DeFi Whale Endures Massive Losses on Hyperliquid
Blockchain analysis reveals an unidentified Hyperliquid trader has incurred losses exceeding $40 million in under a month, surpassing previous records on the platform. The trader engaged in high-leverage trading, initially losing nearly $40 million after selling approximately 900,000 HYPE tokens before a price rebound. Subsequent positions in Ether (ETH) and Bitcoin (BTC) also resulted in significant losses, including an additional $35 million lost on ETH and unrealized losses nearing $2 million on BTC. Despite these setbacks, the trader maintains a $152 million position at roughly 29x leverage, signaling continued risk exposure.
Kinto Network to Cease Operations Following Hack and Financial Strain
Kinto Network, a decentralized finance platform operating an Ethereum layer-2 blockchain, announced it will shut down in September. The decision follows a $1.6 million exploit stemming from a vulnerability in the ERC-1967 Proxy standard and deteriorating market conditions. The protocol disclosed that its team has been working without salaries since July and failed to secure final financing, prompting the closure. Community members have also criticized the project’s unsustainable high-yield offerings, which previously included a 130% annual percentage yield (APY) on stablecoins, even after the security breach.
SwissBorg Loses $41 Million in Solana Token Hack via Third-Party API
SwissBorg reported a loss of approximately $41 million in Solana tokens due to an exploit targeting the API of its staking partner, Kilin. The breach affected about 193,000 Solana tokens within SwissBorg’s Earn program. The company emphasized that its application and other Earn products remained unaffected and assured users that operations continue normally. SwissBorg CEO Cyrus Fazel stated that despite the significant loss, the platform’s overall financial stability is intact, and affected users will be contacted directly regarding compensation.
MegaETH Launches Yield-Bearing Stablecoin to Offset Layer-2 Fees
Ethereum layer-2 protocol MegaETH, supported by Vitalik Buterin, announced the development of USDm, a yield-bearing stablecoin designed to reduce sequencer fees—the costs incurred when publishing transaction batches on Ethereum’s mainnet. The stablecoin will be launched through a partnership with Ethena, a protocol managing over $13 billion in total value locked (TVL), leveraging BlackRock’s tokenized US Treasury bill fund for reserves. MegaETH co-founder Shuyao Kong highlighted that this innovation aims to lower user fees and enhance application design flexibility on layer-2 networks.
BubbleMaps Uncovers Largest Known Sybil Attack in Crypto History on MYX Airdrop
Blockchain analytics firm BubbleMaps identified what it calls the largest Sybil attack to date, involving approximately 100 funded wallets that collectively claimed $170 million in MYX tokens from a recent airdrop. The analysis showed these wallets received similar Binance Coin (BNB) transfers from OKX within minutes, despite having no prior activity, raising suspicions of coordinated fraudulent claims. MYX Finance’s token recently surged 1,100% over seven days to become the top weekly gainer, though this exploit casts doubts on the integrity of the airdrop distribution. A Sybil attack involves creating multiple fake identities to manipulate decentralized systems.
DeFi Market Overview
Data from Cointelegraph Markets Pro and TradingView indicate that most of the top 100 cryptocurrencies by market capitalization ended the week positively. MYX Finance led gains with an 1,100% increase, followed by Worldcoin (WLD) with over 90% growth. Despite recent hacks and losses, the DeFi sector continues to attract significant attention and investment.
FinOracleAI — Market View
The recent losses and security breaches in DeFi platforms like Hyperliquid, Kinto, and SwissBorg underscore persistent vulnerabilities that may weigh on short-term investor confidence. However, innovations such as MegaETH’s yield-bearing stablecoin suggest ongoing efforts to enhance protocol sustainability and reduce user costs. Market participants should monitor developments in security practices and regulatory responses, as well as the impact of large-scale exploits on token valuations and user trust.
Impact: negative
