- GMX exploited. Should you be worried?
- Markets crash post-merge.
- Is Terra founder Do Kwon on the run?
- Latest update on Celsius.
- Fed to announce 50-75 bps rate hike?
Good morning Banter Fam,
One of the hottest protocols in crypto, GMX, was exploited this weekend raising questions about the network’s sustainability. A bad actor manipulated the price of AVAX on a centralized exchange while having both LONG and SHORT positions on GMX. The price manipulation allowed the actor to benefit in both directions, profiting $565k from liquidating GMX/GLP stakers on the network.
The team reacted by adjusting the cap on AVAX to $2m for longs and $1m for shorts. So what happens now?
Is it a legitimate concern or another opportunity to spread false information? Let’s explore.
On Sept 3, @derpaderpederp raised concerns over GMX’s model in a Twitter thread that explained how someone could exploit the platform’s dynamics. The bad actor from the exploit must have read the thread because it’s exactly the process they used to move the price of AVAX while holding a long and short position on GMX.
Gnosis protocol (GNS) apparently moved away from a similar dynamic when they began noticing the weakness. Gnosis shored up the problems by implementing some changes, a topic also discussed in the Twitter thread.
While the weakness remains on the platform, it leaves itself open for further exploits, although, according to a GMX team member, they are working towards solutions. Whether or not the team fixes the problem before the others begin attacking the platform remains to be seen. Let’s not forget how traumatized the cryptoverse remains following the Terra exploit.
If you’re a GMX holder, I’d recommend following GMX’s Twitter account for any pertinent updates.
Market update 🌍
This week’s macro-climate and looming interest rate hikes continue to subdue crypto prices. BTC has made a home of the well-defended $19.2K support level, visiting it five times since June the 18th. BTC had a rough go at the day and fell -3.47% to $19,416.
It’s safe to say the Merge was a “buy the rumor, sell the news event” after ETH’s performance yesterday. ETH price fell -9.17% and below its $1,400 support level. Looking at the weekly chart, ETH fell -24.49%, experiencing its worst week since May 2021, when the price fell -41%. Moreover, the price continues rejecting the downward resistance (red) that began in November 2021. So there is a sliver of hope. The relative strength index (RSI) shows a break in trend (green), which might be an early indicator that the price is stabilizing and ready to change direction in the coming weeks, but until the price overcomes the downtrend, I wouldn’t bet on it.
|US markets close||Gain/Loss|
|S&P 500||*market close|
Notable Gainers (24h):
|Protocol (Coin)||Price ($)||Gain (%)|
(At the time of writing no other protocols in the top 100 surpassed +1% gains in 24h)
|Bitcoin Fear and Greed Index||21 Extreme Fear|
|“Crypto” Google Trends 90d||62|
|“Bitcoin” Google Trends 90d||27|
“I’m not on the run!.” Terra founder, Do Kwon, has seemingly avoided South Korean authorities that went looking for the man in Terra’s Singapore offices. South Korean officials issued an arrest warrant for Do after a lengthy investigation into the Terra Luna collapse. Moreover, authorities voided his passport to prevent him from traveling. On Saturday, Do Kwon took to Twitter to explain his side:
Celsius’ revival plan includes selling stablecoins. According to court documents, Celsius has filed for permission to sell its share of stablecoins as part of its plans to revive the network, titled “Kelvin.”
Fed 50-75 bps rate hike. The US Federal Reserve could be gearing up to announce a 50-75 bps rate hike in September as inflation doesn’t show major signs of slowing down.
- Vitalik Buterin releases “What kind of layer 3s make sense.”
- Grayscale declares distribution rights to Ethereum PoW tokens.
- State of Yearn thread.
- Information on Rage Trade’s GMX Recycled Liquidity vault.
- TFM DEX Aggregator is live on Osmosis.
- Tornado Cash Update: “We Are Currently Losing This Battle”.
NFT & metaverse update 🐵
- The Sandbox to launch metaverse in Dubai and other cities around the globe.
- Warning: 25 million APE tokens about to be unlocked.
It doesn’t look good for Ether’s price despite the flawless Ethereum Merge.
Last week we explored the potential that Ethereum could be a “buy the rumor, sell the news” event, and in the past few days, our worst-case scenario came to fruition.
ETH continues to plummet past its $1,440 support level, and momentum looks to take it past its $1,200 support. Sad to see, but ultimately the fundamentals have improved post-merge. Additionally, while Ethereum remains slightly inflationary, there will come a point in time when the fundamentals catch up to the price. But for now, we’ll have to watch if the support levels control the damage.
Follow me on Twitter for daily updates!
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