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By Edgy - February 24, 2025

Biggest Hack in Crypto History

North Korea just wrecked crypto.

What happened? Last Friday, Hackers stole ~$1.5 billion from Bybit, one of the leading exchanges in the world.

It was a front-end spoofing exploit. The attackers tricked Bybit’s multi-sig signers into approving what looked like legitimate transactions. But behind the scenes, those transactions were funneling funds straight to the hackers.

This was an opsec error from Bybit. They signed a transaction without carefully checking what they were signing. (On a side note: make sure to double-check when you sign any major transaction.)

Crypto’s chief detective, ZackXBT, soon found the culprit. (He found it within 4 hours of an Arkham Bounty being posted. Respect.)

It was Lazarus Group, the state-sponsored North Korean hacking group. These hacked funds are even used to fund North Korea’s terrorist activities.

Despite being the biggest hack in crypto history, Bybit actually handled things pretty well.

Processed all the withdrawal requests effectively.
They were transparent and effectively communicated to the public.
Bybit has already fully replaced the $ETH required to back customer claims 1:1.
Coordinated with many other teams to freeze $42.89M of the hacked assets. But this is a drop in the bucket for the total amount.
They’ve pledged 10% of the recovered money to anyone who helps in recovering it. But if I’m being honest, that money is long gone.

On the other side, hackers weren’t sitting idle either. Everything they hacked was $ETH or its derivatives like $stETH & $cmETH.

Moved assets to many different wallets.
Converted some assets into Bitcoin.
Bridged some into Solana and tried laundering it using Pump.fun memecoins.

If you want to track the hacker’s movements,

Use Measleuth link to track funds.
Bybit hacker is labeled on Arkham Intelligence as well.

But the most surprising outcome of the hack was the FUD against Ethereum.

Arthur Hayes sparked it. He suggested Ethereum should hard fork to recover funds from North Korea. He cited 2016 DAO Fork as the precedent for this.

BTC Maxis used it as the justification. They claimed that Ethereum is funding North Korean terrorism. Some even asked govt. to take legal action against Vitalik.

In fact, it isn’t practical for Ethereum to recover the funds. In order to do that, >6k nodes across the world have to update their Ethereum Validators to a new version that restores funds. The probability of Ethereum protocol developers writing this code and >6k nodes accepting is zero.

BTC Maxis were calling for the fork cuz they don’t believe Ethereum is decentralized. And it was a poor attempt to hurt ETH’s monetary premium.

Obviously, Ethereum is decentralized. So the FUD didn’t do much to hurt Ethereum. It just exposed outdated views of many BTC maxis.

This will be a major event in crypto history. But for us, life will move on as is.

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Hot Ecosystem

Sonic Ecosystem: The Next Big Thing?

While most of crypto is losing steam, one ecosystem is seeing explosive growth.

Here’s the TVL by chains:

Sonic is the upgraded version of Fantom. It was one of the biggest L1s in the 2021 cycle (it reached 8b in TVL). We’ve covered it before.

In terms of performance, it’s on par with Solana. It boasts over 10k transactions per second and sub-second finality. Since it’s EVM, it has a highly developed ecosystem for developers as well.

Additionally, it pays 90% of gas fees to the respective application developers. It’s attracting developers to the chain. The airdrop incentive program is attracting users as well.

All of it is paying off. The metrics are pumping across the board.

>$43M in net bridge inflows.
The stablecoin market cap increased by 137% in the last week.
In the last 30 days, the Total Value Locked grew by 230% to $730M.
Trading activity is also picking up. In February, it did $1.52B in volume.
In the broader sea of red candles, the native token of Sonic is up 112%.

So, the Sonic ecosystem is clearly taking off. Even the TVL of old protocols like Beets are at all-time highs. But today, I want to focus on new protocols that have gotten traction.

(I’m telling you about them – I’m not shilling)

#1. Shadow Exchange.

Every new chain will need some foundational DeFi primitives like DEX & Money markets. Betting on a promising native DeFi primitive is a reliable strategy.

