A new story from The Defiant - DeFi Podcast

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Yeah. I mean, roughly 200 million was lost in this hack. And Euler actually had insurance through Sherlock, the company that I believe was the last pair of eyes on the particular piece of code that was exploited. And the payout was, I mean, it was less than $5 million. I can't remember exactly how much it was, but it's like, yeah, DeFi insurance programs are far from where they would need to be for me as a user to feel like, okay, I'm good. I can trust this. You know, I get something bad happens. I mean, most of them, they're all not they're all. Most of them are trustworthy. You know, I don't think that they're any blue trip protocol like Euler is a scam at all, but trusting just that there isn't some little thing in the code that somebody could find. Yeah, and insurance would go a long way to helping that, but I don't know of any. Crypto insurance business that that's ready to make people whole when you have these 7, 8 figure hacks. I mean, that's amazing. Oh, go ahead. Sorry. I mean, you have protocols like nexus mutual and stuff, where you can get insurance. But of course, they can't run. They're not able to operate at scale. So it's not like making 200 million hole. It would be as an individual user if you wanted insurance. You could have maybe bought some. I'm not sure if user was covered. Or they had a policy for that. But generally, the issue is scale, right? So most of the coverage is already all taken up. It's very hard to buy coverage at size. And they've been a lot of, if not scams, then disappointments in the insurance space as well. So we had cover protocol that very famously imploded after the dev team walked away. And a couple of others, what was the other one that was, I think it was called out as a scam or something happened, was it armor, maybe, or something like that? So yeah, like you said, the industry definitely has to mature. And I mean, it's great to be able to use these different money Legos to structure transaction or do what you want to do. But yeah, safety with each additional smart contract comes that additional risk that there might just be a loophole in that particular one that in order to miss the team missed everyone missed and then that allows the malicious attacker to sneak his way in and then drain the whole protocol. So yeah, the risk is definitely still outsized. I mean, I wouldn't, I mean, the biggest proponent of DeFi to everyone. But I still wouldn't tell my dad, you know, put your savings account money into a way or something. Even though it's proven to be. You know, it has Dutch wood hasn't been exploited, but you never know right. It's all code at the end of the day and as someone who doesn't understand the code myself, it's very hard for me to take a call and say, oh, you know what this code looks safe to me. So yeah, I'm just going to say before that, it's pretty amazing to me that it's still the OG DeFi protocol. Uniswap. The ones that are still unscathed and standing on haven't been hacked. That is amazing. Yeah, like when you iterations are, I don't know if it's because they're adding more complexity, taking on more risk. But the OGs, you know, the first one to try. Or at least the first one to succeed in DeFi. You remain there. Are still kind of the safest. Let's not jinx it. I have a lot of money on you and swap. Knocking on right now. Okay, so we're running out of time, but let's wrap up with the last big story of the week. We Ethereum chapter upgrades. I like to walk us through this. Sure. And just to, I guess, be quick about it and also, I'm not a technical guy, so I can't really explain what exactly happened, but basically they've been, they've been building this very important upgrade for Ethereum, right? So just a little bit of context, Ethereum, everybody listening to this probably knows switch from proof of work to proof of stake last year, changing the way that it orders and confirms transactions so that it would slash its energies by 99%. Proof of stake requires that users deposit 32 eth in order to become one of the validators that contributes to the ordering and confirming of transactions. And there are a lot of proof of stake blockchains out of that right now. Solana is one of them and just about all of them when you put money into become a validator. Well, you can also take it out if you so choose, right? You're not locking your eth up for all time right now with Ethereum. You actually can't withdraw your stake. The proof of stake engine that's running within Ethereum went live back in December 2020 and has been running was running in parallel with the actual Ethereum proof of work blockchain since then. So there are people who staked as far back as 2020 whose eth has been locked in there. They can't withdraw it. They can't cash out, they can't use it in other DeFi protocols. Obviously, it's a really big deal to enable withdrawals. So the next big Ethereum upgrade the last one was the merge went switch to proof of stake the next big one is called Shanghai. That was always planned to drop sometime in the spring of 2023. Ethereum's distributed group of developers has been working on this technology. They've been testing it kind of bulletproofing it. And some of those final steps happened earlier this week. And in fact, the development

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