Welcome back chain reaction.
Last week, we looked at the immediate future of crypto games as venture capital focused on where to place consumer bets. This week, we’re looking at hardware wallets and the endless journey toward feeling secure in the crypto world.
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no place to hide
Weekly Submission from the TechCrunch Crypto Editor’s Desk Lucas Matney:
The world of cryptocurrency can be a tough, unforgiving place, and while venture capitalists and crypto hedge funds have been happy to bail out institutions, space-immersed consumers sometimes find themselves left out. This week, two very high-profile hacks cost crypto investors millions, but perhaps the smallest and most mysterious reason is that new buyers grab their private keys and call for better.
Putting money anywhere is an exercise of trust, which sometimes makes it funny that the word “untrusted” was a key phrase in crypto-religious doctrines that investors use to win converts. All a user has to do is keep their private key near and dear and they can trust that their money will always be there without having to put any trust in a traditional financial institution. But consumers are discovering some of the fine lines long known for that promise.
This week, thousands of Solana users logged into their crypto wallet apps to discover that all of their funds had disappeared. Many of these users claimed that they had not used the wallets in weeks or months, and ruled out some kind of mass signing of a malicious contract. While this ended up being a modest seven-figure hack, the puzzle was notable. Early on, users were unsure if this was an attack on Solana’s core network or an essential service provider that multiple wallets rely on. Amid all this confusion, portfolios continued to drain, eventually emptying the contents of over 8,000 individual accounts.
Investors in Solana Ecosystem (Network founder dropped some options on Twitter retweet) complained that the media was more focused on exploiting single-digit millions when the Nomad Bridge was hacked for $190 million just the day before. But the nature of the attack was more frightening than the dollar amount.
While users across wallets reported the issue, the issue lay with a vulnerability in the Slope wallet that was – unbeknownst to users – registering their private keys in the backend, leaving them vulnerable to bad actors if they imported the keys to mobile. Application. This saga may have been another breaking point for trusting the system for new users who might have thought their money was safer in the wallet than the central exchange vaults. But longtime cryptocurrency users shrugged their shoulders and pointed out that this was another reason for users They keep their money In the so-called hardware wallets – physical devices that store the user’s private keys and significantly reduce the number of attack vectors for hackers beyond human error.
Now, it’s clear that paying every new user to buy a hardware wallet worth roughly $100 in order to really secure their assets isn’t the ticket to mass adoption in the near term, yet it seems like a rule that people deeper in the space are still clinging to. While a lot of the richest cryptocurrencies hold strategies that promote security above all else, it also appears that a lot of them are investing and promoting projects that emphasize speed and seamless setup at the expense of security. Users may find their way into the bars of flashy consumer apps that they realize that the hurdles to early entry into cryptocurrency were severe for some reason and that wealthy users who buy hole-in-the-wall computers and keep their keys on a piece of paper have a lot of history framing their paranoia.
The chain reaction is back again this week and better than ever! We announced two big capsule changes this week. First of all, we have a new co-host, Jackie MelnykWeekly, join us to talk about the biggest headlines on web3. Jackie is a great friend to us as TechCrunch Reporter +She’s eager to get herbs to help us demystify all things cryptic.
Second, we split our weekly show into two separate episodes: a weekly news segment. Jackie, whose first was released today, and an interview piece hosted by Anita and Lucas. Stay tuned for the latest episode of the interview next week, in which we spoke to Uniswap COO MC Lader.
For this week’s news, we’ve broken down two Notable breakthroughs Which happened in the first two days of the month (Father). We also discussed Robinhood’s latest round of layoffs and a $30 million fine the company paid to New York regulators.
follow the money
Where startup money is moving in the crypto world:
- AO . Laboratories It raised $4.5 million from investors including Balaji Srinivasan and Sandeep Nailwal for gaming platform Spacebar web3.
- web3 “green” platform one of It closed a strategic round of more than $8 million from investors including Amex Ventures.
- Digital Asset Derivatives Company orbiting He raised $4.6 million from Matrixport, Brevan Howard and others.