Shadow Exchange is a new successful DEX that’s native to Sonic. It has been live only for two months. But they’ve already posted impressive numbers:

They’ve collected ~$3.7 million in fees alone.
It grew to $154M in TVL in just two months.
~1640 token pairs have already been created.
Cumulative volume on Shadow is close to $1 billion.

The DEX is very capital-efficient as well. It allows users to create “concentrated liquidity pools”, which allows liquidity providers to earn more money by actively managing liquidity.

Additionally, its token uses a variant of the ve(3,3) model. It aligns traders, liquidity providers, and token holders.

If you want to learn more about the exchange

Check out the documentation for technical details.
This Dune Dashboard for a lot of data on the exchange.

#2. Eggs Finance

Danger alert: this is a Ponzi-ish project. Kinda reminded me of OHM from the last cycle.

Their goal is to make $EGGS a reserve currency, a fancy term for a token that’s designed to only go up over time. The users can

Mint $EGGS by depositing $S.
Redeem $EGGS by “selling” it for $S.
Borrow $S by using $EGGS as collateral.
Use leverage loop by swapping $EGGS for $S and borrowing again.

$EGGS maximum supply is limited to 100B. Every action you take on the protocol either burns $EGGS or accrues fees for it. This means that the token is deflationary and the protocol treasury will keep increasing.

So relative to $S, $EGGS value will always increase.

The project already has some traction. According to their website,

Burned 12.63B $EGGS
89.64M $S have been borrowed
The total Value Locked on the platform is $86.33M

A deep dive on Eggs is already live on my new platform: The DeFi Edge Pro. If you want my full thesis on the project, we’ll open access soon.

#3. Metropolis DEX

It is another DEX on Sonic. Currently, it has ~$11.6M in TVL.

But it has technical differences with the Shadow Exchange we covered earlier. Instead of concentrated liquidity MM, it uses Dynamic Liquidity Market Makers. Rather than a specified curve of concentrated liquidity, LPs provide liquidity to discrete bins.

We don’t need to get into technical nuances, But there are two main benefits of DLMM: zero slippage trades and higher yields for liquidity providers.

There are many more projects on Sonic. If you explore the ecosystem, you’ll find more interesting ones.

If you’re itchy to get in on some action, Sonic seems the be one of the few places worth being in right now.

Agent Arena

Ai16z community introduced CLANK TANK. It’s a weekly game show where you try to impress AI judges with your pitches.

Freysa launched a new experiment. It asks users to create a digital twin and compete in a town hall for a $120K prize.

Spore.fun introduced ChaosChain. It talks about AI that produces blockchain blocks.

SwarmNode announced support for on-demand PostgreSQL databases for AI agents. It’ll allow agents to handle complex data, remember more, and tackle real-world business tasks.

DeFi Catalysts

Pump.fun is working on its own AMM liquidity pools. This will allow them to control more of the stack and capture more value.

MakerDAO is undergoing a power struggle between Rune and Paper. There were accusations of planning a governance attack and more.

Ondo Finance has expanded OUSG to Assetera, Europe’s first MiFID-licensed marketplace for blockchain-based securities.

DeBridge Finance has launched dePort. It’s a token custody solution that allows anyone to bring any token from all supported chains to HyperEVM.

Vertex Protocol introduced the isolated margin. Users can now trade isolated perps seamlessly alongside your unified cross-margin account.

Hyperlane is now live on Bittensor. It is the first interoperability solution on Bittensor.

Curve Finance founder Michael Egorov is working on a new project: Yield Basis. He’s aiming to solve impermanent loss.

Ethereum Foundation announced Open Intents Framework. It’s goal is to make it seamless for any chain to get intents into the hands of users & improve cross-chain UX.

Ox.Fun, an exchange from 3AC founders Su Zhu and Kyle, is rumored to be insolvent. Some people have complained about the inability to withdraw funds.

Truemarkets, a new prediction market, will launch the application and tokens on March 10th. Liquidity incentives will begin 12 hours after the launch.