DeFi: Scam detection platform Blockaid raises $33MM; SynFutures DEX raises $22MM
Blockaid works with leading non-custodial wallets and marketplaces including MetaMask, Opensea, and 1inch. SynFutures integrates on-chain order book functionalities alongside its AMM.
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Today we highlight the following:
ADOPTION: Web3 Security Firm Blockaid Receives $33MM In Funding (link here)
DEFI: SynFutures Raises $22MM Series B, Bucking ‘Crypto Winter’ (link here)
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ADOPTION: Web3 Security Firm Blockaid Receives $33MM In Funding (link here)
Blockaid has raised $33MM in funding from Ribbit Capital, Variant, Sequoia Capital, Cyberstarts, and Greylock Partners for its blockchain security platform. The startup works with leading non-custodial wallets and marketplaces including MetaMask, Opensea, 1inch, Zerion, and Rainbow to provide an additional layer of security for their users. MetaMask first announced the partnership with Blockaid and Opensea in April as they looked to launch a feature that warns users when interacting with smart contracts known to be scams.
Blockaid offers four core security enhancement features: (1) transaction simulation and validation, (2) dApp scanning, (3) address validation and (4) token validation. Transaction simulation and validation leverages an API to enable users to simulate the transaction without actually executing it, allowing users to then view the outcome of that transaction and whether there are any flags raised. dApp scanning API returns a real-time report of a particular dApp, identifying whether it is malicious or safe, what chain it is operating on, and any other Web3 or network interactions from the site. The data recorded from these two features is leveraged to provide the address and token validation features. All identified malicious addresses or tokens are added to a roster to quickly identify the risks for future users.
Blockaid’s platform has scanned 450MM transactions over the past 3 months, preventing 1.2MM malicious transactions and protecting $500MM in user funds that would otherwise have been stolen. The raise comes at a time when an additional layer of security is needed more than ever for those venturing to take custody of their digital assets. In Q3 2023 $700MM was stolen across 184 incidents, surpassing the $633MM that was lost over the first half of the year.
Now, as the crypto market rallies off the back of BTC ETF anticipation and with the DeFi and GameFi ecosystems (Forge and Shrapnel games both raised this week) having developed significantly since the last bull market, we may begin to see an influx of users opting for self-custody of their digital assets. If so, wallets and marketplaces need to be prepared to protect users and make Web3 as safe and easy to use as the traditional payments infrastructure.
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DEFI: SynFutures Raises $22MM Series B, Bucking ‘Crypto Winter’ (link here)
SynFutures, a decentralized crypto exchange that integrates on-chain order book functionalities alongside its automated market maker, has raised $22MM in a Series B funding round. The round was led by Pantera Capital, with participation from HashKey Capital, SIG DT Investments, and Susquehanna. Notably, Pantera Capital has also recently invested in Brine Fi, which operates its own orderbook-based decentralized exchange (DEX)
SynFutures has introduced an "Oyster automated market maker" (Oyster AMM). An AMM is a DEX mechanism that uses algorithms, such as the constant product formula, to automatically facilitate the trading of digital assets by adjusting asset quantities and prices within a liquidity pool.
In crypto markets, order books have largely been available on centralized exchanges (CEXes) and in a nascent form on alternative L1s like Solana and Sei. Bringing an order book on-chain is computationally intensive and cost-prohibitive (i.e., higher gas fees). Remember, order books require real-time order matching, which involves continuously processing incoming buy and sell orders to find exact matches and execute trades. As a result, AMMs, which assume more static market pricing, are the go-to trading method in DeFi. The opportunity cost is that order books offer lower slippage and tighter spreads, whereas, with AMMs, slippage may be low for small orders, but it rises exponentially with large orders
In the Oyster AMM model, the combination of buy and sell limit orders on single price points with concentrated liquidity ensures that traders receive accurate pricing. Unlike most spot AMM models, Oyster AMM permits native limit orders akin to those that make up central limit order book systems (CLOBs). These limit orders are established at single price points and become irreversible once filled, granting makers confidence in their order status. The main benefits of this approach include price certainty, predictable execution, and reduced impairment loss, as irreversible limit orders are executed at the specified price without being subject to market volatility. Impairment loss refers to the value lost by liquidity providers (LPs) because of diverging asset prices within the pool. In other words, the fees collected often fail to cover the missed opportunity caused by arbitrage trades. For a more detailed technical explanation of Oyster, see here.
DeFi has seen significant developments in the pursuit of capital efficiency. Uniswap V3 introduced the concept of liquidity provision across the entire price curve, enabling users to specify pricing ranges for their participation. Building on this, Uniswap V4 brought in "hooks," allowing developers to enhance existing liquidity pools with their own features. Sei emerged as the first order book-specific L1 blockchain, whereby its native order-matching engine processes independent orders in parallel, leading to efficient trade execution and lower gas fees. There was also Serum, a CLOB on the Solana blockchain, which catalyzed the growth of hybrid DEXes like Raydium.
We like Synfutures' hybrid approach—integrating on-chain order book functionalities alongside its AMM—as it provides a solution for trading many assets, especially "fat-tail" assets like Bitcoin and Ethereum. In such cases, where buy and sell orders overlap, the order book excels by executing trades without slippage. But when liquidity is low, especially with less popular "long-tail" assets, spreads tend to widen, and the price discovery mechanism of AMMs is useful. This is particularly useful for institutions and sophisticated traders.
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Curated Updates
Here are the rest of the updates hitting our radar.
Financial Institutions and Adoption
FTX Is Negotiating With Three Bidders To Restart Crypto Exchange - Bloomberg
World Bank Rolls Out First Digital Bond Issuance On Euroclear - Blockworks
U.S. Senators Set In Motion Bipartisan Proof-of-Reserves Bill - Decrypt
Crypto Lender BlockFi Ends Bankruptcy With A Plan To Repay Customers - Decrypt
SEC Drops Securities Lawsuit Against Ripple Executives - The Defiant
DeFi and Digital Assets
⭐ Triple-A Gets Funding From Peak XV To Help More Businesses Use Crypto - TechCrunch
⭐ Polygon’s New Zk-powered Token Is Live On Ethereum Mainnet - Blockworks
Nocturne Raises $6MM Seed Round To Bring Private Accounts To Ethereum - Yahoo Finance
Worldcoin To Pay Orb Operators In WLD Rather Than USDC - The Block
Crypto Platform Beluga Secures $4MM In Seed Round - Financial IT
dYdX, Decentralized Crypto Exchange, Open Sources ‘V4’ Code For Upcoming Cosmos Chain - CoinDesk
Yearn Overhauls YFI Tokenomics - The Defiant
Uniswap’s New Fee Heightens Token/Equity Tension & Uniswap Visa Card Proposal Is Facing Opposition Among UNI Token Holders - The Defiant
Blockchain Protocols
Arbitrum Orbit Integrates Celestia For Data Availability - Blockworks
Do Rollups Actually Scale Ethereum Or Are We Fooling Ourselves? - Blockworks
NFTs, DAOs and the Metaverse
⭐ Call Of Duty-style Crypto Video Game 'Shrapnel' Raises $20MM - The Block
Friend.tech Hit By Selloff As SocialFi Whales Move To New Bitcoin City - The Defiant
Maison Margiela Debuts First Web3 Gamified Mint - nft now
Getty Images And Candy Digital Launch Paranormal Photography NFTs - nft now
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