- encrypted credit protocol DAO . debt She earned $3.5 million for her initial round led by Dragonfly Capital.
- centera cryptocurrency infrastructure startup, has raised $11 million in an initial round from investors including Thrive Capital, Founders Fund and Volt Capital.
- Gary Vaynerchuk’s NFT Project, VeeFriendsscored $50 million in financing led by a16z.
- quasarCosmos-based DeFi protocol has raised $6 million in seed capital from Polychain, Blockchain Capital, and others.
- stadium liveThe fantasy sports startup has received $10 million from its Series A from KB Partners, Union Square Ventures, Dapper Labs, and others.
- Decentralized data warehouse provider place and time It received $10 million for its initial round from investors including Framework Ventures and Digital Currency Group.
- Play to earn fitness app sweetcoin It has completed raising $13 million in funds, including the sale of a private token, from investors including Electric Capital and Jump Crypto.
week in web3
A weekly window on a web3 reporter’s ideas Anita Ramaswamy:
It seems like a good time to talk about security in crypto in light of the recent hacks affecting both the Nomad Cryptographic Bridge and the Solana ecosystem. It is becoming increasingly clear that no matter how many assurances a crypto company makes about how tightly their security standards are, investors should monitor their appearance at all times. The pain can be even more acute for NFT holders, who risk losing millions of dollars in value in one fell swoop if one of their expensive JPEGs gets stolen — just think about what happened to actor Seth Green and his Bored Ape hookup.
There are a few different options for how people can securely store cryptocurrency today, and they all have their trade-offs. The Hot Wallet is connected to the Internet, which makes it vulnerable to outages or connection issues. Furthermore, a lot of hot wallets are operated by central entities such as exchanges that hold users’ keys on their behalf – a transfer of power that many crypto users do not allow. Meanwhile, Cold Wallet is much more secure, but includes outdated and hard-to-use hardware that can be misplaced just as easily as the “Initial Phrase,” a password used to open a crypto wallet.
Upstream founder and CEO Alex Top, Which we had last weekHe says his startup has an easy-to-use solution that allows people to control their keys digitally without having to compromise on security. It is a unique solution that comes at a particularly opportune moment. For details on how it works and why it’s different from what’s already on the market, see my article over here.
TC + . analysis
Here are some cryptocurrency analyzes of this week available on our TC+ subscription service from top correspondents Jacqueline Milink:
Solana’s quick approach to cryptocurrency attracts developers, despite the hiccups
Although the cryptocurrency market isn’t always sunny and flowery, some of the prominent players in the industry, including co-founder Solana Raj Gokal, still have an optimistic view of growth – at least in terms of their own projects. Gokal said that despite Solana’s recent troubles with 8,000 wallets hacked on Tuesday, the Layer 1 blockchain has approximately 15 million to 20 million active addresses per month, some of which are among the highest in the crypto industry. “The question we get asked a lot is how does the market affect the pace of development and the pace of construction?” his answer? It’s not really.
Why education is key to stopping hacks like the $190 million Nomad exploit
After losing nearly $200 million in a security exploit of the Nomad encryption protocol, security experts have insisted that more education and security protocols are needed to protect Web3 communities from hackers. As the cryptocurrency ecosystem becomes larger over time, inter-chain interoperability will continue to grow as well, “at deep levels with a focus on security and decentralization,” Daniel Keeler, co-founder of Flux, told TechCrunch. “However, attention needs to be paid to security, not just development speed, as we push DeFi products to the masses.”
Tiffany and Gucci’s decline in cryptocurrency is a balance between reputation and revenue
Is Crypto Integration by Family Name Brands and Sports Teams Evidence of Increased Use Cases for Digital Assets and Cryptocurrencies – or More of a Marketing Ploy? This week, Tiffany & Co. And Gucci and FC Barcelona are deep in the crypto space through partnerships in the world of digital assets. But do these partnerships really mean anything to the crypto ecosystem? A number of market players shared their thoughts on the upside financial, risk and business side behind these new mergers.
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