This report synthesizes key findings from AI Web3 security firm Cyvers’ comprehensive analysis of security incidents in Q1 2024, highlighting emerging threats and underscoring the importance of resilience within the ecosystem.

Executive Summary

Amid the continuous advancement of DeFi, DePIN (Decentralized Physical Infrastructure Networks), RWAs (Real World Assets), and other blockchain-based applications, we’ve observed a corresponding escalation in sophisticated security threats. Attack vectors have diversified, with code vulnerabilities leading to substantial financial repercussions and access control breaches proving exceptionally costly.

These trends signal an urgent need for enhanced security measures and greater vigilance within the Web3 community.

Cyvers, in partnership with BeInCrypto, has demonstrated its commitment to this cause by pioneering real-time threat detection and AI-driven security solutions. The goal is to provide rapid and precise identification of threats, offering proactive mitigation and safeguarding assets across the blockchain.

These threats deploy a range of attack vectors—from smart contract vulnerabilities to phishing scams—aiming to exploit the open and interconnected nature of Web3 technologies. In response to these challenges, the Web3 community has rallied, emphasizing the importance of security as a foundational element of the ecosystem’s infrastructure.

Key Security Trends and Statistics

The Total Stolen Value (TSV) in the first quarter of 2024 is approximately $739.7 million. January witnessed the highest number of attacks (27), followed by March (21), and February (18). Despite having the least number of attacks, February had a high financial impact, with around $405.3 million lost to attacks.

The average loss per attack calculated to be approximately $6.7 million, indicating the high stakes involved in Web3 security.

The most common attack vector was Code Vulnerabilities, with 37 instances, resulting in a loss of about $165.9 million. Though less prevalent, Access Control attacks were far more costly, resulting in a loss of about $573.8 million.

There were 10 instances where hacks were exclusively detected by Cyvers, which underlines the importance of proactive security measures, sophisticated algorithms, and continuous optimization.

Three of these instances were among the Top 10 Hacks of Q1 2024.

PlayDapp’s Security Breach Analysis

In February 2024, prominent gaming and NFT platform PlayDapp faced a severe security challenge when it suffered two consecutive exploits leading to an unprecedented minting of PLA tokens. Initially, on February 9, an unauthorized entity minted 200 million PLA tokens, valued at roughly $36.5 million.

A few days later, on February 12, the same entity reportedly minted an additional 1.79 billion PLA tokens, equating to a staggering $253.9 million. These exploits collectively resulted in a total loss of about $290 million.

The primary cause of the breach was identified as a smart contract vulnerability, which allowed the attacker to mint tokens without the necessary authority. The repercussions were immediate and severe, as the market price for PLA tokens plummeted due to the sudden influx of unauthorized tokens. PlayDapp’s team attempted to negotiate with the attacker, offering a $1 million bounty for the return of the stolen funds, but to no avail.

The security measures taken post-incident included the pausing of the PLA smart contract and the initiation of a contract migration based on pre-exploit snapshots of holder balances. PlayDapp’s prompt response to pause the contract and engage with law enforcement and blockchain forensic firms demonstrated a commitment to security and transparency. The efforts to liaise with exchanges and track the stolen funds were ongoing, with strategies to mitigate the impact and prevent such incidents in the future being actively discussed.

Read more: AI for Smart Contract Audits: Quick Solution or Risky Business?

The PlayDapp incident serves as a cautionary tale about the vulnerabilities inherent in smart contracts, particularly regarding the minting and management of tokens. Indeed, the lessons from the PlayDapp incident are manifold: the absolute necessity of continual security vigilance, the importance of proactive and reactive security measures, and the ever-present need for community education on security best practices.

Regulatory Changes on Web3 Security

In Q1 2024, the global digital asset landscape saw notable regulatory advancements which have had a considerable impact on Web3 security.

PwC’s Global Crypto Regulatory Report emphasizes the ongoing evolution in digital asset regulation, suggesting that while substantial progress was made in 2023, the industry continues to face a significant regulatory workload. Such developments are crucial as they provide a structured framework for operations, enhance global regulatory policies, and help establish global prudential standards, potentially influencing the EU’s Markets in Crypto-Assets regulation and other international policies.

Moreover, after the high-profile collapse of FTX, regulatory bodies have been prompted to take a more stringent approach to digital asset rules to better protect the investing public. The US Securities and Exchange Commission (SEC), for instance, had planned to release new rules governing digital asset exchanges and offerings. These rules were expected to provide comprehensive regulations for digital asset offerings, alongside guidelines for digital asset exchanges.

This response to past events demonstrates a clear intent by regulatory bodies to improve oversight and prevent similar occurrences in the future.

These regulations aim not only to safeguard investors but also to ensure the orderly functioning of digital asset markets. For Cyvers, these developments could serve as an opportunity to contribute to regulatory discussions, leveraging its expertise to guide the formulation of policies that balance the need for security with the potential for innovation in the Web3 space.

As regulations evolve, Cyvers and BeInCrypto’s ability to provide compliance-aligned security services becomes ever more critical. Q1 2024 has therefore been a pivotal time for Web3 security, marked by regulatory bodies around the world taking lessons from past events to fortify the industry’s defenses and establish a secure foundation for the burgeoning digital economy.

Recommendations for Enhancing Web3 Security

In the pursuit of a fortified Web3 landscape, Cyvers explained to BeInCrypto strategic ways to enhance security postures for various stakeholders within the ecosystem:

For Projects:

• Smart Contract Auditing: Ensure that smart contracts undergo thorough securityaudits by reputable firms. Regularly re-audit after major updates or changes in thecontract’s logic. Check out our recommended auditors here.
• Incident Response Planning: Develop an incident response plan tailored to potentialWeb3-specific breaches, detailing immediate actions, communication protocols, andcontingency measures.
• Security Modules Integration: Implement real-time threat detection and securitymodules, like those provided by Cyvers, to continually monitor and protect against malicious activity.

For Developers:

• Security-First Design: Embrace a security-first approach when designing systems,prioritizing security in every phase of development.
• Continuous Education: Stay informed about the latest security research,vulnerabilities, and protection strategies. Engage with the community to shareknowledge and best practices.
• Decentralization of Control: Avoid single points of failure in your systems. Use multi-signature wallets and distributed decision-making for critical operations.

For Investors:

• Due Diligence: Exercise due diligence by reviewing the security practices of projectsbefore investing. Check for audit reports, security affiliations, and incident histories.
• Diversify Holdings: Protect your portfolio from targeted breaches by diversifyingyour holdings across various platforms and wallets.
• Use Trusted Platforms: Engage with platforms that have a proven track record ofsecurity and that implement the latest security measures.

For Users:

• Secure Wallet Practices: Utilize hardware wallets for significant holdings, practicesafe storage of private keys, and employ multi-factor authentication.
• Beware of Phishing: Educate yourself on common phishing tactics within the Web3 space. Verify URLs, double-check smart contract interactions, and be cautious withunsolicited requests.
• Stay Updated: Regularly update your software to the latest versions, ensuring that security patches are applied.

Read more: Identifying & Exploring Risk on DeFi Lending Protocols

By adhering to these recommendations, stakeholders across the Web3 ecosystem can significantly reduce their risk profile and contribute to creating a secure and resilient digital environment. It is through collective vigilance and proactive measures that we can navigate the Web3 ecosystem with safety and confidence.

The post $739.7 Million in Crypto Hacked in Q1 2024: Cyvers appeared first on BeInCrypto.

Contrary to popular belief, the legal environment shaping the future of crypto is far from a death sentence. Instead, it signifies a complex dance between innovation and compliance

Hefty Taxes May Kill Crypto Innovation

With election year dynamics slowing legislative progress, the industry is left yearning for bills that could provide a clear direction. Although industry leaders remain optimistic about the future, stressing the importance of blockchain companies preparing to comply with eventual laws, the Biden administration aims to introduce a tax targeting Bitcoin and crypto miners.

