$3B Fake APT Tokens

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Good Morning,

SocialFi hype remains with more products popping up. New Yorker are farming tokens by ordering food using the web3 restaurant loyalty app, Blackbird. All this while the bear market continues, but at least builders are experimenting with new crypto-enabled user behavior. Neat!

In Today's Email:

• What Matters: $3B fake APT token ⚠️

• Products: SendIt, simple crypto tx 📨

• Charts: ARB dominance, Zora L2 📈

NOTEWORTHY READS

• AC Capital’s read on understanding “intent” in crypto.

• Our Network’s read on Ethereum issuance, staking, and more.

• Placeholder VC’s read on progressive compliance.

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WHAT MATTERS

UpBit Scammed: $3.4B Fake Aptos Tokens

State of play: UpBit, South Korea's largest CEX, faced a significant security breach. The exchange detected a fraudulent deposit on Sunday, where scammers presented a fake coin as genuine Aptos (APT) tokens.

• Upbit's system mistakenly identified the counterfeit coin as APT, leading a bot to deposit a large number of fake tokens into multiple user accounts.

• The massive breach impacted approximately 100K accounts.

• The counterfeit APT tokens had a total value of $3.4B, marking it as one of the most significant recent cryptocurrency security breaches.

• The counterfeit APT tokens did not pertain to the native Aptos Network coin; instead, the name of the fraudulent token is "ClaimAPTGift”.

• ClaimAPTGift had six decimals, while APT used eight. This prevented a major crisis, as users would have received $25K instead of $250 if both tokens had eight decimals.

What’s next: UpBit has started requesting refunds back from users that have sold the fake APT tokens.

• UpBit is lucky as the scammer utilizes 6 decimal point instead of 8 like the original APT token. As a result, the damage is predicted to be around $3M, but it could’ve been way worse.

Our take: This incident shows having a robust backend for a centralized exchange is incredibly important. Unlike equities, it will be much harder for CEXs to “rollback” these trades.

For builders and investors: Crypto softwares are “money” softwares, but unlike FinTech products, you can’t always rely on the existing rule of law to fix the mistakes that you’ve made.

• Always test your products for loopholes, exploitability, and conduct multiple audits.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇

PRODUCTS OF THE WEEK

SendIT, The Simplest Way to Send Crypto

A platform simplifying crypto transfers via email or social handles. SendIT streamlines the onboarding process for newcomers by creating a wallet when they click the shared link and verify their email or Twitter account.

• SendIT is built on top of decentralized, non-custodial, and open-source web3 authentication SDK, Arcana Auth.

• Since SendIT Beta was launched, over 400,000 people have tried SendIT and sent crypto over 1M times.

• SendIt doesn't charge extra fees on top of gas fees.

Other cool products:

• Riiv, a platform to discover the latest airdrop

• Tapasom, an NFT and AI-powered innovative platform

• ONLYPWNER, an EVM CTF platform

• WalletViu, a simple crypto portfolio tracker

• Hello.storage, A decentralized drive based on blockchain

CHARTS OF THE WEEK

Arbitrum One Holds 54% of the Roll-Up Market

State of play: Arbitrum One dominates the roll-up market, holding a majority share of 54%+. It leads in terms of DEX trading volume and the number of bridged ETH, indicating its strong position in these areas.

• Two weeks ago, Arbitrum One had $334M in 24-hour trading volume and 16% growth over the past 30 days.

Our take: Despite Base's impressive growth, it still has a significant gap to close in order to catch up with Arbitrum One.

Zora Network Sees 97% MoM Creator Growth

State of play: Zora recently introduced an L2 solution on the OP Stack. Over 40,000 creators have adopted Zora's Network, resulting in a remarkable 97.5% month-over-month (MoM) growth in August.

• Starting in June, Zora has witnessed a 3x increase in MoM transaction growth, resulting in a total of over 7M transactions.

Our take: Even with the emergence of Base and PGN, ZORA now comprises 10% of OP stack chains, showing that its move to its own L2 is resonating with NFT enthusiasts and creators.

QUICK BITES & MEME

• Coinbase considers buying FTX europe

• Hong Kong to disclose crypto license applicants.

• Mixin Network suffered a $200M hack.

• Coinbase doesn’t rule out Base token entirely.

• Google Cloud adds 11 new blockchains to BigQuery

• UpBit suspends Aptos withdrawals due to bug.

• CoinShares starts US hedge fund division.

• Arrington removes himself from Celsius board.

• OpenSea tells users to rotate API keys after a third-party breach.

• NYDFS Crypto Chief departs the agency.

• ByBit suspends services in the UK.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.