We Feel You, Vitalik!

TIME Magazine chose Ethereum co-founder Vitalik Buterin for its first-ever NFT issue — and the most influential voice in the crypto space had plenty of two cents to offer.

In the cover story titled “The Prince of Crypto Has Concerns”, Buterin expressed a mix of pride and fear at the creation of the digital currency. 

“Crypto itself has a lot of dystopian potential if implemented wrong,” he said. 

He had a bone to pick with a few of its recent implementations, namely:

🦍 The Bored Ape Yacht Club ($BAYC.NFT): He didn’t seem impressed with the biggest NFT collection Bored Ape Yacht Club ($BAYC.NFT), which is built on the Ethereum blockchain network. He is concerned about the massive displays of wealth, such as Bored Ape NFTs, adding that it has a negative impact on public perception of cryptocurrencies.

“The peril is you have these $3 million monkeys and it becomes a different kind of gambling,” he said.

🌎 ​​Environment: The 28-year-old crypto genius said he fully understands the downside of Ethereum, which has made early adopters rich over the years. The chain’s growth has come at the expense of the environment, though. . 

💸 Money Laundering & scams: He is worried about a number of trends he has observed in the industry, including tax avoidance, money laundering, and scams. However, that’s to be expected – where there is lots of money, there will be bad people.

On the flip, he did have something positive to say – that perhaps resonates with his broader case about the “correct way” to implement crypto. Namely:

⚔️ The Financial Element of the War in Ukraine: He praised how crypto had been used during the Russia-Ukraine war.

“One silver lining of the situation in the last three weeks is that it has reminded a lot of people in the crypto space that ultimately the goal of crypto is not to play games with million-dollar pictures of monkeys, it’s to do things that accomplish meaningful effects in the real world,” Buterin said.

The Ethereum co-founder’s interview is historic – not just for the high-profile it has provided Buterin, nor the legitimacy or credibility that a major publication is lending to the crypto space. Instead, it’s historic for all the things Buterin reviles about the world he has helped create; it’s a critique of cryptocurrency’s hazards, grift, and waste.  Despite that, it’s his hope that Ethereum will do more good than harm to the world. Buterin says he hopes it will become the foundation of sociopolitical development in fair voting systems, urban planning, universal basic income, and public works projects.

But in truth, it might be a while before we get there – after all, Ethereum is still stuck at just 14 transactions per second (TPS) and the broader crypto space can’t hold a candle to Ethereum, nor Bitcoin’s, outsized impact in the world of crypto.

What would crypto be without decentralization? Well, probably kind of pointless. Thanks to blockchain technology, you can send money directly to people – and over the last few years, the blockchain’s promise of decentralized and disintermediated money has brought around things like NFTs, DAOs, DeFi, and other emergent technologies. 

And at the center of these things are Dapps, or decentralized apps.

The term “decentralized application” refers to applications that run on a blockchain network. Although a web application and decentralized application feel the same in terms of the user experience, the difference lies in their backbone or infrastructure. 

Decentralized applications usually have a web-based frontend – which can be accessed through a browser. However, the actual “app” is stored in a distributed manner, with transactions being posted on a blockchain. Generally,  dApps use governance tokens to let engaged users guide the future of an app.

Most dApps are built on the Ethereum blockchain network. Solana and Polkadot are also popular among developers. Many of these dApps are “protocols”, another phrase for DeFi applications.

Advantages

• DApps are “censorship-free.” Controlling blockchain networks is difficult, and expensive, for governments or powerful companies.
• As dApps rely on a peer-to-peer system, they can continue to work even if the network is down.
• Transactions between anonymous parties can be completed using smart contracts rather than relying on a central authority.
• Since dApps are built on the blockchain network, it utilizes cryptographic tokens to secure the network.

In spite of the promise that DApps make, they’re not without their flaws.

• Due to their reliance on open-source smart contracts, many dApps are vulnerable to hacks. Last year, Poly Network, a DeFi platform, lost $600 million after a hack. 
• It’s still in the early stage. User experience isn’t a strong point of blockchain applications, nor dApps, which have turned many less-experienced users away.

Future of DApps

As the decentralized finance (DeFi) markets expand in scope and adoption, dApps are playing a key role in reaching new audiences. They provide user interfaces that mimic conventional web applications while incorporating blockchain functionality. To put it differently, dApps are a way of expanding the use of the internet through blockchain technology. DApps are growing rapidly and the trend is only beginning. In the very near future, we will be using decentralized applications for social media, food delivery services, or ride services.

Cashio ($CASH), a Solana stablecoin protocol, suffered an exploit that caused its flagship stablecoin to collapse. The price of dollar-pegged stablecoin, $CASH, dropped from $1 to $0.00005 after hackers took advantage of an “infinite mint glitch.” DeFi Llama estimated that $28 million in value has been siphoned from Cashio’s protocol because of this exploit.

On Twitter, developer 0xGhostChain warned people “not to mint any CASH,” adding that the team “are investigating the issue and we believe we have found the root cause. Please withdraw your funds from pools. We will publish a postmortem ASAP.”

According to Solscan, a scanning tool that tracks all of Solana, using the decentralized exchange Saber, the attacker minted two billion $CASH stablecoins and then traded them for other paired assets (mostly other stablecoins). In response to the incident, Saber halted its $CASH liquidity pools, and the token lost its entire value.

Cashio Dollar was launched in November 2021. Anyone can generate $CASH by first depositing Saber $USDT.X– $USD.X liquidity provider tokens. In this incident, the hacker found a vulnerability that allowed them to mint unlimited amounts of $CASH without having the necessary backing.

This isn’t the first time a DeFi protocol has been hacked for millions of dollars through an “infinite mint” bug. Last year, attackers took about $250,000 worth of stablecoins from a liquidity pool and drove the price of stablecoin SafeDollar’s coin to zero.