This move has sparked widespread concern among industry investors, fearing it could cripple the growing sector. The US Treasury Department’s 2025 revenue proposal outlines a 30% tax on the electricity costs incurred by crypto miners. This is a move that could have seismic implications for the industry.

“Any firm using computing resources, whether owned by the firm or leased from others, to mine digital assets would be subject to an excise tax equal to 30% of the costs of electricity used in digital asset mining,” the US Treasury Department wrote.

Read more: How to Reduce Your Crypto Tax Liability: A Comprehensive Guide

This tax, dubbed the digital asset mining energy tax (DAME), is seen by many as a death knell for crypto mining. Critics argue that such a tax would stifle innovation and force mining operations to relocate. This is a similar scenario to the exodus witnessed in China in 2021.

Therefore, the United States could see its dominance wane as miners seek more hospitable environments.

“A proposed 30% punitive tax on digital asset mining would destroy any foothold the industry has in America,” US Senator Cynthia Lummis said.

As the debate continues, the broader implications for the US economy and its position in the crypto market remain uncertain. The Biden administration’s proposal signals a cautious approach to the crypto industry. With Bitcoin and crypto valuations experiencing a resurgence, this regulatory conundrum reflects a pivotal moment for the blockchain industry.

Still, Joshua Kershner, General Counsel at Helium Foundation, told BeInCrypto that the industry’s future does not hinge on the operational intricacies of centralized platforms. Instead, it relies on the development of blockchain applications with tangible, value-adding use cases.

Adhering to Crypto Regulatory Guides

Despite the legal scrutiny on centralized entities, other projects extending beyond token trading or mining seem undeterred, pointing to a broader, more resilient blockchain ecosystem.

“The blockchain industry is far more interesting than just Binance and Coinbase and other centralized exchanges.  While they play an important role in the ecosystem, the future of the industry will be defined not by trading tokens, but by real use cases that create value,” Kershner said.

The focus of regulatory actions, such as the CFTC’s settlement with Binance, on specific malpractices highlights that not all facets of the blockchain sector are under siege. According to Kershner, it is a reminder of the necessity for crypto companies to adhere to stringent regulatory requirements. These include sanctions compliance, anti-money laundering measures, and KYC protocols.

Kershner emphasized the distinct nature of blockchain projects, particularly their immutable characteristics, which demand a compliance-first approach from inception. Unlike Web2 entities that may retrofit legal frameworks post-launch, blockchain initiatives require integral compliance foresight, reflecting the sector’s unique regulatory challenges.

“With Web3, it is critical to have experienced in-house counsel early on working with the engineering and product teams to ensure that products are built with compliance in mind before they are released with immutable features. It is much harder to put regulatory band-aids on a blockchain project than for a typical Web2 company,” Kershner added.

Moreover, the pervasiveness of insider trading within Web3 mirrors traditional industries, affirming the universality of legal standards across technological paradigms. This points to a broader need for legislative clarity and adaptability to accommodate the distinct attributes of blockchain technology.

Kershner advised the new companies entering the crypto market to “lawyer up” in light of the current regulatory environment.

“The need for innovation and growth is not in conflict with regulatory compliance and investor protection. The issue facing the industry is that regulatory uncertainty makes compliance difficult or impossible, especially on a global scale. Hire in-house counsel early to provide strategic advice as you build. Acknowledge that the industry is still new and that things will change rapidly over the next few years,” Kershner concluded.

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

Ultimately, the drive for regulatory clarity and the necessity of compliance reflect a shared vision for a future where blockchain technology can flourish responsibly and innovatively within a supportive legal framework. The question is not whether American regulators are trying to kill crypto but how they, alongside industry stakeholders, can collaboratively nurture its growth and integration into the fabric of global finance and technology.

The post The Real Agenda: Why Joe Biden Targets Crypto Now appeared first on BeInCrypto.

Still, invaluable insights can be learned into what VCs look for in crypto startups. These include outlining a blueprint for entrepreneurs to refine their approach, focusing on timing, clarity, market understanding, team composition, and community engagement.

Building the Perfect Pitch

Danilo Carlucci, Founder and CEO of Morningstar Ventures, told BeInCrypto that timing is critical. Startups should engage VCs only when they have a Proof of Concept (PoC) that demonstrates their product’s or service’s feasibility and potential. This stage is crucial for eliciting initial interest and feedback from investors.

Then, utilizing this feedback to refine the Minimum Viable Product (MVP) allows startups to showcase tangible achievements and metrics, making a stronger case for investment. According to Carlucci, proper timing and iteration of these stages, evidenced by quantifiable success metrics, significantly impact the project’s Future Diluted Valuation (FDV).

“Timing is such a difficult thing to get perfect. But if start-ups time their project stages correctly and iterate them, they can raise more funds, ultimately impacting their FDV,” Carlucci said.

He also emphasized the importance of clarity and conciseness in pitches. A successful pitch concisely articulates the problem being solved, the uniqueness of the solution, and the strategic use of capital. More importantly, clear go-to-market strategies and user acquisition plans are particularly compelling.

Read more: Crypto Marketing Truth: Advertising Cannot Buy Results

Projects that distinguish themselves through a well-defined unique selling proposition (USP), backed by thorough market and competitor analysis, stand out. Incorporating on-chain metrics and market trends can further enhance a project’s attractiveness by providing a clear picture of its potential.

“We’ve all heard it before. Less is more. As simple as it sounds, we value clear and concise pitches. Keep it short and sweet! Not only do VCs read through hundreds of pitches a week, but I firmly believe that the less time it takes to explain your project, the better it will be,” Carlucci advice.

Likewise, Samuel Huber, the CEO of Landvault and the Matera Protocol, told BeInCrypto that startups should pivot their focus toward hard metrics. These include profitability, burn rate, and capital efficiency, which are now paramount to investors. Even with the current enthusiasm in the crypto market, the broader economy will likely continue to adopt a cautious approach.

The emphasis on real revenue generation cannot be overstated. In the flux of market cycles, where bull markets often prioritize growth at the expense of solid business foundations, bear markets shift the focus back to fundamental metrics like revenue.

“Entrepreneurs should shift their focus towards metrics that investors prioritize. Indeed, crypto startups need to demonstrate their ability to generate real revenue. They must focus on showcasing practical business models rather than solely emphasizing decentralization,” Huber explained.

The path to funding is fraught with challenges. “There’s a tightening of funds for startups with unproven business models and poor execution,” Huber noted. He emphasized the importance of demonstrating tangible business metrics over mere projections. This calls for a meticulous focus on building a solid business that stands out in a bear market.

Tokenomics and the Dream Team

Moreover, the team behind a project is a critical factor for VCs. Carlucci emphasized that VCs invest in people as much as in ideas. Therefore, a team’s track record, complementarity, and vision are scrutinized. The team’s openness to collaboration and feedback and a proactive approach significantly influence a VC’s investment decision.

In this regard, most VCs look for teams with a strong track record and extensive experience in their field.

“The team is everything! No matter the tech, the design, or the idea, most VCs invest in people; therefore, the team and the vision of the founder is crucial,” Carlucci said.

Tokenomics and crypto narrative trends play a crucial role in attracting investment. Projects must design tokenomics that align VCs’ interests with the project’s long-term vision, ensuring a vested interest in the project’s success. Likewise, entrepreneurs must align their projects with prevailing crypto narratives, striving to position themselves as leaders within these spaces.

