The Wintermute Hack and BitDAO - An analysis

Sep 20, 2022

The Wintermute Hack and BitDAO - An analysis

Sep 20, 2022

The Wintermute Hack



Wintermute is a company that provides liquidity to various exchanges, including Coinbase and Binance. Recently, it suffered a hack in which $160 million was stolen from its decentralized finance (DeFi) operations. The hack occurred through the use of a tool called Profanity, which allows users to generate vanity addresses with personalized human-readable messages. The hacker was able to recover private keys from any vanity address generated with Profanity and used them to drain Wintermute's vault.


Despite the significant loss, Wintermute's CEO has stated that the company remains solvent, with $320 million in equity remaining. In the wake of the hack, Wintermute's website experienced an increase in organic searches, overall rank, unique visitors, and average visit duration. It remains to be seen whether this increased engagement will translate into more users and protocols discovering Wintermute, or whether there will be a loss of trust that causes users to leave the platform.


In the short term, Wintermute's operations will likely face disruptions as the company works to return to normal. The CEO's quick and transparent communication about the hack, including a clear explanation of what happened and the financial details of the company, has been commended. It will be interesting to see how Wintermute recovers from the hack in the long term and whether the increased engagement and potential new users will outweigh the financial loss.



BitDAO


BitDAO is a decentralized autonomous organization (DAO) focused on funding projects in the Web 3.0 space that support the growth of open finance and decentralized, tokenized economies. It is governed by its $BIT token holders, who use the token to vote on investment proposals and allocate funds from the DAO treasury. The BitDAO treasury currently has around $2.3 billion in assets, which are funded through pledged contributions from Bybit, specialized autonomous entities, token swaps and deals, and yield strategies.


BitDAO was created by Bybit, a cryptocurrency exchange, and launched in August 2021 after raising $230 million in a June 2021 funding round featuring investors such as Peter Thiel, Founders Fund, and Pantera Capital. In August 2021, it raised an additional $365 million on SushiSwap's MISO platform, selling BIT tokens to over 9,000 people.


BitDAO's investment portfolio includes individual projects such as Paradigm and Africa DAO, as well as other DAOs like G7 DAO, zkDAO, Edu DAO, and Pleasr DAO. It also engages in token swaps, such as exchanging BIT for FTT. The DAO treasury has grown significantly in the past year, with a significant portion of its funding coming from Bybit, which directs 2.5 billion of its trading revenue toward the BitDAO treasury.


There are concerns about the centralization and regulatory risk associated with the fact that Bybit controls 60% of the supply of BIT tokens and provides a significant portion of the funding for the BitDAO treasury. Holding BIT tokens may also be seen as an indirect call option on Bybit's success.


Overall, BitDAO allows anyone to participate as a limited partner in a crypto infrastructure venture fund, which is typically a privilege reserved for wealthy and elite institutions. It remains to be seen if BIT token holders will see similar returns as traditional VC LPs.


Sources:


https://openorgs.info

https://messari.io/asset/bitdao/profile…

https://thedefiant.io/bitdao-thiel-pantera-treasury…

https://docs.bitdao.io

https://en.whotwi.com/wintermute_t/followers

https://rekt.news/wintermute-rekt-2/

https://www.semrush.com/analytics/traffic/overview/?q=wintermute.com

https://cointelegraph.com/news/profanity-tool-vulnerability-drains-3-3m-despite-1inch-warning

The Wintermute Hack



Wintermute is a company that provides liquidity to various exchanges, including Coinbase and Binance. Recently, it suffered a hack in which $160 million was stolen from its decentralized finance (DeFi) operations. The hack occurred through the use of a tool called Profanity, which allows users to generate vanity addresses with personalized human-readable messages. The hacker was able to recover private keys from any vanity address generated with Profanity and used them to drain Wintermute's vault.


