The most forgetful failures of the crypto space in 2021

2021 will be one of the most exciting years for blockchain technology and cryptocurrencies as it will be adopted by both users and mainstream institutions. From governments like El Salvador to large corporations like Tesla, Goldman Sachs, Bank of America and Morgan Stanley, many organizations have gone one step further to become part of the ecosystem.

Even so, crypto and blockchain are still having major setbacks in 2021 that are changing the sentiment of crypto investors and the entire community.

SEC rejects VanEck’s Bitcoin Spot ETF

After the US Securities and Exchange Commission approved the ProShares Bitcoin Futures futures ETF in early October, Bitcoin rose to a new high of $ 68,789.63 on November 10, ProShares Bitcoin Strategy ETF, code BITO, yes largest release date Compared to any ETF in terms of natural volume, this shows how high the expectations were for a Bitcoin ETF.

On November 12, the financial regulators spoiled the fun by rejecting VanEck’s offer of a Bitcoin spot ETF, which caused the price of the leading cryptocurrency to start its downtrend.

Jan Van Eck, CEO of VanEck, was not satisfied with the cancellation.

“We’re disappointed with today’s SEC update because we didn’t approve Bitcoin EFT. We believe that investors should be able to access BTC through a managed fund and that an ETF structure without futures is an optimal approach. ”

The fight for the SEC nomination for a spot ETF has been going on for more than eight years and goes back to July 2013, when Cameron and Tyler Winklevoss tried to set up the “Winklevoss Bitcoin Trust”. Although it has been a long time and the narrative about cryptocurrencies has changed, the SEC has yet to approve Bitcoin spot ETFs.

Ethereum: gas fees are out of control

The Ethereum network underwent a remarkable upgrade in 2021: hard fork in London, Put ETH on a deflationary track with Ethereum Improvement Proposal (EIP) 1559. So far, 1.244 million ETH have been lost burned, valued at more than $ 4.96 billion.

In addition to the burning mechanism, Ethereum gas fees also increased due to the increasing use of DeFi protocols on the blockchain and the proliferation of NFT tokens. Gas charges continue to exceed 100 gwei and this will continue until 2022. “Gwei” is the smallest unit of ether, equal to 0.00000001 ETH.

Ethereum 7-day gas fee | Source: Cointelegraph

P.hehe Gas in the network reached an annual high of 373.8 gwei on February 23. Although it appears to have come under control between May and August, there have also been some cases of spikes that are very uncommon, especially for retail investors in the DeFi market. This has also led some DeFi protocols and investors to choose other blockchain networks like Binance Smart Chain, Solana, Polygon, etc.

To solve this problem, Vitalik Buterin, co-founder of Ethereum, recommend Upgrades, EIP 4448 and EIP 4490, serve as a temporary solution with a data sharding method that lowers the cost of zk rollups on the blockchain.

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However, it remains to be seen whether the proposal will break through the governance structure of the network and how effective these upgrades will actually be at cutting gas.

Solana: outages and DDoS attacks

Solana (SOL) was founded in April 2019 and has quickly grown to become one of the top blockchains with a total value (TVL) of nearly $ 12 billion. SOL has increased almost 130 times from its current price of around $ 190. On November 1st, the token hit an all-time high of $ 260.06.

However, at 1:46 p.m. local time on December 4, the Solana network went out and this situation lasted for nearly six hours. The network’s mainnet beta cluster stopped producing blocks at position 53,180,900. This prevented new transactions from being confirmed on the blockchain. This outage has resulted in Solana receiving a lot of criticism from vendors and developers.

Solana network TLV | Source: Cointelegraph

Scott Lewis, co-founder of DeFi Pulse, was one of the critics, citing Serum’s order book data to demonstrate the lack of “real customer orders”.

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“No new offers for two hours?”

This isn’t the first incident Solana has seen this year. In September, Network interruption 17 Hours between September 14th and 15th due to a distributed denial of service (DDoS) attack against the original decentralized exchange of Grape Protocol on September 14th traffic to take it offline.

Shortly after the December 4th outage, the network was hit again by a DDoS attack on December 9th, temporarily overloading the network even though it remained online during the attack.

While some blame the Solana network’s design for being too simple and its use of the proof-of-history consensus that makes it vulnerable to attack, developers still seem to believe in its potential.

Following the DDoS attack, Solana’s on-chain development efforts saw an increase in daily GitHub submissions. In fact, the network overtook Polkadot and Cardano to become the most advanced blockchain network between November 12 and December 13.

Binance Smart Chain: security exploit

Binance Smart Chain (BSC) is a parallel chain to Binance Chain, both blockchains that are developed and managed by the Binance cryptocurrency exchange. BSC first went live in April 2020 and went live in August 2020.

Since then, the network has grown and after Ethereum it is the second most widely used blockchain for the provision of decentralized applications. According to DefiLlama, the TVL protocols are in DeFi on the current network was standing at nearly $ 17 billion. TVL hit an all-time high of $ 31.72 billion on May 10.

However, the network and the protocols running on it have been vulnerable to exploits since its inception. Here is a list of some of the DeFi protocols on BSC that have fallen victim to hacks and attack vulnerabilities:

• Pancake bunny: Loss of $ 200 Million from Flash Loan (Fast Loan) Attack
• Spartan Protocol: $ 30 million mining attack
• Uranium funding: $ 50 million stolen
• Meerkat finances: Rugpull (pulling the carpet) resulted in a loss of $ 31 million
• pnetwork: Hacked, $ 12.7 million BTC loss
• Stuck finances: Flash loan lost $ 3 million
• BurgerSwap: Exploiting a vulnerability costs $ 7.2 million
• Belt financing: Lost $ 6.3 million

While the above list is not exhaustive, it can also indicate that hacks and security breaches caused hundreds of millions of dollars of damage within 18 months of the network launch. In addition to exploiting security loopholes, there are some phishing attacks on the decentralized exchange PancakeSwap with Cream Finance.

However, the Binance ecosystem is trying to solve this problem. The latest effort is the launch of Project Shield, a security screening program that gives users an extra layer of protection when attempting to access both BEP-20 and ERC-20 tokens on an exchange.

What to expect

Despite the risks and issues that will disappoint the crypto community in 2021, it is clear that the number of people using crypto is higher than ever.

With innovations like NFT, GameFi and Metaverse, the crypto space is opening up to bigger things in the worlds of art, games, music and finance. Hopefully these industries will get better with separate innovations.

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