Despite the inherent risks in the crypto industry, Carlucci suggested that a well-articulated USP and comprehensive market analysis can address potential concerns and demonstrate the startup’s awareness of and preparedness for challenges. Meanwhile, Huber highlighted the importance of utility and adaptability.

“Generally, projects within infrastructure sectors are highly attractive to investors due to their potential for broader utility. While applications certainly create value, infrastructure projects influenced by narrative trends such as NFTs, the metaverse, DeFi, RWA, or the creator economy offer a foundation that can be leveraged by others, thereby enhancing their resilience,” Huber added.

Trust is also a critical factor in investment decisions. VCs prefer to back founders they know and trust, reflecting the importance of building a strong company and networking to enhance credibility. In Huber’s view, the journey to securing VC funding in the crypto market is as much about showcasing resilience and innovation as it is about navigating the nuances of investor expectations and market dynamics.

Indeed, Carlucci highlighted the importance of selecting the right VC partners. Startups should seek strategic partners offering more than capital, such as user access, networking opportunities, and industry expertise.

Read more: GSD Capital Review: A Guide to the AI-Powered Hedge Fund

By focusing on timing, clarity, team dynamics, tokenomics, and strategic partnerships, startups can increase their chances of attracting the necessary funding to propel their projects forward. Adhering to these principles is instrumental to securing venture capital funding in the crypto market.

The post Venture Capitalists Explain How to Pitch Your Crypto Project to Raise Capital appeared first on BeInCrypto.

As blockchain technology reshapes the traditional finance sector and pioneers the expansion of decentralized finance (DeFi), staying informed and adaptable is key to success. Hence, the transformative potential of DLT highlights the impact on financial inclusion, payment efficiency, and the broader economic ecosystem.

The Move Towards Tokenization

President of Hedera, Charles Adkins, told BeInCrypto that blockchain technology has emerged as a fundamental force in transforming transactions, lending, and investments. He attributed the success to the inherent capabilities that enable simultaneous access, validation, and record updating.

This innovation is particularly impactful in cross-border payments, trade financing, and end-to-end payment transfers.

It enables banking institutions to conduct near “atomic” international settlements with reduced manual interventions and lower costs. Indeed, such advancements enhance payment models’ efficiency and extend financial services to previously unbanked populations, fostering greater financial inclusion.

“Blockchain technology sets out to enable individual collaboration and allow societies to play a part in determining the future of technological innovation. DLT, for instance, has created new trust layers that enable individuals, enterprises, and governments to generate collective social impact without the risk of bad actors acquiring influence,” Adkins said.

Read more: Deploying Blockchain Infrastructure: Challenges and Solutions

DLT is at the forefront of financial innovations like fractional tokenization, promising to democratize access to wealth opportunities. For instance, a recent study conducted by Coalition Greenwich revealed that stakeholders in the derivatives sector prioritize the adoption of tokenization. It helps enhance collateral management over implementing generative artificial intelligence (AI).

In fact, for end users, tokenization emerged as the most significant potential innovation in trading and clearing workflows.

“Many large asset managers are working on projects to test the potential for using [tokenization] to move cash and securities more efficiently. From their perspective, the transformation of financial assets into tokens and the use of distributed ledgers to manage transfers could lead to a substantial reduction in time and expense,” analyst at the Coalition Greenwich wrote.

For this reason, Adkins envisions a future where DeFi and traditional finance technologies converge, enhancing the financial system for institutions and individuals.

Blockchain Beyond Financial Markets

DLT’s potential extends beyond financial markets to address pressing issues like climate change and greenwashing. By enabling accurate tracking and reporting of carbon emissions, DLT empowers organizations to optimize their processes, align with environmental standards, and offer transparency to consumers and policymakers.

However, building trust and understanding between developers, policymakers, and the public is crucial to achieve this. Commitment to education, crypto advocacy, and collaboration among Web3 projects exemplify the efforts to ensure security and transparency across public and private sectors.

“DLT plays a vital role in preventing greenwashing attempts by organizations, an issue that has grown in relevance due to difficulties in verifying if companies are adhering to sustainability goals. Because data is publicly available on the distributed ledger, organizations can’t falsify their carbon footprint or make unbacked claims about their sustainability efforts,” Adkins emphasized.

One notable project, as discussed in a study by the University of Copenhagen, involves the use of blockchain technology to create a detailed and transparent record of companies’ carbon footprints. This project, named REALISTIC, allows for the precise documentation of goods’ CO2 emissions throughout their production and supply chain processes.

The implementation of such technology aids companies in complying with new EU legislation that mandates the reporting of carbon footprints. It also paves the way for consumers to verify the environmental impact of their purchases through QR codes​.

“[With a pen, for instance] we don’t know the equivalent carbon association which each of its parts… So when you’re looking to procure the various parts of the pen you will know exactly how to weigh which part comes from where, and understand the impact in terms of carbon [footprint],” Chief Revenue Officer at SAP Sustainability Deb Kaplan said.

Read more: Top 9 Eco-Friendly Cryptocurrencies To Invest In

The Climate Ledger Initiative (CLI) is another key player. It focuses on the integration of digital innovations like blockchain, the Internet of Things (IoT), and artificial intelligence for climate change mitigation and adaptation. The CLI supports various use cases and provides a platform for testing digital innovations in real-life scenarios. Therefore, it emphasizes the role of DLT in scaling carbon markets and enhancing their environmental integrity.

Adkins believes the integration of DLT with AI is poised to tackle misinformation and data integrity challenges. As blockchain technology matures, he anticipates its mainstream adoption, unlocking societal and economic benefits, especially in asset management and beyond.

“DLT will allow developers to address challenges with low-quality, biased, and unverified data, providing data-sharing infrastructures that are open to all researchers and developers, and ensuring transparency at every point of the AI data input process,” Adkins concluded.

Staying ahead in the markets requires an unwavering commitment to innovation, ethical governance, and community engagement. By embracing the principles of DLT, individuals and institutions can ensure a confidence and integrity in the digital age.

The post This is Why Distributed Ledger Technology is a Must for Future Success appeared first on BeInCrypto.

These advancements promise to enhance the functionality and utility of digital currencies and address some of the most pressing challenges facing the market today.

The Promise of Interoperability

A pivotal development in blockchain technology is the advancement of interoperability protocols. Kadan Stadelmann, Chief Technology Officer at Komodo Blockchain, told BeInCrypto about the critical compatibility between blockchains.

“Blockchain interoperability empowers distinct blockchain networks to communicate, share data, and collaborate. It is the glue that binds together various blockchain ecosystems as well as their respective cryptocurrencies, non-fungible tokens, and decentralized applications,” Stadelmann said.

This breakthrough enables different blockchain ecosystems to connect seamlessly, facilitating a more cohesive and efficient crypto environment. As interoperability increases, so does the decentralization of the entire blockchain sector, ushering in a trustless user experience where reliance on centralized exchanges diminishes.

Interoperability binds various cryptocurrencies, NFTs, and decentralized applications together, heralding the cross-chain decentralized exchanges (DEXes) era. These platforms allow for trading assets across disparate blockchains and the movement of assets from one blockchain to another.

“Blockchain solutions to date have been formed around existing smaller ecosystems for relatively simple use cases. To realize blockchain’s promising results for global supply chains that intersect with multiple ecosystems and utilize multiple blockchain platforms, interoperability is critical,” analysts at Deloitte wrote.

Read more: How to Launch Cross-Chain DApps: A Guide to Interoperability

Therefore, this innovation aims to address the longstanding issue of liquidity fragmentation in the crypto market, providing a more streamlined and user-friendly trading experience.

“Developing or leveraging cross-chain solutions can pioneer dApps that seamlessly operate across multiple blockchains. This not only diversifies their user base but also allows them to tap into various existing ecosystems, presenting unparalleled opportunities for innovation, growth, and the development of novel decentralized solutions,” Stadelmann added.

