Curve Finance to compensate users following another DeFi security breach, and ConsenSys introduces Layer 2 solution: Finance Reimagined

Welcome to Finance Redefined, your weekly source for crucial insights into decentralized finance (DeFi) — a newsletter designed to provide you with the most important updates from the previous week.

More than two weeks following the multiple pool exploits at Curve Finance, the DeFi protocol has reassured the victims of the hack that it is evaluating each affected user for compensation. This announcement follows the return of 73% of the misappropriated funds by the hacker.

The DeFi landscape moved past the Curve incident only to encounter another series of exploits this past week, with Zunami Protocol experiencing attacks on its stablecoin pools, leading to an estimated loss exceeding $2 million. Nevertheless, the week also brought positive news as ConsenSys successfully launched its zero-knowledge Ethereum Virtual Machine (zkEVM), Linea, with $26 million worth of Ether (ETH) bridged.

In another update, the Fantom-based decentralized exchange SpiritSwap was saved from imminent closure through a community decision.

Curve Finance commits to compensating users after $62 million breach

Curve Finance has officially declared its commitment to reimburse users affected by its recent breach, which resulted in losses amounting to $62 million. According to a post on X (formerly Twitter) from its official account, ongoing investigations are making headway, with around 79% of the funds successfully retrieved. The platform also indicated that it would evaluate each affected user for reimbursement.

This evaluation aims to guarantee a fair distribution of resources. The incident on July 30 involved malicious individuals exploiting weaknesses within the release history of Curve Finance’s Vyper compiler.

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Zunami Protocol confirms attack on stablecoin pools, estimating $2.1 million loss

The decentralized finance protocol Zunami Protocol has warned users against purchasing any of its Zunami Ether (zETH) or Zunami USD (UZD) stablecoins following an attack on its “zStables” pools on Curve Finance.

On Aug. 13, Zunami confirmed via X that its stablecoin pools had been attacked, noting that collateral remains secure as it initiates an investigation into the potential exploit.

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$26 million ETH bridged: ConsenSys finalizes public launch of zkEVM Linea

ConsenSys has finalized the launch of its Ethereum scaling rollup Linea, bringing on board over 150 partners and bridging more than $26 million in ETH to date.

Linea became operational with select partners onboarded to the alpha mainnet in July 2023, enabling developers to transition existing decentralized applications (DApps) from Ethereum’s mainnet or other scaling solutions. The zkEVM serves as a layer-2 scaling solution that offers reduced transaction costs and enhanced throughput for DApps within the Ethereum ecosystem.

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Fantom DEX saved at the last moment following a planned closure

SpiritSwap, a decentralized exchange (DEX) on Fantom, will not proceed with its planned closure in September after its treasury funds were immobilized on the troubled cross-chain protocol Multichain. In an Aug. 16 community vote, SpiritSwap users approved a resolution to transfer the project to Power, a fellow nonfungible token platform and DEX based on Fantom. Power will allocate 200,000 USD Coin (USDC) into the SpiritSwap treasury.

On Aug. 9, SpiritSwap announced it would cease operations by Sept. 1 if it could not secure a team to take over after the Multichain exploit depleted its entire treasury. Notably, Power was also affected by the Multichain incident but only incurred “small” losses, as its treasury assets were not bridged to Multichain.

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DeFi market overview

Despite the recent market volatility, the total value locked in DeFi protocols experienced a bullish increase over the past week. Data from Cointelegraph Markets Pro and TradingView indicates that the top 100 DeFi tokens by market capitalization had a positive week; however, the late Thursday decline erased the gains, leaving most tokens trading in the red on the weekly charts. The total value locked in DeFi protocols reached $49.8 billion for the first time in five months.

Thank you for reading our summary of this week’s most significant DeFi developments. Join us next Friday for more stories, insights, and education regarding this rapidly evolving space.