Crypto Weekly Digest: DeFi Sector Faces Setbacks as TVL Drops by $5 Billion

Crypto Weekly Digest: DeFi Sector Faces Setbacks as TVL Drops by $5 Billion

Crypto News – A recent analysis by investment management firm VanEck has shed light on a 15.5% drop in economic activity within the DeFi sector during the month of August. On the flip side, Blockchain Capital has made significant strides by unveiling two new crypto-centric funds, amassing a total of $580 million.

Balancer protocol attributes a recent exploit to its DNS service provider, citing a vulnerability in the code that allowed malicious actors to hijack the front end. Additionally, Chainlink and Arbitrum have joined forces to bolster decentralized application (DApp) development on Ethereum’s layer-2 scaling solution, Arbitrum.

The top 100 DeFi tokens experienced a bearish week, a consequence of market decline following the United States Federal Reserve’s decision to pause interest rates, with the majority of tokens reflecting losses.

VanEck’s analysis, based on their MarketVector Decentralized Finance Leaders Index, revealed a significant downturn in exchange volume, dropping to $52.8 billion in August, marking a 15.5% decrease compared to July.

Blockchain Capital, a venture capital group, has introduced two new funds totaling $580 million, aimed at investments in infrastructure, gaming, DeFi, as well as consumer and social technologies.

In a move to enhance cross-chain DApp development, blockchain oracle network Chainlink has integrated with Ethereum layer-2 scaling protocol Arbitrum. The collaboration has culminated in the mainnet launch of the Chainlink Cross-Chain Interoperability Protocol (CCIP) on Arbitrum One on Sept. 21, providing developers access to Chainlink’s solution, leveraging Arbitrum’s high-throughput, low-cost scaling.

Balancer, an Ethereum-based automated market maker, pointed to a “social engineering attack” on its DNS service provider as the cause behind a recent exploit, resulting in the compromise of its website’s front end and an estimated theft of $238,000 in crypto.

In another setback, None Trading, a trading tool for cryptocurrencies and nonfungible tokens built on Discord, had to cease operations due to a “critical exploit” within its infrastructure. This incident led to a substantial loss of funding and essential team tokens, rendering it impossible to sustain effective operations.

A comprehensive overview of the DeFi market, based on data from Cointelegraph Markets Pro and TradingView, illustrates a bearish week for DeFi’s top 100 tokens by market capitalization, with the majority of tokens experiencing losses. The total value locked in DeFi protocols plummeted to $44 billion.