Welcome to the dark web of DeFi.Authentic investigative journalism and unfiltered creative commentary
Monday, February 3, 2025
Smart contracts don't pause unless something's terribly wrong.
In the endless cycle of DeFi's boom and bust, THORChain may have just written a new chapter - what some are calling crypto's first "on-chain restructuring."
Their core DEX hums along processing hundreds of millions in daily volume, while $200M in user funds sit frozen in their experimental lending protocol.
The validators race to prevent a death spiral, their emergency brake giving them 90 days to untangle themselves from their own algorithmic trap.
They built a cross-chain empire on the promise of trustless swaps, but their venture into leveraged territory has forced them to trust in something far more fragile - time itself.
While their RUNE token bleeds value, their team scrambles to restructure a mountain of debt that threatens to crush not just their lending experiment, but the entire ecosystem they built.
In DeFi's graveyard of good intentions, how many protocols need to die before we learn that experimental features make expensive tombstones?Read more »
Stories and Articles
• Fake DeepSeek token hits $48M market cap amid Chinese AI app hype [Read more]• Clone2Leak attacks exploit Git flaws to steal credentials [Read more]
• Trump, Congress, and the SEC just made all these crypto policy changes [Read more]
• Binance Faces Scrutiny Over $20 Million Crypto Transactions to Wintermute Market Maker [Read more]
• Aerodrome announcing the suspension of two contributors after insider trading of the $VVV token at launch [Read more]
Best of Feed
• The currency for AI is crypto. | @cz_binance 1854 points
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• Ethereum must accelerate (eth/acc). We contribute to many ecosystems, so this is not about zero-sum competition. | @matthuang 545 points
• Andreas Antonopolous explaining Bitcoin to Joe Rogan at $600, 11 years ago. | @pete_rizzo_ 467 points
• Metaplanet was a hotel company with a bleak future until they plugged themselves into the bitcoin network. Now they are one of the most important companies in Asia and the world is taking notice. | @APompliano 290 points
Read more in Rekt's Feed»
Research of the Week
Flash Loan Attacks: The One-Block Heist That Can Drain Millions
In DeFi, a single block can change everything. Flash loans, hyped as a liquidity breakthrough, are now the favorite weapon of hackers pulling off million-dollar exploits. No collateral? No problem. Flash loans let attackers borrow absurd amounts of crypto, manipulate markets, and pay it all back in the same transaction. The result? Protocols gutted, users rekt, and the DeFi space scrambling to patch the chaos.
Flash loans are simple in concept but devastating in execution. They let anyone borrow massive liquidity—no questions asked—as long as they repay it within the same blockchain transaction. It’s like getting handed a suitcase of cash with one rule: return it immediately, or the deal doesn’t happen. While this innovation enables complex arbitrage and trading strategies, it’s also a hacker’s playground. Flash loan attacks exploit weak smart contracts and poorly guarded protocols, using borrowed liquidity to manipulate prices, drain funds, and disappear with the haul.
Here’s how it goes down. The attacker takes out a flash loan from a protocol like Aave. They funnel that borrowed liquidity into a vulnerable protocol. Maybe they manipulate an oracle to feed fake price data, or they exploit sloppy coding to siphon tokens from liquidity pools. By the time the block is mined, the loan is repaid, the profits are pocketed, and the protocol is left holding the bag. The damage? Immediate and brutal.
Protecting against flash loan attacks is an uphill battle. Developers need to step up their game with robust oracle systems that can’t be easily spoofed. Time-weighted average prices (TWAP) can help block sudden price manipulation, while multi-sig approvals and tighter audits add much-needed layers of defense. But let’s be real: no protocol is bulletproof. Flash loans thrive in the space where speed and complexity collide, and that’s where mistakes hide.
For DeFi users, the best defense is staying sharp. Research every protocol before diving in—security audits, developer track records, and community reputation are your lifelines. And remember: if a project promises sky-high returns with no risk, it’s probably bait. Free money in DeFi often comes with a trap.
Flash loans are both a revolution and a wrecking ball. In the wrong hands, they’re not just a threat—they’re catastrophic. As DeFi keeps growing, so do the exploits, and flash loan attacks are proof that in this space, speed doesn’t just kill—it obliterates.
Memes and Videos The Greatest Hack in HistoryThe Shadow Brokers hit the NSA where it hurt, ripping their top-secret cyber weapons and leaking them to the world. Those stolen tools sparked chaos, fueling ransomware like WannaCry that wrecked hospitals, corporations, and entire systems. The hackers vanished without a trace, leaving the NSA exposed and proving no fortress is unhackable. Source: Shortary Source: @DollarSignUFD
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