It is standard for DeFi platforms to offer over-collateralized loans, in which borrowers deposit more in assets than they withdraw. Some DeFi platforms (like AAVE) support a newer type of loan, the flash loan. When a loanee takes out a flash loan, no collateral is required. This is achievable because flash loans are repaid within the same transaction that they are taken out – a smart contract is used to rapidly perform a series of transactions that result with the loanee ultimately repaying the loan.   Flash loans are atomic, meaning that they are only processed if all included transactions are executed. If they are not, they are rolled back. This enables individuals to borrow massive sums with almost no risk. It is common for borrowers to withdraw tens of thousands, millions, or even tens of millions of dollars at once, albeit for a brief period.   What Are Flash Loans Used For?   Flash loans have three primary uses: trading arbitrage, collateral swapping, and self-liquidation. Here’s an explanation of each:   Trading Arbitrage: Different exchanges may charge different prices for certain assets, opening opportunities to purchase and sell the same assets on different exchanges for a profit. This process is called “trading arbitrage”. While it can be done manually, doing so usually doesn’t yield much of a profit, since the prices of these assets usually only differ by a fractional amount. Flash loans can be used to automatically execute large arbitrage orders, quickly turning a much larger profit.   Collateral Swapping: Changing the base collateral used in DeFi loans can be frustrating and time-consuming, especially for those who diversify their collateralized assets. Flash loans can be used to quickly pay off loans in order to free locked assets, then swap those assets for others.   Self-Liquidation: If a traditional DeFi loan’s base collateral decreases in value too greatly, it will be liquidated. Meaning, collateralized assets will be sold at a discount in order to repay the loan, yielding a loss for the borrower. Flash loans can be used to self-liquidate, fully paying off the loan and withdrawing the collateralized assets without a loss.   What Are The Real Risks of Flash Loans?   Because flash loans are atomic, they are risk-reduced. However, they are not entirely risk-free. Flash loans incur network fees regardless of whether or not they succeed. This exposes loanees to front-running, in which other parties execute identical flash loans while paying higher network fees. Front-ran flash loans are processed first, often leaving original loanees with nothing but network fees to pay.   Most flash loan platforms use the Ethereum Network because it was the first major DeFi-supportive network to gain mass adoption. With Ethereum gas fees as high as they are, front-running has become a major issue for those seeking flash loans.   The use of Ethereum for flash loans poses another serious risk. Ethereum smart contracts are vulnerable to reentrancy attacks, during which hackers withdraw all funds stored within a smart contract. This is done using an external smart contract that withdraws funds multiple times before the withdrawn balance is confirmed.   Ethereum smart contracts are uniquely vulnerable to reentrancy attacks due to Ethereum’s Solidity programming language. Technical jargon aside, Ethereum smart contracts are only secure if coded in a very specific way. Minor mistakes can leave them highly vulnerable. In fact, a single misarranged line of code allowed hackers to steal USD 60 million of Ether in the infamous “The DAO” hack.   How To Avoid Flash Loan Risks   If a reentrancy vulnerability is found within the smart contracts of popular Ethereum-based DeFi platforms, flash loaners could lose millions. Needless to say, many are looking for DeFi solutions outside of the Ethereum Network. One alternative that has been gaining popularity recently is White Whale, the first cryptocurrency project to offer flash loan UST arbitrage within the Terra ecosystem.   Flash loans on Terra are much more secure than flash loans on Ethereum. This is because Terra is built using Cosmos, which powers several other popular projects like Binance Chain. Cosmos’ smart contract engine (CosmWasm) does not allow calls to external smart contracts, and Terra’s smart contract language is far more forgiving than Ethereum’s. This makes White Whale’s arbitrage system immune to reentrancy attacks.   As for frontrunning, it is an inescapable risk. The best course of action is to reduce its likelihood and the damage that it causes. Most front-running attacks are performed on the Ethereum Network by bots, which take advantage of Ethereum’s high and volatile gas prices. Switching to a network with lower and more stable network fees can greatly reduce frontrunning risk.   White Whale offers a sleek and easy web-app interface that makes arbitrage accessible to everyone.

What are the limitations that are preventing DApps’ mainstream adoption and is it possible to make totally free-to-use decentralized applications?

Decentralization of Web3 infrastructure is critical to its success as it gives us back the freedom that we are currently paying for using Web2.

The founder of the $3.4 billion crypto Ponzi scheme Bitconnect has been charged in the United States. “If convicted of all counts, he faces a maximum total penalty of 70 years in prison,” said the U.S. Department of Justice. Bitconnect’s Founder Could Go to Prison for 70 Years The U.S. Department of Justice […]

It looks like cryptocurrency could really help with remittance payments and boost worker salaries in Africa. Study in Africa Shows the Power of Crypto A study was conducted in Nairobi, the capital of Kenya. In this nation – and several other nations of Africa – a new industry referred to as microwork has emerged over...

