👻 Scary Leveraged Loan on AaveBy: The Defiant Team DeFi DailyGM Defiers! Happy Friday.Today we get kind of cypherpunk, kind of technical, with our content.Our leading story is on the Gauntlet team sounding the alarm on a large cbETH position on Aave which is just a 9% move away from being liquidated and potentially dragging others with it.Meanwhile, Cryptosat, a team of Stanford University academics signed a file from space to participate in an Ethereum ceremony.And lastly, a zkSync-based project got funds it raised in a token sale stuck in a smart contract — the team behind the Layer 2 network had to come to the rescue.✍️ In today’s newsletter:Researchers sound alarm on Aave positionFunds trapped in Layer 2 platform ZkSyncStanford academics participate in Ethereum ceremony from space 🙏 Sponsored:Satsuma – Subgraph Indexing for Web3 Teams📈 Markets in last 24 hrs:BTCBitcoin$27,887-0.0700%ETHEther$1,857.3-0.350%MKRMaker$691-0.720%SPYS&P500$408.76+0.360%UNIUniswap$5.984-0.300%LDOLido DAO$2.439-1.89%🎬 WATCHWatch our Weekly Recap live stream with The Defiant print team where we discuss recent market action and Layer 2 token valuations, and our podcast with Carl and Trent of the Ethereum FoundationLiquidationsGauntlet Flags Potential cbETH Liquidation Risk On AaveTLDR Risk management firm Gauntlet issued a warning about a large leveraged position using cbETH, the Coinbase token representing staked ETH.A trader has borrowed nearly $39M worth of ETH on lending protocol Aave.They used cbETH worth roughly $46M to back the loan, initially posting only $7,4M worth and then repeatedly borrowed and sold ETH for more cbETH to post as collateral.
If cbETH drops by 9% against ETH the wallet stands to be liquidated.Given the limited amount of cbETH liquidity, that sale could push cbETH’s price still lower, liquidating other smaller accounts on Aave.SO WHAT A liquidation cascade can have negative effects on Aave.“Under certain scenarios, this can create bad debt for the protocol,” Gauntlet’s Paul Lei said.THANKING OUR NEWSLETTER SPONSORS| Newsletter continues below |Get paid for doing what’s good for you.MEV Blocker protects you from sandwich attacks and frontrunning, and pays you when others backrun your transactions.And it’s completely free to use.Add MEV Blocker to your wallet today.
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Sign up today!Sponsored PostSatsuma – Fast, Reliable Subgraph Indexing for Web3 TeamsAre you a developer using subgraphs or other blockchain indexing tools for your dApp? Do you currently struggle with downtime & slow sync times? Or, are you concerned about the sunset of the Hosted Service?Satsuma is a subgraph hosting platform that helps dApps ship faster with 99.9% uptime, 2x+ faster indexing, and better devtools like versioning, direct database access, and performance insights.Projects like Decentraland, Aragon, GMX, Lyra, and Kwenta have switched over and started shipping features faster with improved developer productivity & happiness.“Satsuma has returned a huge amount of development time to the team to focus on product and gives us certainty in our infrastructure.” – Nathan, Head of Eng at SyndicateIt takes < 5 minutes to deploy your subgraphs to Satsuma and swap over to our drop-in GraphQL endpoints.Follow us on Twitter and sign up today!Far OutCryptosat Sends Message From Space To Help Scale EthereumTLDR Cryptosat, a team of Stanford University academics building satellite-based blockchain nodes, has participated in Ethereum’s KZG ceremony by signing a file from space.The KZG ceremony will pave the way for Ethereum’s future EIP-4844 upgrade, which increases the network’s Layer 2 throughput.SO WHAT The move highlights development in the Ethereum ecosystem, with researchers building satellites to power blockchains actively participating in an upgrade meant to help Ethereum scale.Locked FundsZkSync Rescues Gemholic After Botched Token SaleTLDR Gemholic, the team behind the GemSwap decentralized exchange, will be able to retrieve 921 ETH ($1.7M) raised in a token sale, after a bug in their smart contract resulted in the team losing access to the funds on Thursday.Matter Labs, the team behind ZkSync Era, will help unfreeze the contract.SO WHAT The project’s future hangs in the balance, with the Gemholic team announcing that presale participants will determine whether the project should continue as previously planned or return the funds and cease operating.🔎 FROM OUR REPORTERS Liquid staking protocol Lido said staked ETH withdrawals wouldn’t be enabled before “early May.”Layer 1 blockchain Solana introduced “state compression,” bringing the cost of minting 1 million NFTs from $250,000 to $110Avalanche launches Subnets geared towards institutionsRedacted launches overcollateralized stablecoinBNB Chain will undergo a hard fork on April 12, introducing upgrades designed to improve the security of cross-chain bridgesPolkadot’s Astar Network launched support for WebAssembly (WASM)-based smart contracts🌍 ELSEWHERETreasury’s new DeFi risk assessment relies on ill-fitting frameworks (Coin Center)Dogecoin Drops After Elon Musk’s Twitter Stops Using Its Dog Logo (CoinDesk)Give Your Bitcoin to the Poor, Salvadoran Economist Urges Nayib Bukele (Decrypt) Subscribe to the Best DeFi NewsletterJoin 80k+ crypto innovators.
