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- 🟣 Linea draws the line
Welcome back to 0xResearch – quick hitting alpha for the crypto degens. Here's what we got for you today:
Velocore DEX exploit
Connext pivot
Matter Labs drops “ZK” trademark
CT: Debating Ethereum
Bitcoin has been ranging, without much action in recent days. $67,200 has remained rock solid support since flipping a major May resistance level, but so far all attempts to clear $70k and make another run at the $71k resistance have been feeble.
Yesterday, attention (of the unwanted sort) turned to Consensys-backed Ethereum L2 Linea, where the Velocore DEX dapp was exploited to the tune of at least $6.8 million worth of ETH across Linea and zkSync.
In a post-mortem, the team blamed an edge case in the smart contract code for the DEX’s Constant Product Market-Maker (CPMM).
The dapp was triple-audited, and had contracted for real-time threat detection, but that didn’t stop a Tornado Cash-funded attacker address from using a flash loan to drain its liquidity pools. Sound familiar? We’ve seen this movie before, sadly.
One plot twist in this case is that the hosting chain, Linea, opted to step in and halt its own sequencer to stifle the attacker’s efforts to exfiltrate funds back to Ethereum. While entirely sensible, the move once again underscores the centralization of L2s that are still in their "training wheels" phase — nearly all of them.
Connexting the dots
Cross-chain bridge Connext is rebranding to Everclear. Normally I yawn and move on with this kind of news, but in this case it’s more of a pivot, and one filled with too many buzzwords to ignore — as their blog post explains:
“The system is built as an Arbitrum Orbit rollup (via Gelato RaaS), and uses Hyperlane with an EigenLayer ISM to connect to other chains.”
NB: RaaS = Rollup As A Service, while ISM stands for Interchain Security Module.
Everclear is their bid to solve liquidity fragmentation via chain abstraction. Try saying that 10 times fast!
ZK trademark kerfuffle
Matter Labs has backpedaled on its effort to secure a trademark for the letters “ZK” following community pushback.
Evidently, they couldn’t rally support around the idea that it was being done for the greater good of Ethereum and decided the PR headache wasn’t worth the legal risk.
BRK.A “rug pull”:
No, that’s not a newly launched memecoin. It’s the venerable Berkshire Hathaway!
We hope no one had a heart attack when the Warren Buffett empire briefly appeared to go bankrupt.
Uniswap protocol founder Hayden Adams jumped at the chance to poke fun at the NYSE for the snafu, tweeting “uniswap protocol fixes this.”
The stock exchange has reportedly fixed the “technical glitch.”
On May 1, Aave Labs introduced two Temp Checks on the Aave Governance forum: Aave V4 and Aave 2030. These proposals outline a vision for several substantial innovations and iterations to the Aave Protocol, and seek to engage the community for discussion and feedback on the roadmap. These changes aim to improve capital efficiency, enhance chain abstraction, and support the adoption of Aave’s GHO stablecoin. At large, the proposed changes seek to both defend Aave’s incumbent position as the premier onchain money market, but also position the protocol to remain competitive for the years to come.
Pyth is set to benefit from numerous fundamental tailwinds, most notably the insatiable demand for high frequency trading and price data that arises naturally as financial markets mature and complexity compounds.
A fee war is brewing; Ark Invest for now ditches its plan to enter the spot ether ETF arena with 21Shares.
DC AG Brian Schwalb said the case is the “largest income tax fraud recovery” in DC history.
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The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.
