Will DeFi Survive This?
Bankless
Bankless
4.7 • 1.2K Ratings
🗓️ 2 August 2023
⏱️ 63 minutes
🧾️ Download transcript
Summary
A special mid-week episode is in order as we discus the string of events that led to one of the largest risks DeFi has faced in a long time.
What happened to Curve, what's at risk, and what can we learn from all of this?
*CORRECTION: The address that exploited the CRV/ETH pool controls .082% of the circulating supply, not the 8% accidentally mentioned in this segment.
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TIMESTAMPS
0:00 Intro
7:23 EVM Exploit Explained
13:21 MEV Bot Sidequest
18:21 CRV Contagion
23:43 CORRECTION: SEE SHOWNOTES*
31:43 The OTC Bailout
35:43 Buying Mansions On Leverage
41:43 Second Order Risks
47:43 Who is to Blame?
53:43 Are we in the Clear?
56:43 Lessons Learned
1:01:43 Risks and Disclaimers
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RESOURCES
DeFi's Contagion Curveball
https://www.bankless.com/defi-contagion-curveball
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Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.
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Transcript
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| 0:00.0 | Thankless Nation, we have a bonus episode for you today because I think this requires |
| 0:10.6 | someone to a mid-week look at what is going on in crypto, specifically what is going |
| 0:16.1 | on with DeFi, David, so much going on with the curve protocol. |
| 0:19.8 | I know you are fresh back from climbing mountains, but I need your help with this. |
| 0:24.9 | Do you need doonie calls? |
| 0:25.9 | Yes. |
| 0:26.9 | I need your help to understand what happened. |
| 0:28.8 | Can you give us the TLDR of what we are going to cover in today's episode? |
| 0:32.2 | Yes, so there has been a series of events which have all one has led to another. |
| 0:36.9 | There is a coding language called Viper, which is an alternative to solidity, so it is |
| 0:41.8 | an Ethereum coding language that had an exploit in the actual coding language that affected |
| 0:48.5 | a certain number of DeFi protocols across Ethereum, especially in most importantly, Curve. |
| 0:54.7 | Curve, which is a systemic, I would call a systemically important DeFi protocol, has |
| 0:58.8 | had some very important pools, Curve pools drained, and that has led and put pressure |
| 1:05.3 | on the CRV tokens, specifically because the founder of Curve, Michael, has put up a bunch |
| 1:11.6 | of CRV tokens as collateral across DeFi, so just to recap, a coding language had an exploit |
| 1:19.8 | in it, which led to curve liquidations, and because the founder of Curve had so much |
| 1:25.1 | CRV tokens as collateral across lending protocols, we are potentially on the cusp of a liquidation, |
| 1:33.4 | cascading liquidations of the CRV token across DeFi, which might put holes into the balance |
| 1:41.3 | sheets of many of these DeFi lending protocols. |
| 1:43.4 | Did you catch that? |
| 1:44.4 | I did, and I'm so glad, we call David down from the mountains in order to help us with |
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