A number of initiatives are leading the charge towards a more interconnected blockchain environment, each introducing innovative methods and technologies to advance interoperability.

Bridging Blockchains Together

The growth of decentralized finance (DeFi) is a testament to interoperability and blockchain technology’s revolutionary potential. According to Stadelmann, smart contracts and DEXes have become the backbone of DeFi. They offer peer-to-peer (P2P) lending, borrowing, and trading without the need for traditional financial intermediaries.

Essentially, DeFi democratizes finance, lowering barriers to entry and fostering financial inclusivity and transparency, challenging the foundation of traditional banking and finance.

“DEXes offer a way to trade crypto assets via peer-to-peer networks, automated market maker (AMM) liquidity pools, or hybrid forms that combine both P2P and AMM tech. Lending and borrowing protocols facilitate P2P crypto lending while decentralized oracles bridge the gap between off-chain and on-chain data. Collectively, these solutions empower users with unprecedented control over their assets,” Stadelmann affirmed.

Read more: A Complete Guide to P2P Decentralized Exchanges (DEXs)

As interoperability increases, the entire blockchain sector becomes more and more decentralized. Interoperability is crucial because it creates a more trustless user experience without third-party intermediaries such as centralized exchanges.

For instance, Polkadot utilizes an innovative parachain structure that allows multiple blockchains to interlink and interact within a unified network. This method facilitates interoperability and consolidates security and data sharing among the interconnected chains. Therefore, it marks a significant step toward a cohesive blockchain infrastructure.

“Moreover, cross-chain DEXes, such as the one built into Komodo Wallet, allow users to trade assets across separate blockchains (i.e. BTC and ETH) or bridge/move assets from one blockchain to another (i.e. convert BEP-20 USDT to PLG-20 USDT),” Stadelmann affirmed.

Cosmos, on the other hand, employs its Inter-Blockchain Communication (IBC) protocol. It enables a direct and trustless transmission of messages and value between autonomous chains. The concept of an “internet of blockchains” presented by Cosmos emphasizes the critical role of interoperability in realizing the decentralized and scalable network necessary for Web3’s success.

Chainlink has developed the Cross-Chain Interoperability Protocol (CCIP) to facilitate a standardized, secure, and smooth exchange of data and commands across diverse blockchains. Chainlink’s initiative underlines the essential need for secure and dependable data interchange to support the future of blockchain’s interoperable capabilities.

“Banks now understand that, without a way to interoperate with their counterparties’ chains and with public chains, they won’t be able to be successful in whatever assets they create. Interoperability is now a hard requirement [also for blockchains],” Chainlink Co-Founder Sergey Nazarov said.

Enhacing Privacy and Security

Integrating zero-knowledge technology into blockchain networks is another significant stride toward enhancing privacy and security. Zero-knowledge proofs allow for the validation of transactions without revealing sensitive information, addressing privacy concerns associated with public blockchains.

Ramani Ramachandran, Chief Executive Officer at Router Protocol, told BeInCrypto that zero-knowledge proofs contribute to creating secure and private transactions, essential in applications where data sensitivity is paramount. Therefore, such an important cryptographic innovation is crucial for use cases demanding confidentiality, making it a cornerstone for future blockchain applications.

“Adopting zero-knowledge proofs is a significant step towards achieving a balance between transparency and privacy in blockchain networks, making them more suitable for a wider range of applications, including those requiring strict data protection,” Ramachandran explained.

Likewise, Vitalik Buterin, the Co-Founder of Ethereum, believes in the use of privacy pools as a mechanism to enhance confidentiality in financial dealings. This approach utilizes zero-knowledge proofs to enable individuals to certify their separation from any funds associated with unlawful activities.

“The next logical advancement in the quest for increased cryptographic privacy involved the introduction of general purpose zero-knowledge proofs, as used in blockchains like Zcash and on-chain smart contract systems like Tornado Cash. Such systems allow the anonymity set of each transaction to potentially equal the entire set of all previous transactions,” Buterin wrote.

Buterin highlighted that solutions based on zero-knowledge proofs are anticipated to see substantial growth over the next year. This surge is expected as global regulations shift and individuals increasingly prioritize safeguarding their privacy.

Read more: On-Chain and Off-Chain Privacy in Web3: Differences Explained

Still, Stadelmann emphasized that the industry remains vulnerable to other threats and “new obstacles that might not exist today.” These include quantum computing, advancements in artificial intelligence, and environmental concerns, which pose significant hurdles. But Ramachandran also stressed the risks of regulatory uncertainty.

“Regulation is almost the only thing I see inhibiting the growth and adoption of blockchain technology. The tech is here, the developers and interest are here, we just do not have a set rulebook. This makes potential users, entrepreneurs, and investors skeptical and wary of getting involved, seeing it as too much risk,” Ramachandran concluded.

Staying informed and engaged with the latest advancements and regulatory developments is essential. Especially, for overcoming these obstacles and capitalizing on the transformative potential of blockchain technology. Stadelmann adviced entrepreneurs to be involved in the blockchain community, participate in regulatory dialogues, and support technological innovations to proactively address any challenges.

The post This New Tech Will Transform Crypto in 2024 appeared first on BeInCrypto.

The growing interest in DePIN reflects the potential to revolutionize traditional systems by democratizing access to essential services and fostering community-driven solutions.

The Promise of DePIN to Disrupt Monopolies

DePIN stands at the forefront of marrying cryptocurrency’s decentralized ethos with the physical world’s infrastructural needs. From Wi-Fi and transportation to data storage and energy, DePIN sets the stage for blockchain’s transparency, efficiency, and security to extend to the real world. This shift aims to enhance blockchain’s utility and offer users tangible benefits and rewards.

It is worth noting that this sector is currently controlled by three of the world’s largest and most reputable technology firms — Microsoft, Google, and Amazon. Consequently, forging partnerships, developing business, and generating organic demand might prove more challenging in this crypto area than others. Therefore, success largely depends on the ongoing trend of increased censorship by Big Tech.

Still, crypto infrastructure is anticipated to grow exponentially in regions where governments intensify restrictions on dissent and impose stricter controls on freedom of speech. This scenario presents significant opportunities for serving gray market customers.

“DePIN will be one of the most important areas of crypto investment for the next decade. Storage solutions, decentralized wireless networks, and other hardware networks are critical to the industry’s long-term viability. They could also disrupt an absolutely ginormous set of monopolies. Legacy cloud infrastructure is a $5 trillion global market cap sector,” analysts at Messari wrote.

Indeed, the allure of DePIN lies in its promise to decentralize wealth and control associated with infrastructure development. It enhances the capabilities of the Internet of Things (IoT) by integrating blockchain and community-driven incentives. Essentially, DePIN pools the necessary computational and storage capacities from various sources, making them readily available for developers and their applications.

Shann Holmberg, Chief Operating Officer at Lunar Strategy, told BeInCrypto that such a framework promises to lower operational costs, scale efficiently, and offer a robust alternative to traditional infrastructural models.

“By decentralizing the resources, it allows for the widespread adoption of innovative technologies, even in remote or underdeveloped areas. This global reach empowers users from all corners of the world to engage with and benefit from decentralized technologies, fostering a more inclusive digital environment,” Holmberg said.

This approach is gaining traction among crypto investors who see it as a scalable solution to global infrastructure challenges. DePIN aims to transform public infrastructure into a more inclusive, efficient, and participatory system by leveraging blockchain.

The impact of DePIN on Web3 is profound. It offers a decentralized model that alleviates bottlenecks and fosters a more reliable platform for decentralized applications (dApps). By improving resource availability and global accessibility, DePIN catalyzes the widespread adoption of innovative technologies, especially in underserved regions.

