🤑 Crypto interest soars

All Things Flooz newsletter is for innovators, creators and traders.

Flooz

5 min read Mar 28, 2023


Talking points

  • 🚀 DeFi Breaking Records

  • 💀 Kokomotion

  • 🤯 BitGet Reveals Everything

🚀 DeFi Breaking Records?

2022 was quite the rollercoaster ride for the crypto space and that has continued into 2023. From the ongoing bear market to the high-profile collapses of some of the industry’s most prominent players, like Terra and FTX. But amidst all the turbulence, Venture Capital (VC) continues to climb.

A recent study released by European investment firm RockawayX revealed that VC investment in crypto startups based in Europe reached an all-time high of $5.7 billion in 2022. That’s right, you read it correctly. ALL-TIME-HIGH. It seems that despite the setbacks we've seen, investors still believe in the potential of crypto and Web3, which is certainly some positive news!

European decentralized finance startups also had a booming year, with investments reaching $1.2 Bn in 2022, a 120% increase from the previous year’s investments of around $534 M, it looks like people are starting to take notice of DeFi’s potential.

On top of this Europe is home to the highest number of crypto startups, with a whopping 3,977 companies based in the region, according to their headquarters' location. However, it falls behind the United States in the number of startups with over a million dollars of funding and companies with a value of over $1 billion, known as unicorns.

VC investment in crypto Financial Services 2022 (% growth vs 2021)

An interesting note from the above image is that DEX's are also up 199%, but Centralized finance (CeFi) is down 25%. Could we see DeFi overtake CeFi in the coming years? It is certainly looking like it.

Europe is becoming increasingly crypto-friendly. Lawmakers in the European Union are finalizing the highly anticipated Markets in Crypto-Assets (MiCA) regulations, which will provide a much-needed regulatory framework for the industry. The regulations have been postponed twice due to translation issues, as laws passed in the EU must be translated into all 24 official languages of the member states. At the time of writing, a final vote on the MiCA rules is set for April 2023.

VC investment in crypto Financial Services 2022 global comparison

The chart above shows the percentage of investors from each region that are VC funding European crypto start ups. And surprisingly, USA takes 40% of that which is the highest percentage, with European investors being second with 32%. Now this may be a surprise but considering the SEC is clamping down on crypto in the USA, it makes sense to venture into Europe where regulations are seemingly looking better.

Europe seems to be a powerhouse for crypto, and with regulation seemingly on the way, the situation there seems much more positive than that of the US, especially with the SEC seemingly wanting to attack every aspect of the crypto world, which is drastically halting development and sadly is pushing that interest over into Europe and other regions.

Is there light at the end of the dark tunnel for crypto 🥶

💀 Kokomotion?

We’ve got some not so fun news with yet another scam...

Over the weekend, developers behind the Optimism-based lending protocol Kokomo Finance appeared to have conducted an exit scam. That’s right, you heard it here first! It seems that these sly developers manipulated tokens on the protocol and effectively stole $4 million in user funds.

Now I'm sure you know what an exit scam is, but if you're not sure, here is a super quick breakdown:

It’s when developers or promoters of a crypto project market a legitimate-looking project to investors only to pull liquidity and erase all online or offline presence once a sizable amount of money has been attracted to that project. Sneaky, right?

Kokomo Finance, which launched on Nasdaq on March 25, quickly gained favor among Optimism users, allowing them to trade, borrow, and lend wrapped bitcoin WBTC, ether ETH, tether USDT, USD Coin USDC and DAI.

However, on Sunday night, things took a turn for the worse.

Kokomo developers deployed an attack contract cBTC from the main address of KOKO, Kokomo’s native tokens. They then set the reward speed, paused a borrow feature and created a malicious contract to interact with the rest of the protocol, security firm CertiK said.

These are becoming more and more frequent, which is scary.

The issuance of wrapped bitcoin derivative cBTC on the Ethereum network was ultimately used to trick the protocol into falsely believing it had more liquidity when there was none. Another developer address was then used to maliciously approve a transfer of spending over 7000 Sonne Wrapped Bitcoin, another bitcoin derivative token on Ethereum. These tokens were then used to swap all user-supplied liquidity to Kokomo, amounting to over $4 million.

Over 72% of the assets were according to reports, Wrapped Bitcoin WBTC, which is super suspicious to start with...

But if you thought that was the end of it, think again! Social media accounts and the Kokomo website were quickly deleted in the following hours, and KOKO tokens fell 97%, wiping nearly all value for holders. Yikes!

This exit scam was the latest in line of a number of growing attacks and exploits in the crypto space. We have seen many big scams so far this year and they don't look like stopping anytime soon, so when we see them, we will update you so that you can also stay as vigilant as possible.

Remember to do your due diligence and verify your activity on-chain to keep your assets protected!

🤯 Bitget reveal everything?

Bitget, the largest crypto copy trading platform, has just announced an exciting new partnership with Space and Time (SxT) to bring unparalleled transparency to its users.

Bitget has become the first centralized exchange to leverage a decentralized data warehouse, thanks to its partnership with Space and Time.

This innovative platform will provide Bitget users with a verifiably tamperproof audit trail of data and computation, giving them full transparency about the exchange's activity, liquidity, assets, and liabilities. Users can be assured that the data and computation powering the exchange are accurate and haven't been tampered with.

As part of this partnership, Bitget has launched its Proof of Reserves Page, demonstrating to users that it is a full-reserve exchange. Using the cryptographic-audited Merkle tree method, Bitget's Proof of Reserves (PoR) will also validate that users' assets stored on the platform are safeguarded. This means that Bitget hold more than over 100% of users assets, so there is transparency and protection, with users knowing that they're assets are available at all times.

Now considering what we have seen over the past year, this is fantastic news, some transparency within centralized exchanges is massive and definitely a step forward in the right direction in terms of trust, which seems to be extremely low right now.

Space and Time is also the first decentralized data warehouse to join tamperproof on-chain and off-chain data, developing a novel cryptography called Proof of SQL that cryptographically proves that query computations were done accurately and that both the query and the data are tamperproof.

But wait, there's even more!

Further to this, by leveraging the Space and Time data warehouse, Bitget can run verifiable computations against verifiable on-chain and off-chain data. So not only will this significantly improve transparency, but it will also help Bitget strengthen the trust it has built with its growing user base as it continues to expand its product offerings to become a one-stop investment solution.

Now if that isn't worthy of a HECK YEAHHHH, I don't know what is...

Although in all seriousness, this is a brilliant partnership from Bitget as security and trust are dangerous issues within the crypto space, and the sooner solutions are implemented, the better. Hopefully we see much more to come within the crypto space in terms of security and transparency.

Could we see other CEX's following in Bitget's footsteps? 👀

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