15-year-old high school student, originally as a joke, and put onto a game disk. Elk Cloner targeted Apple II machines, causing them to display the following poem.

The Generated image is a grained Jpeg compression similar to a Deep Fried Meme.

The Kudzu Graph

If you are infected, find yourself in the Kudzu virus outbreak graph. You just need to type your account address in the search and trackback your virus variants.


“We contacted the team and they all are excited about its resurgence and got their story from a first angle perspective. We also want to highlight another Evolutionary project from the Folia Team”. 


The NFT Laboratory - The Mutant Garden Launched By Folia 

The Mutant Garden is a new project from Harm Van Den Dorpel. Mutant Garden Seeder consists of 512 generative unique Ethereum NFT’s created by Harm Van Den Dorpel known as Mutants, this was released in collaboration with Folia in 2021. Mutants Garden has its origin in Harm’s earlier series Death imitates Language from 2015 which had a similar genetic algorithm bred over 100,000 digital paintings.

Death imitates language

Properties And Life Cycle Of The Mutant

Only one mutant can be minted per block number. The transaction hash of this chosen birth block is taken as a seed for a deterministic random function, used to populate a cartesian genetic network (“chromosome”).

User chosen seed block → Block hash → Properties + seed number → Deterministic random function → Cartesian genetic network + window dimensions → SVG → Artwork

Here is the catch, mutants mutate over time by themselves, based on the similarity of the seed block hash and the current block hash.

To add more life to the mutant it can have properties that include “Complexity”, “colour mode”, and “mutation frequency” which are fixed upon birth and do not change over time.

Frequency Of Mutation

At birth, each mutant receives a fixed mutation probability, based on the seed block hash. The most stable mutants mutate maybe once every five months, and the most dynamic ones mutate every single day. The decision of which gene to mutate and to what is dictated by the current block hash. This means that mutations, even though they are random and unpredictable, are fully deterministic. 

The NFT Virologist - Harm Van Del Dorpel

Harm was a pioneer in the NFT’s and founder of the Left Gallery. He also holds the merit of being the first artist to have an NFT acquired by a museum. He later expanded in 2020 with the first iteration of the Mutant Garden project + software. After a long period of development, the mutants are available in many variable editions.

For People In Search Of Mutants

Each mutant can only be adopted once, and only one mutant can be birthed per block. Mutants must be adopted within 50 blocks, otherwise, they will perish and be made unavailable to mint.

Well, viruses were never fun till now, and gardens mutated in sci-fi only. Folia Combines Botany and Virology with Blockchain technology in an artistic way.



Daily Gwei - Fuel For Thought

Anthony Sassano (Sassal)

Sun 15th Aug 2021

The Daily Gwei ecosystem provides education, tools and resources to keep you in the loop with everything happening in the Ethereum ecosystem, whereas The Daily Gwei Refuel is the podcast where you get tonnes of value and perspective. Refuel covers what happened in the Ethereum and crypto ecosystems over the previous 24 hours by none other than Anthony Sassano  (no one can beat his style of introduction to refuel)

Sassal has been a phenomenal personality and an influential figure in the Ethereum community, Though, he has been involved with multiple projects, like Polygon, Set Protocol, Index Coop, mstable, and many others. We want our viewers to meet the person who is a Co-founder of ETHhub and Founder of The Daily Gwei, Both are Educational ecosystems where everyone has a chance to learn, contribute, make a mark for themselves in this space. To spice it up there are alphas from time to time 😉.

 What does it cost you for all the benefits??

 Nothing, yeah folks, absolutely nothing. Daily Gwei discord is a fun interactive library, Crypto space can be sometimes difficult to navigate, there are scams left and right.

We are featuring already 2 exploits that happened this week, and when we look back, millions if not billions of dollars worth of Crypto are either lost, stolen, and scammed with Ponzi and pyramid schemes. We wanted to feature those who shine the light and uplift those who are in dark, Sassal is one of the very few to have walked that path in tough times when there were uncertainties about ETH’s future and he directly shares his wisdom and perspective non-stop in every medium possible.

“Real Poverty Is Lack Of Education”

Most people who dive into crypto end up being traders, or lose hope during a single bear market. What could be the reason for this FUD ?? The most obvious reason is lack of knowledge and fake financial advisors acting like saints who exploit the situation to push people into investing in scam projects and shitcoins. Daily Gwei has served as a platform that provides education with no matter who you are and which part of the world you come from.

