Important news for Uniswap, the decentralized crypto exchange that uses a series of smart contracts to execute transactions. According to reports, Uniswap’s liquidity pools were drained in an $8 million sandwich attack.
Not only that, yesterday the exchange went Open Source, marking a significant event within the DeFi ecosystem. Let’s see what happened.
Summary
Crypto news: the attack on the Uniswap exchange, what happened?
Uniswap recently became the target of a sophisticated sandwich attack, which resulted in a massive theft of $25.2 million from eight different pools. This incident could mark a significant turning point for the entire Miner Extractable Value (MEV) ecosystem.
A sandwich attack is a type of front-running scheme in which a user makes a large trade on both sides of a target’s transaction to manipulate the price and profit from the resulting price change.
In this case, eight addresses were able to exploit the vulnerability and steal a substantial amount of assets from Uniswap pools. The validator behind the attack was funded through the anonymous Aztec protocol, suggesting that the theft from MEV bots was premeditated.
Furthermore, the confidential deposit into the validator’s account occurred eighteen days before the attack. As a result of two transactions, one front-run and one back-run, the hacker-validator managed to steal several resources from unsuspecting bots.
Among them, we see 7,461 WETH worth $13.4 million; 5.3 million USDC; 3 million USDT; 65 WBTC worth $1.8 million; and 1.7 million DAI. Unfortunately, this incident serves as a reminder of the potential dangers and vulnerabilities that exist in the rapidly evolving world of decentralized finance.
Indeed, the Uniswap attack highlights the need for more robust security measures and protocols to protect users from similar exploits. Not only that, the attack could serve as a tipping point for the MEV ecosystem.
Not surprisingly, it demonstrates the potential for bad actors to exploit the system and raises questions about the long-term sustainability of the current MEV model. In summary, the industry needs to reevaluate its approach to MEV and work to develop new solutions that prioritize security and protect users from such threats.
Uniswap becomes Open Source: changes in DeFi
On 1 April, the Business Source License (BSL) expired and the Uniswap protocol became de facto Open Source.
This deadline was a much anticipated event within the decentralized finance (DeFi) ecosystem, precisely because it will allow developers to fork the Uniswap v3 protocol and implement their own decentralized exchange (DEX)
The Uniswap v3 license was released in 2021 and lasted for two years, preventing commercial use of its code.
Today, the new license is called “General Public License” and marks a revolutionary step change in the industry precisely because Uniswap is the most widely used DEX in DeFi and is considered the largest market maker.
In addition, another important news in this regard was announced on 16 March, namely the implementation of the Binance Smart Chain within Uniswap, thus undermining its most bitter platform opponent PancakeSwap.
These latest strategic moves by UniSwap hint well at its intention to expand business and make DeFi a more open and accessible environment, with all the difficulties revolving around security and legal regulations.
The Uniswap crypto exchange available also on the BNB Chain network
On 16 March, Uniswap was also officially launched on the BNB Chain, an EVM-compatible blockchain initially founded by Binance. This is a really important and long-awaited news, as Uniswap users will finally be able to take advantage of the BNB Chain’s low transaction fees to exchange tokens, on par with PancakeSwap.
Indeed, this implementation on Uniswap inevitably means a decisive positioning within a market that saw the de facto monopoly of Binance’s DEX, PancakeSwap, as well as a significant step toward increasing accessibility and liquidity for its users.
Wormhole was chosen as the protocol’s designated bridge to BNB Chain, helping users transfer assets from Ethereum’s core network to BNB Chain. Thus, for users accustomed to DEX transactions, Uniswap will be even more widely used than usual.
As anticipated above, the rivalry with the PancakeSwap exchange for Uniswap has always been strong. Indeed, in February 2021, PancakeSwap, albeit briefly, had surpassed its peer Uniswap as the largest AMM-based exchange.
Daily trading volume on the DEX project based on BNB Chain was over $400 million more than the ETH-based platform on 19 February. However, as of September 2021, Uniswap has regained its leading place above PancakeSwap, which it presently maintains.