“DePIN transforms traditional infrastructural systems by decentralizing control, shifting it from large corporations to a community of individual contributors. Similar to miners in a Proof-of-Work network, each participant contributes resources and has a say in the system proportional to their investment,” Holmberg added.

Top DePIN Projects to Keep an Eye On

Developing effective incentive models, navigating the extended development, and competing with established Web2 giants can be challenging. Yet, the potential benefits of community control, fair pricing, and incentivization present a compelling case for DePIN’s transformative power.

“Things like file storage, wireless access, and cloud computing require lots of capital expenditure and operational headaches, and it’s a non-trivial challenge to scale a hardware network to viability. Tokens have proven effective at catalyzing the development of these networks as they coordinate decentralized hardware investment at scale,” analysts at Messari emphasized.

Indeed, DePIN projects like Rowan Energy are pioneering sustainable practices. It leverages blockchain for clean energy production and consumption in the energy sector. This innovative approach supports the global pursuit of net-zero emissions and incentivizes renewable energy adoption through mechanisms like NFT Carbon Offset Certificates.

The wireless sector, too, is witnessing a revolution with projects like Helium Network. It aims to disrupt traditional connectivity models by rewarding providers with cryptocurrency. This model exemplifies how DePIN can offer equitable solutions in connectivity, marking a significant shift from centralized providers.

“Helium Network is challenging the dominance of large network providers. With a clever multi-token system, each token plays a crucial role in managing network resources and compensating providers. Users burn the HNT token to access connectivity services, and the MOBILE token is the lifeblood of Helium’s 5G project,” Holmberg explained.

Meanwhile, decentralized storage networks like Filecoin redefines data storage and cloud computing. By ensuring secure, efficient, and affordable storage solutions, these projects highlight DePIN’s potential to challenge and possibly outperform traditional cloud services.

“Without data, an AI can’t learn. If the data is compromised due to a single point of failure, or the central data storage entity changes access rights or its prices, an AI that is dependent on that storage entity will cease to be. It is an existential risk, which is why I argue that AIs must use a decentralized storage solution,” BitMEX Co-Founder Arthur Hayes said.

Read more: Filecoin (FIL) Price Prediction 2024 / 2025 / 2030

Despite challenges, DePIN projects signal a robust move towards more democratic, efficient, and sustainable infrastructural solutions. This transformative journey is about technological advancement and reimagining the foundational systems that support the digital and physical worlds.

The post Decentralized Physical Infrastructure Network (DePIN) Projects to Watch in 2024 appeared first on BeInCrypto.

While the inherent volatility of crypto markets remains, a blend of regulatory shifts, technological advancements, and macroeconomic factors suggests the industry is entering a period with the potential to reshape the future of digital assets.

Unprecedented Demand Forces Behind Bitcoin

At the core of this transformation is the anticipated impact of the Bitcoin halving. Historically, the halving has been a precursor to significant price appreciation for Bitcoin, which catalyzes broader market rallies. This phenomenon, tied to the reduction in new Bitcoin supply, has previously ignited periods of intense speculation and investment.

However, the current cycle is diverging in key ways. Unlike past bull runs, the fluctuations in Bitcoin’s price are becoming less extreme. This is indicative of a maturation of the market and potentially signals more stable growth ahead.

Despite the subdued price appreciation, the CEO of Factor LLC, Peter Brandt, and Managing Partner at Fundstrat, Tom Lee, believe Bitcoin could still surpass $150,000. For this reason, Matthew Howells-Barby, VP of Growth at Kraken, believes the new pricing trend actually bolsters Bitcoin’s value proposition.

“While there’s a reduction in overall volatility, Bitcoin is still in the category of risk assets and investors of all sizes will view this as a potentially high-return investment. The more cycles that Bitcoin survives and goes on to outperform, the more confidence this breeds in longer-term investors,” Howells-Barby told BeInCrypto.

Read more: Bitcoin Price Prediction 2024 / 2025 / 2030

This trend, coupled with the success of spot Bitcoin exchange-traded funds (ETFs), exemplifies the growing investor confidence and institutional acceptance of cryptocurrencies as a legitimate asset class. Indeed, spot Bitcoin ETFs have attracted over $7.4 billion in net inflows within the first 7 weeks of trading. Notable products such as Blackrock’s IBIT ETF quickly climbed the ranks of top ETFs by inflow.

Together, the recently launched spot Bitcoin spot ETFs have over $50 billion in assets under management, according to the co-founder of Reflexivity Research, Will Clemente. Consequently, renowned industry figures like Layah Heilpern believe that spot Bitcoin ETFs have changed the market structure, and “no one knows what is coming next.”

What is certain is that this surge of institutional interest, long anticipated by market observers, has finally materialized. According to Howells-Barby, this development lays a solid foundation for the ongoing Bitcoin bull run. It has the potential to gain even more momentum with the entry of new participants into the market.

“What’s even more encouraging is that many RIA networks and major brokers are still yet to list spot Bitcoin ETFs. This is coming and will create another wave of buying from pent-up demand,” Howells-Barby added.

Moreover, the crypto market benefits from a significantly more positive macroeconomic outlook. Analysts believe inflation rates have peaked and anticipate lower interest rates, likely leading to increased liquidity.

Jerome Powell, the Chairman of the US Federal Reserve, recently informed lawmakers that he and his colleagues are committed to such a goal. He also reiterated that interest rate reductions will still be possible in the upcoming months.

“[Rate cuts] really will depend on the path of the economy. Our focus is on maximum employment and price stability, and the incoming data as they affect the outlook, and those are the things we’ll be looking at. We are just going to keep our heads down and do our jobs and try to deliver what the public is expecting from us,” Powell said.

Howells-Barby believes that the improving economic environment is conducive to further investments in digital assets. He maintains that retail and institutional investors seek higher returns in a low-interest-rate environment.

“It’s easy to forget that much of the recent price action in both crypto and equities has happened before any fiscal easing. As rates come down, more liquidity will enter the markets and this should only be positive for assets like Bitcoin,” Howells-Barby emphasized.

Altcoins Ready for Upgrades and Regulatory Clarity

Technological innovations within the crypto ecosystem also play a crucial role in this unique bull run. The Ethereum network’s upcoming Dencun upgrade promises to reduce costs and increase efficiency for Layer 2 rollups. It focuses on scalability through proto-danksharding, bringing forward the concept of blob-carrying transactions.

This innovative method significantly reduces data storage requirements at the consensus layer. It offloads data storage and uses hashes for reference, streamlining the transaction verification process. Ultimately, this drastically reduces the data storage burden since blobs are temporary and expire after roughly three weeks.

These advancements are significant, especially for Ethereum’s Layer 2 (L2) solutions. The Ethereum upgrade promises to reduce transaction fees by at least a factor of 10, heralding a major leap forward in the network’s scalability and cost-efficiency.

“The long-awaited upgrade is forecast to cut costs for Ethereum’s L2s by at least 10x, making Ethereum more scalable and efficient. By leveraging rollups and temporary blob storage, the developers aim to increase throughput and reduce fees for users,” Head of Research at IntoTheBlock, Lucas Outumuro, explained.

Read more: Ethereum (ETH) Price Prediction 2024 / 2025 / 2030

The Dencun upgrade, along with advancements in parallelization and modularization by protocols like Sei and Celestia, is expected to drive a new wave of interest and investment in crypto.

“The recent interest in modular scalability, led by the likes of Celestia, Avail, EigenLayer, and many more, has presented a new slew of options for driving down end-user costs and creating fertile ground for developers to build in. The upcoming Dencun upgrade is another milestone in the journey towards proto-danksharding, but there’s still a long way to go,” Howells-Barby stated.

