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August 03, 2022

Ember Nuggets #40 | $190M+ Lost in Nomad Bridge Exploitation

Curious to know how long the relief rally will last? Check out our friend DataDash’s take here + an updated review of the Ember Fund app:

How Long Can Bitcoin's Relief Rally Really Last? (Featuring Ember Fund Review 2022)

Nugget #1: Nomad Bridge Hacked and $190M+ lost

The Nomad Bridge has been hacked and it seems the hackers exploited a function within the contract and pulled $190M+ over a few hours with multiple transactions on wBTC, ETH, USDC, and other tokens. Nomad bridge allows users to bridge assets from ETH to Evmos, AVAX, Moonbeam, and other chains. The issue with bridges is that the original assets remain sitting in a contract, that can be exploited, while the synthetic assets on the new chain are used and traded. It’s not the same as using ETH on ETH, as it's storing ETH on Nomad, and then Nomad gives you aETH to use on AVAX (oversimplified). This is becoming an issue for the nascent space as Nomad is not the first bridge to be hacked. Long-term, we will need a safe solution to solve the highly fragmented liquidity issues we currently have driven by multiple competing chains.

To be safe, it may be best to use native assets and avoid bridges when possible.

Nugget #2: Tiffany & Co. launching a high-end NFT

For all intents and purposes, it may be a bear market, but that’s not preventing companies from continuing to build, innovate, and enter the crypto space. Over the weekend, Tiffany’s, a luxury jewelry company, announced NFTiff. The NFT will cost 30ETH to mint and will have a limited run of 250.

The NFT will launch on ETH and anyone can mint the pass, however, only CryptoPunk holders can redeem the NFT for a custom pendant. From the FAQ on their website:

“Tiffany & Co. designers will interpret each CryptoPunk into custom-designed pendants – converting the 87 attributes and 159 colors that appear across the collection of 10,000 CryptoPunk NFTs to the most similar gemstone or enamel color.”

The pendant would effectively cost $48,000 based on the current ETH price. CryptoPunks saw a huge surge in volume after the announcement spiking almost 18x over the past 24 hours. The floor price is relatively stable at around 74E. All-in, an outsider would need to spend 104E ($173,455 at the time of writing) for a Punk and NFTiff – what do you think?! Seems like a bargain :D

Of course, if you don't feel like throwing down ~$173,455 for this high-end NFT, you could always spend as little as $10 to invest in our Top NFT Index - which has a 77% allocation in CryptoPunks!

Nugget #3: Macro Market Update

The macro market has been a bit more positive as of late with the stock market rallying over the past few weeks, and in turn, helping push crypto up from its recent lows. The total market cap for crypto has pushed up ~10%+ from its recent lows with ETH and BTC both off their recent lows. ETH was most recently trading at ~$1,600, while BTC is ~$23,000. The market seems to think the “bad news” phase may be over with most of the washout post the LUNA/3AC collapse and bankruptcies of Celsius and Voyager. We remain cautious, especially after another 0.75% rate hike by the Fed last week, inflation still being well over 9%, and potential weaknesses in the global market.

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