Geneva, Monday, July 31: Despite a hack that left Curve Finance with a $52 million dent, it was bailed out by a prominent group of crypto influencers, including Tron founder Justin Sun and investor DCF God.
They bought up CRV at a low price, preventing Curve Finance founder Michael Egorov from being liquidated.
Curve Finance is a decentralized exchange (DEX) that allows users to swap like-assets, such as dollar-pegged stablecoins or various liquid staking tokens, for one another.
The hack, which took place on July 30, is seen as a major setback for the entire DeFi community as it showed how vulnerable the DEX is.
Reports say that the hacker exploited a vulnerability in the Vyper programming language to steal $52 million in various tokens.
Many experts opined that the hack highlighted the risks of using DeFi and the need for regulation in the space.
The Curve Finance hack is a sign that DeFi is still in its Wild West phase,” said Nouriel Roubini, Professor of Economics at New York University in an interview with CNBC on August 2.
“It is a risky and unregulated space, and it needs to be regulated if it is to become a legitimate financial system.”
“The Curve Finance hack is a reminder that cryptocurrencies are not without their risks,” Christine Lagarde, President of the European Central Bank said in a speech at the European Central Bank on August 3, 2023.
“If cryptocurrencies are to become a mainstream financial asset, they need to be regulated in a way that protects users and prevents fraud.” She said.
“The Curve Finance hack is a reminder that DeFi is a new and emerging technology that is still vulnerable to attack,” said Gary Gensler, Chairman of the U.S. Securities and Exchange Commission.
“We need to be vigilant in monitoring DeFi activity and taking steps to protect investors,” he said in a speech at the Aspen Security Forum on August 4, 2023.
Many industry experts see the Curve Finance hack as a wake-up call for the DeFi community.
It shows that there is still much work to be done before DeFi can be considered a legitimate financial system. Regulation is needed to protect users and prevent hacks in DeFi.
Curve Finance is one of the most popular DEXes in the world, with over $20 billion in total value locked. It is a non-custodial exchange, which means that users retain control of their funds at all times. Curve Finance uses a liquidity pool model to facilitate trades, which makes it more efficient and cheaper than traditional exchanges.