Furthermore, the crypto industry is witnessing unprecedented regulatory clarity and engagement. Efforts to establish frameworks like the Markets in Crypto-Assets (MiCA) in the European Union signal a move towards a more regulated and secure environment.

Such regulatory advancements provide a layer of certainty and trust that was previously lacking. Therefore, it paves the way for broader adoption and integration of cryptocurrencies into the global financial system.

The current crypto bull run is characterized by reducing volatility, institutional adoption, technological advancements, and a favorable macroeconomic backdrop. These factors, together with increasing regulatory clarity, suggest a pivotal moment that could define the future trajectory of digital assets.

“Several sovereign states have begun accumulating crypto assets and integrating them into their financial systems. As clearer regulatory frameworks arrive around the world, this will only increase. There’s also the fact that 130 countries around the world – representing 98% of global GDP – are exploring the development of a central bank digital currency (CBDC). All of this is happening while traditional financial institutions are trying to chase the flood of capital coming in via the Bitcoin spot ETFs,” Howells-Barby concluded.

The unique confluence of these elements reflects the distinct nature of this Bitcoin bull run, indicating it may be unlike any other seen before.

The post Kraken VP of Growth Explains Why This Crypto Bull Run Is Unlike Any Other appeared first on BeInCrypto.

This innovative approach, known as quantum economics, promises a more accurate and nuanced understanding of financial systems, surpassing the limitations of classical economic theories.

Quantum Economics, Not Bitcoin

Classical economic theories have long been the bedrock of financial analysis and prediction, relying heavily on equilibrium models to forecast market behaviors. These models, while foundational, often miss the mark by ignoring the complexities and inherent uncertainties of real-world economic systems. Despite their innovative approach to decentralization and security, Bitcoin and similar cryptocurrencies still operate within these classical frameworks, thus inheriting their limitations.

Quantum economics, however, embraces these complexities, drawing parallels with the wave-particle duality of quantum particles to model economic phenomena.

Orrell emphasized that quantum economics leverage quantum models as mathematical tools to analyze and predict economic behaviors more effectively. According to him, just as quantum probability is instrumental in understanding physical processes, it can also illuminate economics.

“I discovered that people were using quantum models in the social sciences for things like decision making – in other words, how to use a quantum model to take decision making into account. Just like in normal economics, rather than making completely rational decisions all the time, we are finding there are all these other things going on in the background that interfere with thought processes,” Orrell explained.

Read more: Quantum Computers Break Encryption But Far From Cracking Bitcoin

Therefore, quantum models could account for the non-rational behaviors affecting economic decisions. This approach offers a more comprehensive framework for understanding the financial system’s flow of money and information. Therefore, it challenges the traditionally rational assumptions of classical economics.

He also reflected on an analogy between the binary nature of traditional computing and the capabilities of qubits in quantum computing. This paradigm shift, Orrell suggested, could revolutionize economic modeling and decision-making by embracing uncertainty and complexity.

“A qubit can be likened to a spectrum of colors, offering different shades and complexities. It’s not just zero or one. Qubits are entangled; they interact with each other, introducing uncertainty upon measurement. This fundamental difference is what sets it apart. And as I’ve mentioned, demonstrating that models based on this principle can be profitable and effective is the key point,” Orrell said.

While Bitcoin has revolutionized the concept of decentralized finance, it remains confined within the paradigms of classical economic theories. These often fail to capture the full spectrum of human behavior and market fluctuations. Orrell believes that the increased understanding of quantum principles could lead to innovative economic models and strategies, benefiting the global financial system.

The post Mathematician Says the Future of Economics Is Quantum, Not Bitcoin appeared first on BeInCrypto.

The question of whether some of the top DeFi projects could be compromised is critical. It touches on vulnerabilities that range from smart contract flaws to governance weaknesses.

The One Thing Preventing DeFi Hacks

Ronghui Gu, co-founder of blockchain security firm Certik, provided BeInCrypto with invaluable insights into the complex DeFi market. According to him, the bedrock of securing DeFi platforms is thorough auditing.

“Auditing can help identify vulnerabilities by meticulously analyzing code to detect potential reentrancy issues or other exploitable flaws. This process involves rigorous testing against known attack vectors, fuzzing, thorough code review, and validation against best practices,” Gu told BeInCrypto.

Multichain’s exploit, resulting from centralized key control, exemplifies the dangers of such vulnerabilities. While audits might not change a project’s structural decisions, they highlight risks, offering a chance for mitigation.

According to Gu, effective audits should thoroughly assess the implementation of multi-signature wallets. He also pointed out the necessity for regular security training for team members handling private keys. This comprehensive approach to auditing, from code analysis to operational security practices, is vital in enhancing a platform’s resilience against attacks.

When addressing governance system vulnerabilities, as highlighted by the Tornado Cash governance exploit, Gu advocates for a comprehensive review of the governance process. This includes scrutinizing proposal creation rules, voting power distribution, and the execution conditions of proposals.

Such an audit identifies potential vulnerabilities and ensures checks and balances are in place to prevent disproportionate control by any single entity.

“Assessing the security implications of each step in the governance process should help verify that there are adequate checks and balances in place. This can prevent any single entity or group from exerting disproportionate control. Auditors must test critical parameters like quorum requirements, voting thresholds, and time lock durations to balance efficiency with security,” Gu added.

New Technologies for Regular Auditing

The technological advancements in auditing, as Gu mentioned, include integrating machine learning and developing specialized tools tailored to DeFi’s unique challenges. This approach enables rapid code analysis, uncovering vulnerabilities that could go unnoticed until exploited.

Machine learning’s ability to adapt and learn from past exploits promises a dynamic defense mechanism against new threats. Predictive modeling further enhances this capability, identifying potential vulnerabilities under various stress scenarios before they can be exploited.

“Dynamic analysis, which tests the smart contract in a live environment, is vital for uncovering runtime errors and more intricate vulnerabilities that only manifest during execution. Given the evolving nature of threats, continuous monitoring and regular re-auditing are crucial, particularly when updates or modifications are made to the contract,” Gu explained.

However, technology alone is not a panacea. Developing tools and frameworks specifically designed for DeFi’s unique challenges is crucial. These include the analysis of complex smart contract interactions and the simulation of economic attacks.

Collaboration within the DeFi community is another cornerstone of a robust security strategy. By sharing knowledge and resources, auditors can remain abreast of emerging threats and refine best practices for the industry’s collective benefit. Training and developing talent with a deep understanding of blockchain technology, and cybersecurity is also vital, ensuring teams are equipped to navigate the complexities of DeFi auditing.

“Developers, as the builders of this industry, should be up to date on the latest vulnerabilities and best practices. The open-source nature of crypto is one of its greatest strengths, and we should continue to prioritize that going forward. It means that one platform’s mistake doesn’t have to be repeated, everyone can learn from it,” Gu added.

Read more: Identifying & Exploring Risk on DeFi Lending Protocols

The inherent complexity of DeFi projects introduces several common vulnerabilities, from smart contract flaws to governance mechanisms and the risk of composability. These vulnerabilities highlight the importance of comprehensive security reviews, which must delve into smart contract code, governance structures, and protocol integrations.

The frenetic pace of DeFi development, while driving innovation, often leads to compromises in security, increasing the risk of attacks.

Are All DeFi Platforms Compromised?

For users, navigating the DeFi sector requires diligence and an understanding of the inherent risks. Engaging with platforms demands a proactive approach, from researching a project’s security history to staying informed about the broader ecosystem.

Gu emphasized that transparency can help DeFi platforms foster trust and facilitate community learning. Therefore, this ensures that one platform’s mistake can be a lesson for others.