We at Redlion have been striving to bring valuable content to our community from the NFT space completely unbiased and we are following the likes of Industry leaders like Sassal. As our founders’ vision has always been to give back and contribute to building this space with the solid foundation it deserves. We look up to you for inspiration and motivation.

For those who are interested in Everything Crypto, you can find real value content and community down there 👇

Newsletter: thedailygwei.substack.com

YouTube: youtube.com/channel/UCvCp6vKY5jDr87htKH6hgDA

Twitter: twitter.com/thedailygwei

Discord channel: discord.gg/4pfUJsENcg



The Absolute Bull🤫it NFT Game?

The Absolute Bull🤫it NFT Game?

Unit (ERC1155) and Absolute Unit (ERC721) are NFT games with a Reverse Dutch Auction mechanism. Which requires only bulls for the game.

Sun 15th Aug 2021

A total supply of 1000 Unit NFTs is claimed to double upon completion of one cycle. You are supposed to be waiting for your turn to double the value of the Unit you hold. The same formula is applicable for the Absolute Unit NFT only that the total supply is just 1 NFT and it doubles for every purchase. Sounds wow, isn't it? Not just that..

As an alternative, Unit holders are also promised to receive an airdrop of 1-to-1 generative art NFT in the future. And the interesting fact is that the NFT itself is still in the inception stage, and so obviously no anticipated date of availability of the NFT for a free airdrop! which looks like... 👇

NFT owners… All you could do is just hold on with a leap of faith hoping for the best, as this is all about bull case scenario and requires a bigger bull each time.

Absolute Unit

Unit Their Tokenomics Sounds Very Interesting.

Units cost 0.8 ETH per NFT and Absolute Unit costs a whopping 256 ETH per NFT at the time of writing. Both the NFTs are independent games yet interconnected as the Absolute Unit holder gets a 1% of every Unit sold.

 The team member confirmed that both the NFTs cost 0.025 ETH at the launch and then the involvement of investors has pushed the price later to the current price!

How does it work?

The smart contract is deployed in such a manner that when a cycle completes, the NFT is sold only at double the price it was bought for.

“So if the game starts with 0.0125 ETH for the first piece, the 1001st buyer will buy it from the first buyer at double the price of what the former paid (0.0250 ETH), at an unknown date, number 1002 buys from the second buyer and so on..

You can't hold it, you should sell - that’s the game it seems!

“The smart contract moves the amount directly from one wallet to the next, when a user enters the game he pays the previous owner and gets a tracker, this tracker is then used by the smart contract to know where to move the funds next, the tracker is untransferable by anything but the smart contract” as explained by one of the Unit team members.

DeFi had Degens, the NFT market is quite young and every day we see it expanding geometrically with users flooding in with FOMO. We shall soon see new-gen millennials and ZGens apeing into projects like these.

Well, on the other side, as the mantra goes in crypto “make sure to do your diligence, assuming every project is a scam/Ponzi unless proven otherwise”.



WhereIDraw

is a former freelance illustrator and art director turned NFT artist, exploring fantastical worlds and unlikely marriages of unexpected subject matter.

Tue 17th Aug 2021

He welcomes people to take a glimpse of what goes on in his imagination: abstract narratives and characters that grip to reality by their fingertips. He challenges the often-clinical cleanliness of the digital space with custom textures and brushes that recreate analogue aesthetics within a medium that can never age the same way as traditional methods would as they are exposed to the elements.

WhereIDraw strives to create artwork that people will connect with, inviting viewers to read into his pieces and mould their own stories around it. He uses his art as a tool to decode the world around him and provide an escape from the mundane grind of everyday life, inspired by his own experiences and driven by his inner child: full of dreams, magic and fantasy. 

A strong believer in the community aspect of the NFT world, he co-founded and ran the Clubhouse NFT’s Good Vibes room every weekday for 4 months, which grew to thousands of members encouraging and helping those new to the space to find their own voice in NFTs. Now he is handing the reins over to the Good Vibes community and getting ready to launch even more of his own work as daily drops of editions and 1/1’s. 

You can follow his journey on Twitter and Instagram on @whereidraw or join his discord to keep up to date with what he does next. 

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ArtDrop

Sat 21st Aug 2021

Illumination

A flame won't dim after lighting another

200 editions

WhereIDraw

@WhereIDraw

NFT Artist - Community Lover - Fish Out of Water - Clinging to reality by the fingertips

That's all for this week!