The Wintermute Hack and BitDAO - An analysis
Sep 20, 2022
The Wintermute Hack and BitDAO - An analysis
Sep 20, 2022
The Wintermute Hack
Wintermute is a company that provides liquidity to various exchanges, including Coinbase and Binance. Recently, it suffered a hack in which $160 million was stolen from its decentralized finance (DeFi) operations. The hack occurred through the use of a tool called Profanity, which allows users to generate vanity addresses with personalized human-readable messages. The hacker was able to recover private keys from any vanity address generated with Profanity and used them to drain Wintermute's vault.
Despite the significant loss, Wintermute's CEO has stated that the company remains solvent, with $320 million in equity remaining. In the wake of the hack, Wintermute's website experienced an increase in organic searches, overall rank, unique visitors, and average visit duration. It remains to be seen whether this increased engagement will translate into more users and protocols discovering Wintermute, or whether there will be a loss of trust that causes users to leave the platform.
In the short term, Wintermute's operations will likely face disruptions as the company works to return to normal. The CEO's quick and transparent communication about the hack, including a clear explanation of what happened and the financial details of the company, has been commended. It will be interesting to see how Wintermute recovers from the hack in the long term and whether the increased engagement and potential new users will outweigh the financial loss.
BitDAO
BitDAO is a decentralized autonomous organization (DAO) focused on funding projects in the Web 3.0 space that support the growth of open finance and decentralized, tokenized economies. It is governed by its $BIT token holders, who use the token to vote on investment proposals and allocate funds from the DAO treasury. The BitDAO treasury currently has around $2.3 billion in assets, which are funded through pledged contributions from Bybit, specialized autonomous entities, token swaps and deals, and yield strategies.
BitDAO was created by Bybit, a cryptocurrency exchange, and launched in August 2021 after raising $230 million in a June 2021 funding round featuring investors such as Peter Thiel, Founders Fund, and Pantera Capital. In August 2021, it raised an additional $365 million on SushiSwap's MISO platform, selling BIT tokens to over 9,000 people.
BitDAO's investment portfolio includes individual projects such as Paradigm and Africa DAO, as well as other DAOs like G7 DAO, zkDAO, Edu DAO, and Pleasr DAO. It also engages in token swaps, such as exchanging BIT for FTT. The DAO treasury has grown significantly in the past year, with a significant portion of its funding coming from Bybit, which directs 2.5 billion of its trading revenue toward the BitDAO treasury.
There are concerns about the centralization and regulatory risk associated with the fact that Bybit controls 60% of the supply of BIT tokens and provides a significant portion of the funding for the BitDAO treasury. Holding BIT tokens may also be seen as an indirect call option on Bybit's success.
Overall, BitDAO allows anyone to participate as a limited partner in a crypto infrastructure venture fund, which is typically a privilege reserved for wealthy and elite institutions. It remains to be seen if BIT token holders will see similar returns as traditional VC LPs.
Sources:
https://messari.io/asset/bitdao/profile…
https://thedefiant.io/bitdao-thiel-pantera-treasury…
https://en.whotwi.com/wintermute_t/followers
https://rekt.news/wintermute-rekt-2/
https://www.semrush.com/analytics/traffic/overview/?q=wintermute.com
https://cointelegraph.com/news/profanity-tool-vulnerability-drains-3-3m-despite-1inch-warning
The Wintermute Hack
Wintermute is a company that provides liquidity to various exchanges, including Coinbase and Binance. Recently, it suffered a hack in which $160 million was stolen from its decentralized finance (DeFi) operations. The hack occurred through the use of a tool called Profanity, which allows users to generate vanity addresses with personalized human-readable messages. The hacker was able to recover private keys from any vanity address generated with Profanity and used them to drain Wintermute's vault.
Despite the significant loss, Wintermute's CEO has stated that the company remains solvent, with $320 million in equity remaining. In the wake of the hack, Wintermute's website experienced an increase in organic searches, overall rank, unique visitors, and average visit duration. It remains to be seen whether this increased engagement will translate into more users and protocols discovering Wintermute, or whether there will be a loss of trust that causes users to leave the platform.
In the short term, Wintermute's operations will likely face disruptions as the company works to return to normal. The CEO's quick and transparent communication about the hack, including a clear explanation of what happened and the financial details of the company, has been commended. It will be interesting to see how Wintermute recovers from the hack in the long term and whether the increased engagement and potential new users will outweigh the financial loss.
BitDAO
BitDAO is a decentralized autonomous organization (DAO) focused on funding projects in the Web 3.0 space that support the growth of open finance and decentralized, tokenized economies. It is governed by its $BIT token holders, who use the token to vote on investment proposals and allocate funds from the DAO treasury. The BitDAO treasury currently has around $2.3 billion in assets, which are funded through pledged contributions from Bybit, specialized autonomous entities, token swaps and deals, and yield strategies.
BitDAO was created by Bybit, a cryptocurrency exchange, and launched in August 2021 after raising $230 million in a June 2021 funding round featuring investors such as Peter Thiel, Founders Fund, and Pantera Capital. In August 2021, it raised an additional $365 million on SushiSwap's MISO platform, selling BIT tokens to over 9,000 people.
BitDAO's investment portfolio includes individual projects such as Paradigm and Africa DAO, as well as other DAOs like G7 DAO, zkDAO, Edu DAO, and Pleasr DAO. It also engages in token swaps, such as exchanging BIT for FTT. The DAO treasury has grown significantly in the past year, with a significant portion of its funding coming from Bybit, which directs 2.5 billion of its trading revenue toward the BitDAO treasury.
There are concerns about the centralization and regulatory risk associated with the fact that Bybit controls 60% of the supply of BIT tokens and provides a significant portion of the funding for the BitDAO treasury. Holding BIT tokens may also be seen as an indirect call option on Bybit's success.
Overall, BitDAO allows anyone to participate as a limited partner in a crypto infrastructure venture fund, which is typically a privilege reserved for wealthy and elite institutions. It remains to be seen if BIT token holders will see similar returns as traditional VC LPs.
Sources:
https://messari.io/asset/bitdao/profile…
https://thedefiant.io/bitdao-thiel-pantera-treasury…
https://en.whotwi.com/wintermute_t/followers
https://rekt.news/wintermute-rekt-2/
https://www.semrush.com/analytics/traffic/overview/?q=wintermute.com
https://cointelegraph.com/news/profanity-tool-vulnerability-drains-3-3m-despite-1inch-warning
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