The post How Crypto Can Help with Remittance Payments in Africa appeared first on Live Bitcoin News.

TribeOne, the world’s first AI-powered DeFi and NFT-funding platform, is hosting a special event ‘The Biggest NFT Giveaway’ where they will giveaway an NFT from the immensely popular Mutant Ape Yacht Club Collection. Users can participate in the giveaway by placing loan requests for an NFT of their choice on TribeOne’s dApp. What is TribeOne? Besides hosting Crypto’s Biggest NFT Giveaway, TribeOne has been offering lending solutions to DeFi users to help them take part in the NFT space. NFT market is a billion-dollar market and is growing at a rapid pace as more creators, traders, and collectors step into it. A platform enabling users to purchase NFTs by providing financing solutions, TribeOne is aiming to make NFT space more accessible. For this purpose, they are collaborating with NFT marketplaces and expanding their NFT offerings. Through TribeOne, users can avail of financial solutions for over 80M+ NFTs listed on the OpenSea marketplace with a 25% down payment and custom payback schedules of up to 12 monthly installments. The host of Crypto’s Biggest NFT Giveaway, TribeOne’s native token $HAKA can be used to pay for installments and also staked on various platforms for additional benefits. The platform is also addressing the difficulties associated with NFT lending services and their new dApp is promising a refined experience for investors seeking easy access to a variety of NFTs. Alongside custom loaning options, TribeOne’s dApp is also making it possible to generate revenue in crypto via NFT flipping, allowing users to take long positions on NFTs and self-liquidating, a unique process based on dipping out of paying their full loan amount and putting the NFT back on its marketplace of origin for sale – resulting profit from future price hikes of the NFT. How to participate in the Crypto’s Biggest  NFT Giveaway by TribeOne? Mutant Ape Yacht Club Collection contains Ape NFTs similar to the Bored Ape Yacht Club Apes, but with a zombie-like mutant theme. Holders of the original 10,000 BAYC NFTs were airdropped a mutant serum vial that allows BAYC NFT holders to “evolve” their bored apes to mutant apes. Bored Ape Yacht Club Collection is among the most prestigious NFT collections in the world. There are numerous celebrities owning NFTs from the BAYC collection, ranging from NBA players like Stephen Curry, Mark Cuban, and Shaquille O’Neil to famous musicians such as DJ Khaled, Post Malone, and Snoop Dogg. The host of the Crypto’s Biggest NFT Giveaway, TribeOne will reward one lucky participant with an NFT from MAYC Collection. “To express our gratitude to our community for their support, we are hosting the most sensational giveaway in the history of crypto and giving a Mutant Ape NFT as a reward to our community,” says Mehdi Suleman, CEO of TribeOne. To participate, users should follow the steps below: Apply for a loan on an NFT of your choice, using the “import functionality” on app.tribeone.io Tweet a screenshot of your loan portfolio with the hashtag #TribegoesApe, tagging @tribeonedefi – and make sure to include your wallet address!  One winner will be randomly selected from all entries received and will be rewarded with a Mutant Ape Yacht Club NFT. TribeOne is the world’s first AI-powered decentralized financial platform backed with RAROC (Risk-Adjusted Returns On Crypto) technology. TribeOne is an NFT, lending, borrowing, saving, and credit risk platform that offers a seamless experience; to all the users through its innovative consumer-centric products. The platform will break barriers in the traditional financial ecosystem and revolutionize the DeFi sphere as a whole. Providing the community with a platform to lend, borrow and invest in crypto assets and NFTs. Therefore, offering an unconventional experience for all.  

A recent media report has shed light on crypto fraud that occurred last year on a dating platform. A 24-year-old Tennessee woman reportedly lost $390,000 when she started dating a person named Hao on Hinge. As per texts seen by the NYT, he persuaded her, “I want to teach you to invest in cryptocurrency when […]

A San Diego-based federal grand jury charged Kumbhani for orchestrating an alleged Ponzi scheme via BitConnect’s “Lending Program” among other allegations.

We can’t allow failures of the past to come creeping back into the DeFi future — let’s stop the flash bots dead in their tracks.

Reading Time: 2 minutes Cyberwarfare is the New Front Line Comodo has taken the security of customers very seriously, whether those customers are at home in the US or abroad. Upon hearing the tragic news coming out of Ukraine, Comodo wishes to extend sympathy to all those suffering in this dark time. Loss of life and injuries for countless...

The post Ukraine Cyber Response appeared first on Comodo News and Internet Security Information.

Reading Time: 2 minutesCyberwarfare is the New Front LineComodo has taken the security of customers very seriously, whether those customers are at...

Reading Time: 2 minutesCyberwarfare is the New Front LineComodo has taken the security of customers very seriously, whether those customers are at...