Analysis Crypto by Thebittimes.Com

The total value locked in DeFi protocols remained below $50 billion after another week of exploits. Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week. The past week in DeFi was dominated by exploits and hacks, with three DeFi platforms losing nearly $39 million. Alphapo’s hot wallets were exploited for over $32 million, Era Lend was drained for $3.4 million, and the decentralized finance protocol Conic Finance was exploited for almost $3.5 million. In better news, the DeFi ecosystem was buzzing with development s in zero-knowledge- proof (ZK- proof ) scaling solutions as the layer-2 sector heats up despite the bear market. The exploits and bearish market condition took their toll on DeFi protocols, with the total value locked in DeFi protocols seeing a significant drop over the past week. Alphapo hot wallets hacked for over $31 million Crypto payme...

The Dubai-based exchange released its reserve wallet addresses shortly after the FTX fiasco began, and now it launched a verification system for users to track its holdings. The cryptocurrency exchange Bybit joins the parade of exchanges in the industry pushing for transparency post the FTX catastrophe. On Dec. 12, it announced that it has launched a Merkle Tree-based proof-of-reserve system. The new transparency initiative allows its users to directly verify Bybit’s holdings, along with their personal assets deposited into the exchange. The feature is available to all users with funds in both trading accounts and funding accounts, which also includes crypto holdings in Bybit Earn products. Additionally, the new feature enables verification of Bybit’s wallet ownership, that assets are held with a 1:1 ratio. Ben Zhou, the co-founder and CEO of Bybit, commented on the usage of Merkle Trees in liquidity verification: “The cryptographic solution brings forth a crypto-native, trustless mo...

According to Powell, a complete proof-of-reserve audit must include the sum of client liabilities, user-verifiable cryptographic proof that each account was included in the sum and signatures proving the custodian’s control over the wallets. Disclaimer: The article has been updated to reflect Binance CEO CZ's response to the concerns raised by  Kraken CEO Jesse Powell. The collapse of the crypto exchange FTX revealed the importance of proof of reserves in avoiding situations involving the misappropriation of users’ funds. While exchanges have proactively started sharing wallet addresses to prove the existence of users’ funds, several entrepreneurs, including Kraken CEO and co-founder Jesse Powell, called the practice “pointless” as exchanges fail to include liabilities. According to Powell, a complete proof-of-reserve audit must include the sum of client liabilities, user-verifiable cryptographic proof that each account was included in the sum and signatures proving the custodian’...