“An important factor is the project’s transparency regarding its governance structure and codebase. Open-source projects with clear and well-documented code are generally more trustworthy. The presence of a KYC (Know Your Customer) program for the project’s lead contributors is also a sign of a project’s commitment to integrity and transparency,” Gu said.

Tools like Certik’s Security Leaderboard and Skynet, as well as Beosin EagleEye, Hacken, Blowfish and SlowMist, provide valuable insights into a project’s security posture. According to Gu, these offer real-time monitoring and security rankings so users can make more informed decisions and minimize risk exposure, especially in a sector where nearly $5.80 billion has been hacked.

Read more: AI for Smart Contract Audits: Quick Solution or Risky Business?

As DeFi continues to redefine the financial system, the emphasis on security cannot be overstated. Integrating advanced technologies, specialized tools, and community collaboration is pivotal in safeguarding the ecosystem. However, the responsibility also lies with users to exercise vigilance and with developers to prioritize security at every development stage.

Only through a concerted effort can the DeFi space mature into a secure, stable, and thriving environment for innovation.

The post Why Your Favorite DeFi Platform Could Be Compromised appeared first on BeInCrypto.

Yet, its journey from a niche fascination to a global platform accessible to all has encountered significant obstacles.

Lowering Entry Barriers With a Vibrant Community

The metaverse’s initial promise captivated imaginations worldwide, offering a digital frontier with endless possibilities. However, achieving mass adoption has been challenging due to technical limitations and accessibility issues. Overcoming these hurdles is multifaceted because there is a need for technical advancements, community engagement, and interoperability.

Yemel Jardi, Executive Director of the Decentraland Foundation, told BeInCrypto about the company’s strategic adaptations to meet evolving market demands. According to him, Decentraland is focused on performance optimization and developing a new advanced Desktop Client for 2024.

This upgrade supports a wider range of user experiences, from casual exploration to intensive gaming and virtual events. The goal is to reduce entry barriers for new users with a comprehensive effort to foster a more immersive, inclusive, and engaging virtual world.

“We’ve adopted a forward-looking strategy dedicated to enhancing the user experience, optimizing performance, and preparing for VR and mobile versions. We are also simplifying onboarding, user-friendly no-code creator tools, and other new features that will deepen engagement. Moreover, the Desktop Client will handle rendering avatars and complex graphics simultaneously and offering a truly immersive environment,” Jardi explained.

Read more: Building Bridges: How to Connect Virtual Worlds to the Metaverse

According to Jardi, Decentraland has recognized the shift towards authentic user-generated experiences. Now, it encourages gamified events and interactive storytelling that enhance user engagement and retention.

For instance, the Decentraland Ambassador Program and participation in industry conferences and events are part of the 2024 Manifesto, which reflects the commitment to community growth and active user involvement.

Emerging Technologies and Metaverse Interoperability

Another key focus to enable a more inclusive metaverse is interoperability. Allowing users to export their digital identities to other virtual worlds and supporting a variety of social login options champions a unified, cross-platform metaverse.

Such openness fosters innovation and promotes a seamless user experience across various digital environments.

“We see interoperability as the only real solution for an ethical, entertaining, decentralized, and human-centered future where digital worlds become a part of our life,” Jardi added.

Indeed, Decentraland has created DCL VRMs, which allow users to export their outfits to be used in other metaverses such as Monaverse, Nifty Island, OnCyber, and any virtual world that allows VRM imports. Since VRM is currently the leading model format for VR social applications and games, this initiative fosters collaboration and innovation with open-sourced standards that empower developers and creators across virtual platforms.

“Decentraland’s long-term vision for its role in the metaverse is to establish itself as the largest decentralized and open-source virtual world owned entirely by our users. It aims to provide a platform where users have complete control over their digital assets and experiences. It must be a space where creativity knows no bounds, where users can build, explore, and socialize in a decentralized and borderless virtual environment,” Jardi concluded.

Read more: Why Do We Need Open Protocols in the Metaverse?

As digital and physical realms increasingly merge, the metaverse offers a vision of interconnected human existence. Indeed, it is seen as the internet’s next evolution and is projected to increase to $936.6 billion by 2030.

Augmented reality, especially with major players like Apple entering the arena, emerges as a pivotal force driving these projections. It will act as a conduit between digital and physical spaces. Subsequently, it will allow users to access information pertinent to their context, engage with virtual elements, and collaborate seamlessly over any distance.

The post Why the Metaverse Is About to Make a Comeback appeared first on BeInCrypto.

The proliferation of scams, ranging from ransomware and phishing emails to darknet marketplaces, underscores the critical need for vigilance among crypto enthusiasts. So, here are the top crypto scams to avoid in 2024.

Beware of Smishing Attacks

One insidious tactic gaining traction is “smishing.” This method involves sending fraudulent SMS messages pretending to be from reputable sources, such as cryptocurrency exchanges. Basically, the goal is to trick recipients into divulging sensitive information or clicking on malicious links.

The term “smishing” merges “SMS” and “phishing,” highlighting its nature as a phishing attack via text message. IBM describes smishing as a social engineering attack aimed at manipulating individuals into compromising their security.

To counteract this threat, users are advised to scrutinize the origin of text messages and avoid engaging with suspicious links.

For smishing scams within the crypto market, a notable incident involved Binance, one of the largest cryptocurrency exchanges. The platform and its users have been targets of smishing attempts. Essentially, scammers send SMS messages impersonating Binance to phish for user credentials and other sensitive data.

In a specific case, Binance’s customers in Hong Kong lost nearly $500,000 due to these SMS scams. This incident highlighted the vulnerabilities associated with SMS communications and the sophisticated techniques scammers use, such as SMS spoofing, to make their messages appear legitimate.

The Rise of Romance Scams

Romance scams, or “pig-butchering,” have witnessed exponential growth, with losses amounting to billions of dollars. These scams exploit social media, dating apps, and other platforms to build trust with potential victims before eventually soliciting cryptocurrency under pretenses.

According to the Federal Trade Commission (FTC), romance scammers conned victims out of $139 million worth of cryptocurrency last year. These scammers often begin relationships through dating apps or social media, quickly profess love, and then steer the conversation towards lucrative crypto investments to defraud victims​​.

Read more: Crypto Social Media Scams: How to Stay Safe

The FTC warned against online love interests who request money or suggest crypto investments, signaling a potential scam.

“They make plans to visit but tell you they’re delayed by costly problems: a lost airline ticket or visa, a medical emergency, or a blocked account. They say if you could send them some money, they could still come see you. But the minute your online love interest asks for money, you know it’s a scam,” the FTC wrote.

The FBI has also reported a trend where romance scammers increasingly pressurize victims to invest in cryptocurrency, leading to substantial financial losses. In 2022, 19,050 victims reported losing $739 million to romance scams, with a significant portion of these scams involving fake crypto investments​​.

“Online dating is common today, but unfortunately scammers also thrive on those same sites. Whether you’re looking for love or a friendship online, be sure you first understand the risk of being exploited. Remember, a scammer will always eventually ask you for something, so set a boundary early on and never, ever send money to someone you’ve never met,” FBI Agent Sherri E. Onks said.

Fake QR Codes: A New Fraud

Fake QR codes, also known as “quishing,” have become a prevalent scam targeting individuals in various ways. This crypto scam involves the use of QR codes that, when scanned, redirect victims to fraudulent websites.

These sites may mimic legitimate payment platforms, tricking users into entering their personal and payment information, which scammers can exploit for fraudulent purchases or sell on the dark web​​​​.