Despite the significant loss, Wintermute's CEO has stated that the company remains solvent, with $320 million in equity remaining. In the wake of the hack, Wintermute's website experienced an increase in organic searches, overall rank, unique visitors, and average visit duration. It remains to be seen whether this increased engagement will translate into more users and protocols discovering Wintermute, or whether there will be a loss of trust that causes users to leave the platform.


In the short term, Wintermute's operations will likely face disruptions as the company works to return to normal. The CEO's quick and transparent communication about the hack, including a clear explanation of what happened and the financial details of the company, has been commended. It will be interesting to see how Wintermute recovers from the hack in the long term and whether the increased engagement and potential new users will outweigh the financial loss.



BitDAO


BitDAO is a decentralized autonomous organization (DAO) focused on funding projects in the Web 3.0 space that support the growth of open finance and decentralized, tokenized economies. It is governed by its $BIT token holders, who use the token to vote on investment proposals and allocate funds from the DAO treasury. The BitDAO treasury currently has around $2.3 billion in assets, which are funded through pledged contributions from Bybit, specialized autonomous entities, token swaps and deals, and yield strategies.


BitDAO was created by Bybit, a cryptocurrency exchange, and launched in August 2021 after raising $230 million in a June 2021 funding round featuring investors such as Peter Thiel, Founders Fund, and Pantera Capital. In August 2021, it raised an additional $365 million on SushiSwap's MISO platform, selling BIT tokens to over 9,000 people.


BitDAO's investment portfolio includes individual projects such as Paradigm and Africa DAO, as well as other DAOs like G7 DAO, zkDAO, Edu DAO, and Pleasr DAO. It also engages in token swaps, such as exchanging BIT for FTT. The DAO treasury has grown significantly in the past year, with a significant portion of its funding coming from Bybit, which directs 2.5 billion of its trading revenue toward the BitDAO treasury.


There are concerns about the centralization and regulatory risk associated with the fact that Bybit controls 60% of the supply of BIT tokens and provides a significant portion of the funding for the BitDAO treasury. Holding BIT tokens may also be seen as an indirect call option on Bybit's success.


Overall, BitDAO allows anyone to participate as a limited partner in a crypto infrastructure venture fund, which is typically a privilege reserved for wealthy and elite institutions. It remains to be seen if BIT token holders will see similar returns as traditional VC LPs.


Sources:


https://openorgs.info

https://messari.io/asset/bitdao/profile…

https://thedefiant.io/bitdao-thiel-pantera-treasury…

https://docs.bitdao.io

https://en.whotwi.com/wintermute_t/followers

https://rekt.news/wintermute-rekt-2/

https://www.semrush.com/analytics/traffic/overview/?q=wintermute.com

https://cointelegraph.com/news/profanity-tool-vulnerability-drains-3-3m-despite-1inch-warning

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The content made available on this web page and our mobile applications ("Platform") is for informational purposes only. You should not construe any such information or other material as financial advice in any way. All information provided on the Platform is provided on an as is and available basis, based on the data provided by the end user on the Platform. Nothing contained on our Platform constitutes a solicitation, recommendation, endorsement, or offer by us or any third-party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All content on this Platform is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the Platform constitutes financial advice, nor does any information on the Platform constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the platform before making any decisions based on such information. In exchange for using the Platform, you agree not to hold us, our affiliates, or any third-party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the Platform.

2261 Market Street,

San Francisco, CA 94114

Loch, Inc. © 2023

The content made available on this web page and our mobile applications ("Platform") is for informational purposes only. You should not construe any such information or other material as financial advice in any way. All information provided on the Platform is provided on an as is and available basis, based on the data provided by the end user on the Platform. Nothing contained on our Platform constitutes a solicitation, recommendation, endorsement, or offer by us or any third-party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All content on this Platform is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the Platform constitutes financial advice, nor does any information on the Platform constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the platform before making any decisions based on such information. In exchange for using the Platform, you agree not to hold us, our affiliates, or any third-party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the Platform.

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San Francisco, CA 94114