THE HACK ON BNB BLOCKCHAIN
Prior to learning about the two macroeconomic developments that ultimately had an impact on the cryptocurrency market some weeks back, the crypto market was showing some signs of life. The market is impacted by the Opec plan to reduce oil production by 2 million barrels per day. Naturally, this reduction in supply will cause inflation to rise globally, and as a result, the federal reserve will be forced to keep raising interest rates to combat inflation. Because so many people will sell their assets for cash, raising interest will have a wide range of effects and create further asset crashes.
Even if people keep selling their assets for cash, a large portion of that money will still go to the government due to the high interest rates. Another significant element that affected the cryptocurrency market last week was the US unemployment numbers for September, which showed a decrease in the jobless rate to 3.5%. Despite falling to 3.5%, the U.S. unemployment rate still did not reach the FED's target, hence the FED will keep raising the hike rate. Because investors always try to price in what will happen over the following six months, the cryptocurrency market still declines when the unemployment rate lowers to 3.5%.
One significant factor that has been weighing on the cryptocurrency market is regulation. This week, one organization plans to draft regulatory proposals for cryptocurrency. Although the exact release date of these proposals is unknown, all nations will be required to abide by them. Some of the worries about crypto legislation relate to on-chain censorship. On-chain censorship is the process by which validators impose their nation's laws on the blockchain they are securing.
Ethereum started censoring authorized transactions, or those that used tornado cash. Currently, roughly 45% of Ethereum validators are blocking transactions using tornado currency, and every Ethereum validator using flash boats has probably been blocking transactions involving tornado cash as well. If this on-chain filtering results in KYC requirements for Ethereum wallets, I won't be shocked.
A few days ago, the BNB chain was hacked, with 600 million dollars being stolen, but only roughly 100 BNB were lost in the theft. The worst thing the hacker did was use a bug in the bridge connecting the beacon chain and Binance Smart chain to generate 2 million BNB out of thin air. The hack then borrows various stablecoins using the stolen BNB using the decentralized finance system. They thereafter transferred these various stablecoins to other cross-chain bridges and exchanged them for other cryptocurrencies. Because there are only 25 validators in the BNB chain, they were forced to shut down the BNB so they could plan their next move. This was a very simple process.
There are always wield things happening in the crypto space. Thanks for sharing this interesting content.
shocking news.