YouTube channels have become the latest battleground for cryptocurrency scams. Indeed, attackers employ advanced deepfake technology to impersonate notable figures such as Elon Musk, Ripple’s CEO Brad Garlinghouse, and Michael J. Saylor of MicroStrategy. The scammers use deepfake videos to create an illusion of legitimacy, promising viewers massive returns on their crypto investments.

Despite efforts by cybersecurity companies to develop detection tools, these scams have proven difficult to eradicate. The technique involves the unauthorized use of live streams, QR codes, and malicious links to deceive viewers into sending cryptocurrency under the guise of doubling their investments, only to abscond with the funds.

YouTube’s massive user base, totaling 2.70 billion active accounts, presents an attractive target for these criminals. With millions of subscribers, some channels are manipulated to mimic reputable brands, with scammers netting over $600,000.

To safeguard against these scams, the FBI suggests treating QR codes with the same caution as suspicious emails. Always verify the source before scanning a QR code. Look for signs of tampering or alteration if the QR code is in a public place. Be wary of unsolicited QR codes sent via email, and avoid scanning them.

“Some scammers are physically pasting bogus codes over legitimate ones. If it looks as though a code has been tampered with, don’t use it. Same thing with legitimate ads you pick up or get in the mail. Finally, consider using antivirus software that offers QR readers with added security that can check the safety of a code before you open the link,” the FBI wrote.

By vigilance and practicing these precautionary measures, one can be protected from quishing scams.

The Menace of Fake Trading Bots

The rise of fake crypto trading bots has been a significant concern in the cryptocurrency industry. Indeed, various scams target investors hoping to benefit from automated trading systems. These scams often promise unrealistic returns, leveraging the allure of artificial intelligence (AI) to create a facade of legitimacy.

Moreover, they may use fake endorsements from celebrities to add credibility to their schemes. Investors are advised to be wary of platforms showcasing fabricated numbers, to verify company details, to assess the language quality on their websites, and to look for user complaints on consumer forums and sites like TrustPilot​​.

The US Commodity Futures Trading Commission (CFTC) has issued warnings about AI trading bots, emphasizing that they often promise huge crypto profits without any substantial basis. Therefore, investors are encouraged to research providers thoroughly and avoid putting their money into algorithms that make big yield claims without verifiable evidence.

“When it comes to AI, this advisory is telling investors, ‘Be wary of the hype.’ Unfortunately, AI has become another avenue for bad actors to defraud unsuspecting investors,” OCEO Director Melanie Devoe said.

The warning is part of a broader effort to educate investors about potential scams exploiting arbitrage algorithms or social media hype​​.

Discord Hacks Target Crypto

Discord is a popular communication platform within the crypto community. However, it has become a hunting ground for hackers. By compromising admin accounts, cybercriminals disseminate fake announcements and links, leading to potential financial losses for unsuspecting users.

These crypto scams have been particularly targeting non-fungible token (NFT) projects. Indeed, there has been an alarming increase in phishing attacks through Discord, with a reported loss of millions of dollars. These attacks have been sophisticated, utilizing social engineering techniques such as phishing and exploiting vulnerabilities in Discord bots like Mee6.

The attackers have focused on creating a sense of urgency around NFT minting events to deceive users into clicking malicious links​​​​.

One notable example of such an attack was on Yuga Labs’ Discord server in 2022, the creators behind the Bored Ape Yacht Club (BAYC) collection. The Social Manager’s verified Discord account was compromised, and the attackers used it to post promotional material that led to a phishing site, scamming users by asking them to send Ethereum (ETH) for a minting fee. This resulted in the theft of NFTs from the victims’ wallets​​.

To protect against such scams, individuals should be cautious of common attack vectors on platforms like Discord. Awareness of phishing attacks that use FOMO-inducing language is crucial to mitigate the risk of falling victim to these scams.

Read more: 15 Most Common Crypto Scams To Look Out For

As the community and law enforcement work to enhance security measures, users must safeguard their assets and personal information from these sophisticated cyber criminals.

The post These Are the Top Crypto Scams to Avoid in 2024 appeared first on BeInCrypto.

Michael Kong, CEO of Fantom, recently shared insights with BeInCrypto into the company’s strategy to construct a decentralized tomorrow. He emphasized the role of Fantom Sonic and the network’s approach to achieving consensus.

Addressing Scalability With New Tech

A relentless pursuit of innovation has marked Fantom’s journey into the blockchain industry. Kong elucidated that the release of Fantom Sonic aims to “dramatically improve” the Lachesis consensus protocol. This enhancement allows Fantom to process over 2,000 transactions per second with a one-second confirmation time.

Such performance surpasses Ethereum’s and sets a new industry standard for transaction speed and efficiency.

“There is a tradeoff between increasing the number of validators and the network’s performance. On average, the more validators in the network, the longer it takes to achieve consensus. However, the release of Fantom Sonic dramatically improves our Lachesis consensus protocol… Even if the number of nodes increased dramatically, confirmation times will still likely be very low,” Kong told BeInCrypto.

At the core of the protocol’s architecture is the Proof-of-Stake (PoS) mechanism. It is safeguarded by a consensus model requiring two-thirds of the total staked FTM for transaction confirmation.

With approximately 1.4 billion FTM currently staked and a total value locked (TVL) of $67.46 million, the network ensures security against potential threats, reinforcing its reliability and trustworthiness.

Read more: Fantom (FTM) Price Prediction 2024/2025/2030

Moreover, Fantom Sonic, the network’s new tech stack, introduces a Fantom Virtual Machine (FVM). According to Kong, it aims to reduce storage requirements and enhance transactions per second throughput significantly.

Compatible with Solidly and Vyper programming languages, it facilitates a transition for developers familiar with Ethereum, fostering a more inclusive and adaptable ecosystem.

“The new mechanism will have Proof-of-Safety, liveness, and robustness. Additionally, we plan to implement ‘horizontal scaling’ to maintain great performance even if there is a notable increase in nodes,” Kong added.

The upcoming launch of Fantom Sonic on the mainnet signifies a leap forward, promising to elevate network performance to unprecedented heights. Fantom’s long-term vision includes exploring new theories and scaling solutions to accommodate increasing nodes without compromising performance.

How to Achieve Real Decentralization

Addressing the topic of decentralization, Kong shared that there is “no correct level of decentralization.” He highlighted the expectation for a more evenly distributed staking system as the network grows.

This model promotes a more secure and decentralized environment while keeping validators motivated by economic incentives to maintain network integrity and trust.

“Like many other networks, the number of staked tokens is unequal across validators. While we anticipate more nodes joining the network, some nodes will still have significantly more staked FTM than others. That said, validators have an economic interest in maintaining trust in the network,” Kong added.

Therefore, Fantom’s strategy extends beyond technological advancements, focusing on community and validator engagement. The anticipated reduction in the cost of running a validator node under Fantom Sonic aims to democratize network participation, inviting smaller validators to contribute to and benefit from the ecosystem’s growth.

Looking ahead, Kong anticipates significant advancements in zero-knowledge proofs and technologies poised to enhance network security and scalability further. He concluded that collaboration with the right team is paramount for success in the cryptocurrency industry.

“The most important advice I can give is to work with the right people – those with the skills you need for your project, honesty, integrity, and the ability to be a team player. Without the right people, it will be far harder to make the kind of impact you want,” Kong emphasized.

Read more: 9 Best Fantom (FTM) Wallets in 2024

As blockchain technology regulations evolve, Fantom remains proactive in navigating the legal environment.

Indeed, the protocol ensures that dApp partners and developers have the necessary support to thrive within compliant frameworks. Its strategy for building a decentralized tomorrow reflects its leadership’s vision. Also, a commitment to fostering a secure, efficient, and inclusive digital future.

The post Inside Fantom’s Strategy to Build a Decentralized Tomorrow appeared first on BeInCrypto.