Someone has Ledger’s number
In this week’s edition of The Context, Ledger gets phished, OpenSea gets schooled by OKX, and Manta Pacific raises its profile.
[Ledger: Plenty of phish in the sea? 🎣]
A former Ledger employee who still had access to some of the hardware wallet-maker’s systems fell victim to a phishing attack, allowing the hacker to upload malicious code that would steal over $600,000 from people using sites connected to the Ledger Connect Kit.
What Journalists Said 🧑💻:
It’s not even like the hacker was necessarily that skilled, explained Tim Craig (DLNews). Hackers can simply buy “software programmed to transfer unsuspecting users’ crypto out of their wallets after they interact with it.” These “drainers-as-a-service” are “lowering the bar to entry for would-be hackers.”
How did this happen? asked Stacy Elliott (Decrypt). One (former) Ledger dev clicking a “single phishing link unleashed chaos” throughout crypto.
Companies scrambled to contain the damage, wrote Katherine Ross (Blockworks), temporarily halting some DeFi activity. Tether said it blocked the exploiter’s address, SushiSwap and Revoke.cash went offline, and “WalletConnect was able to disable the ‘rogue project’.”
PR Perspective 🔎 :
This is not the first time we have reported on a Ledger crisis this year. This particular instance is a terrible look for a company whose entire raison d'etre is protecting user funds. Still, it happens—just look at the LastPass data breach—and Ledger lacks viable hard wallet competitors. While we’d advise Ledger not to rest on its laurels, it’s built enough of a lead in the market to weather this storm. However, this has certainly created an opportunity for a competitor, should one ever appear. As our CEO, Samantha YAP says, ‘In Web3, your reputation is as important as your runway’. Let’s hope this is the last crisis we see from Ledger for a while. 🧗♂️
[OKX: Coffee, BTC, NFT? ☕]
Daily NFT trading volume on crypto exchange OKX surpassed that of NFT marketplaces OpenSea and Blur this week to take the #1 spot. 📈
What Journalists Said 🧑💻:
What’s going on? asked Timmy Shen (The Block). Simply put, it introduced Bitcoins Ordinals trading, and at the exact right time. “NFT trading volume on the Bitcoin network climbed to $305.44 million in the week of Dec. 10 to Dec. 17 from $121.28 million in the previous week.” OpenSea and Blur, meanwhile, don’t yet allow Bitcoin Ordinals NFTs.
Keep an eye on the NFT market, wrote Hope C (CoinMarketCap) because it’s heating up 👀. In November, “the average value of NFT transactions witnessed a significant 114% increase, rising from $126 to $270” as overall volume neared the $1 billion mark.
PR Perspective 🔎 :
OKX rarely gets mentioned in the same breath as top-tier crypto exchanges such as Coinbase. For this week, however, its trading volumes are bigger than everyone but Binance. There’s no problem with it shouting its NFT success from the rooftops. 📣
[Manta Pacific: Blast in the Past? 💥]
Layer-2 network Manta Pacific is integrating Celestia in a bid to lower transaction fees for users. [Disclosure: Manta Pacific is a YAP Global client.]
What Journalists Said🧑💻:
Celestia recently launched its mainnet, reported Macauley Peterson (Blockworks), which “allows light nodes to verify data availability without downloading all data within a block.” The upshot? “This method reduces costs by enabling more efficient data retrieval.”
Other layer-2s are going a similar route, wrote Vishal Chawla (The Block). Polygon Labs and Arbitrum have also explored “Celestia’s DA solution to cut costs for Layer 2 chains” with these integrations currently standing at different stages.
Why It Matters ⁉️:
There’s a battle going on to attract users to L2s. Though Manta Pacific’s market share remains under 1%, it tripled the total value locked on its chain in just a week. Expect more integrations and movement among L2s in 2024. The future is also gearing up to be a potentially more modular one that strips back on costs by dividing the infrastructural workload, and by extension, being an important component in onboarding 2024’s cohort of users. 🔭
[Tweet Of The Week]
Credit: @divine_economy
[DeFi Definitions]
A segment exploring one particular aspect of DeFi.
This week: Deflationary by Iris Au
Last week we defined “inflationary”, this week we’re going to describe what is meant when a currency is said to be “deflationary”. The term “deflationary” is used to describe cryptocurrencies where the supply of coins in circulation decreases over time. This occurs as this type of cryptocurrency has a fixed maximum number of coins, causing the demand to go up. As a result, the intrinsic value and scarcity of deflationary cryptocurrencies will eventually increase, encouraging holders to keep these assets as a good store of value while spending less. Deflationary cryptocurrencies are a great way to preserve value during inflation and hyperinflation.
To create deflationary cryptocurrencies, there are two common methods to reduce token supply: fixing the supply and coin burning. Limiting the number of tokens created suppresses having an endless supply, which would instead make the asset inflationary. Many protocols will take one step further to secure deflation by destroying tokens in circulation through coin burning. This can be achieved in many ways: manually removing coins from circulation, sending tokens to inactive wallet addresses, implementing mechanisms that automatically burn tokens using transaction fees, and more.
The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It's aimed at anyone who wants to keep an eye on the space. It's put together by a team at YAP and doesn't contain any promotion of our clients (if one is mentioned, we'll flag that).
The team: Founder Samantha Yap and consulting editor Jeff Benson, Sam O'Donohoe, Ewan Brewster, Damian Alvarez, Andrew Wickerson, Tiffany Mac Sherry, Becky Corbel and Delon Chan. Your feedback is, as always, welcome. Ping us at thecontext@yapglobal.com. Old newsletters can be found here.
This newsletter is prepared by YAP Global, an international P.R. Consultancy focusing on helping cryptocurrency, Decentralised Finance (DeFi) and brands through impactful storytelling. Find out more about us here.