This is hardly the first instability the network has demonstrated, much to the chagrin of its users. Transaction flooding is an issue on Solana in part because of the low transaction fees compared to networks like Bitcoin and Ethereum, which have relatively high gas fees that would make flooding extremely expensive.
Solana goes down again
On April 30, NFT minting bots began flooding the Solana network with 4 million transactions per second, causing the network to lose consensus. The project tweeted that "Engineers are still investigating why the network was unable to recover, and validator operators prepare for a restart." The network was offline for seven hours.
"Official" Teenage Mutant Ninja Turtles NFT project buys a fake IP rights contract
A project to create Teenage Mutant Ninja Turtles NFTs stirred up a lot of excitement, garnering more than 100,000 Twitter followers on a verified Twitter account that described itself as "The Official TMNT NFT". Crypto research project "Rug Pull Finder" wrote on March 29 that they didn't believe the project owned the IP rights they needed. The TMNT project posted later that day same day, "Let's make it clear: we own the NFT digital rights of the Original Teenage Mutant Ninja Turtles 1987". Rug Pull Finder followed up with a detailed thread in late March outlining their belief that the project didn't own the proper rights to create the NFTs, writing that, "unless they can get cooperation from Viacom for the release of their collection, it will absolutely be a rugpull".
In late April, the Twitter account was suddenly suspended. On April 30, the TMNT project announced in their Discord that they had discovered that they had been sold a "fake IP rights contract", which they learned after communication from Paramount. They, probably overly optimistically, wrote that they would be pausing the project but they were hoping to "continue the project hand in hand" with Paramount.
Saddle Finance loses more than $11 million to hack
An exploiter used a flash loan attack to pull 3,933 ETH (~$11 million) from the "decentralized automated market maker" Saddle Finance. Shortly after the attack, the hacker began moving the stolen funds through the Tornado Cash tumbler to launder the money.
Saddle Finance had lost money once before, hours after it launched in January 2021. An individual was able to arbitrage Saddle Finance pools for a profit of around $275,000.
- Tweet thread by PeckShield
- "Update on Saddle’s Launch", Saddle Medium
$80 million stolen from Fei Protocol and Rari
A hacker attacked multiple Rari liquidity pools relating to the Fei Protocol, exploiting a known re-entrancy vulnerability that exists on forks of the Compound protocol. The attacker stole more than $80 million from the projects.
Fei Protocol tweeted that they had paused borrowing to avoid further thefts, and offered a $10 million bug bounty if the hacker returned the money.
SEC files fraud complaint against NASGO organizers
The SEC charged four individuals with fraud violations in relation to their actions with NASGO, a company that created various tokens that the SEC has since described as unregistered securities. The defendants allegedly made claims that one of the tokens would increase in value by 10¢ every week, plus another 10¢ each time a new business joined their platform. The defendants also engaged in various other shady business, including hiring traders to trade the tokens amongst themselves to give the appearance of investor demand. This worked only until investors actually decided they wanted to cash out, causing the whole thing to fall apart because the market demand was faked. According to the SEC, NASGO misappropriated almost $4 million in investor funds.
- "SEC Alleges Fraud in Digital Asset Securities Offerings", U.S. Securities and Exchange Commission
Deus Finance exploited for $13.4 million in the second hack in two months
The defi project Deus Finance was hit with a flash loan attack that netted the hacker $13.4 million. The loss to the protocol was likely larger than what the hacker was able to withdraw, though Deus announced that no users had been liquidated and that "the loss is on the protocol".
Deus had suffered a similar attack in March, with an attacker using a flash loan attack to steal more than $3.1 million. Deus reimbursed users who were liquidated in the incident.
According to Deus' CEO, the exploit in this incident was not the same one used in the previous attack. He wrote on Twitter that the exploit was "the first of its kind, a zero-day exploit on Solidly [decentralized crypto exchange] swaps".
Central African Republic adopts Bitcoin as legal tender
The Central African Republic became the second country to adopt Bitcoin as legal tender, after El Salvador did the same in September 2021. It's a strange move, in a country where only 4% of people have Internet access, whose currency (the Central African CFA franc) is fairly stable, and which already has access to digital currencies via services like Orange Money.
The Bank of Central African States (BEAC) has expressed surprise at the CAR's choice, saying that they only learned about it along with the rest of the public. Two former prime ministers of the CAR co-authored a letter stating that adopting Bitcoin as legal tender without guidance from the BEAC was a "serious offence".
Scammers create fake Louis Vuitton NFT project
Scammers created a project on OpenSea with Louis Vuitton branding, which invited individuals to visit an external site to mint exclusive NFTs. They placed a blue checkmark on the project profile image to try to trick people into believing the project was verified, and they were able to manipulate the floor price to make it appear at a glance as though the NFTs could be traded for tens of thousands of dollars more than they cost to mint.
The project airdropped these NFTs to NFT whales, causing some trackers used by people who follow and imitate whales' behavior to believe the whales themselves had minted the NFTs. The site then used a random counter to make it appear that the NFTs were quickly selling out, causing people to quickly mint their NFTs in fear of missing out. One NFT collector recounted her experience falling for the scam, buying five of the NFTs for a total of 0.6 ETH (~$1700) in hopes of striking it rich on a newly-launched project before it became widely known.
An examination of the website source code shows that the project is reusing code from a different scam based around World Cup themed NFTs.
Representative Madison Cawthorn faces accusations of insider trading and disclosure violations related to Let's Go Brandon coin
North Carolina Representative Madison Cawthorn was one of several influential people who helped to promote the "Let's Go Brandon" memecoin, which has since become the subject of a class-action lawsuit due to a reported pump-and-dump scheme. Cawthorn is not named in the lawsuit, but he may face his own troubles: although he has claimed to own the currency, he has never publicly disclosed any stake in the coin as is likely required by ethics legislation. Cawthorn also commented "Tomorrow we go to the moon!" on a post about the coin from his official Instagram account, the day before the team of NASCAR driver Brandon Brown announced the cryptocurrency would be the primary partner for the 2022 season. "This looks really, really bad," said governmental watchdog group member Dylan Hedtler-Gaudette. "This does look like a classic case of you got some insider information and acting on that information. And that's illegal."
Fidelity plans to allow people to put retirement savings into Bitcoin
Financial services company Fidelity announced its intentions to allow people to put some of their retirement savings into Bitcoin in the near future, despite the Department of Labor's urgings otherwise. It is concerning to see a large financial helping to normalize the idea that cryptocurrencies are an "investment".
The Employee Retirement Income Security Act of 1974 requires plan fiduciaries to act solely in the financial interest of plan participants, and the U.S. Department of Labor issued guidance in March reminding plan fiduciaries of this duty, urging them to "exercise extreme care before including direct investment options in cryptocurrency". In a blog post shortly after, the DoL wrote that they had "serious concerns" about plans that would expose participants in cryptocurrencies and related products, outlining risks including valuation concerns, obstacles to making informed decisions, price volatility, and a still-developing regulatory landscape.
A Fidelity executive said that the company "believe[s] they should withdraw that guidance".