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Early reports from security firms suggest that an exploit involving the DeFi protocols Aave V1 and Yearn Finance has taken place. The size of the exploit is estimated to be around $10 million, according to PeckShield.

The exploiter received a mix of stablecoins, including DAI, USDC, BUSD, TUSD and USDT, according to LookOnChain.

Aave Chan Initiative founder Marc Zeller’s recent tweets suggest the exploit is focused on the version 1 of Aave. “Aave V1 has been frozen since Dec 2022, so no user can deposit or increase borrow size making issue unlikely but not impossible,” he said. He noted thatthe current size of Aave V1 is $18 million but the project has a safety module of $382.5 million — which could be used to compensate for lost funds.

Zeller added that Aave is researching the situation.

Pseudonymous crypto researcher Samczsun claimed that the Yearn Finance’s version of USDT, called yUSDT, has been broken since it was deployed around three years ago. He said it was “misconfigured to use the Fulcrum iUSDC token instead of the Fulcrum iUSDT token.”

This story is breaking and will be updated.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Roughly eight hours after Ethereum’s Shapella upgrade went live just before 6:30 p.m. EDT last night, more than $1.34 billion in ether is waiting to be withdrawn.

As of this writing, 695,750 ether is currently pending withdrawal, according to the tokens.unlock application.

More than 99,000 ether ($190 million) is estimated to be withdrawn over the next 11 hours — creating an early post-Shapella average of $380 million in ether withdrawn per day.

ETH is being withdrawn on an hourly basis. Source: token.unlocks.app

How much ether is still staked?

Currently, 17.52 million ether is staked — excluding rewards — which accounts for 15.59% of the total ether supply.

Since the Shanghai upgrade went live, the net staking balance has decreased by 63,150 ether ($120 million) — roughly 67,710 ETH has been withdrawn while approximately 4,560 ETH has been deposited.

How vital is Shapella for Ethereum?

Last night’s Shapella hard fork implemented Ethereum Improvement Proposal 4895. Users and validators can now withdraw their staked ether on the network.

The upgrade was released on the mainnet at epoch number 620,9536.

Shapella is a milestone event for Ethereum, following the implementation of EIP-1559 and The Merge. Now that withdrawals have been enabled, the network fully transitioned to a proof-of-stake consensus mechanism.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Ethereum’s Shapella upgrade has gone live.

The upgrade took place just before 6:30 p.m. ET, marking the first major change since The Merge last year.

The hard fork implemented Ethereum Improvement Proposal (EIP) 4895, allowing users and validators to withdraw their staked ether (ETH) on the network. The developers will be monitoring for any potential issues with the upgrade’s completion, as noted in a YouTube stream.

The upgrade was released on the mainnet at epoch number 620,9536. In addition to the withdrawal mechanism, developers have optimized the network’s gas fees for certain transactions, as previously noted by the core team on GitHub.

This event marks a significant change for Ethereum due to its potential impact on the ecosystem, including the unlocking of previously inaccessible funds. Now that withdrawals have been enabled, the network has finally completed its transition to proof-of-stake consensus.

The impact of Ethereum withdrawals being live

With the withdrawal mechanism enabled, Ethereum is expected to provide users with greater asset management flexibility.

However, the release of ETH could result in short-term price fluctuations. Nonetheless, not all of the 18 million ETH ($33 billion) staked on the network will be available for withdrawal all at once due to limits on the amount that can be withdrawn.

The Shapella upgrade has introduced two types of withdrawals for staked ETH: partial and full. Partial withdrawals will automatically distribute ETH to validators, ensuring their balance remains at the necessary 32 ETH to maintain validator status. Full withdrawals, on the other hand, involve shutting down the validator and withdrawing the entire staked balance.

In the short term, the ability to access these previously locked funds could lead to price fluctuations. Yet with ether at a lower price now than when many users staked their funds, it’s possible that these holders wouldn’t want to sell at a loss. But that remains to be seen. 

“Most ETH holders are underwater at the current market price, and most of these holders are committed to Ethereum long-term. We think the majority of withdrawn ETH may be restaked to new validators to compound rewards,” said Alexander Esin, CEO of staking firm P2P.org, about the potential market impact.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bitcoin miner Riot Platforms posted a tongue-in-cheek video and a written statement defending itself after The New York Times published a story about the “enormous carbon pollution” and high electricity costs created by the mining industry.

“We were especially disappointed to read a false and distorted view of our company and our industry in the article published by The NYT. Worse still, The NYT chose to publish the article with information its authors knew to be false and misleading, ignoring the factual information that we provided to them,” the company said in the statement. “Our Bitcoin mining operations do not generate any greenhouse gas emissions, similar to any other data center for Facebook, Amazon or Google.”

The Times estimated that 96% of the power used by Riot comes from fossil fuels and found that in Texas, increased demand from mining resulted in electric bills nearly 5% higher, another $1.8 billion a year. The additional use of power causes as much carbon pollution as adding 3.5 million gas-powered cars to America’s roads. The Times reported that Riot’s mine in Rockdale, Texas, “uses about the same amount of electricity as the nearest 300,000 homes, making it the most power-intensive Bitcoin mining operation in America.”

Riot Platforms, the largest bitcoin miner by market cap, said its data center uses electricity from the Texas grid, which it claimed is the cleanest and most renewable energy-sourced grid in the United States.

In a tongue-in-cheek response video posted on Twitter, a Riot official dressed in a safety gear walks around a semi-grassy area, measuring the low level of CO2 and noting the plants around him consuming. “Rockdale has some of the freshest air I’ve ever breathed,” the person, who appears to be Riot’s head of research Pierre Rochard, says. He then goes inside the mining facility and measures an even lower level of CO2 within the largest bitcoin mining facility in the U.S.

“The science is conclusive,” the bearded man representing Riot said in the video. “The data shows Bitcoin mining does not emit any CO2.”

Twitter users, naturally, piled on, roasting the bitcoin miner for its comically literal interpretation of mining and greenhouse gases. “Somebody please explain to them where carbon emissions come from,” said one.

“Is this a parody?” said another.

The head of public policy at Riot later noted that the video is a “tongue-in-cheek” take on the “flawed & unscientific reporting of the @nytimes.”

“As anyone can see, accurate information was blatantly ignored because it did not fit the narrative the NYT was trying to spin,” the company said in a statement to The Block.

A Cambridge University research project has estimated that Bitcoin miners’ electricity usage has produced 200 million tonnes of CO2 since bitcoin was invented.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.