Welcome to Finance Redefined, a weekly newsletter providing you with essential decentralized finance (DeFi) insights, designed to bring you the most important developments of the past week.

In this week’s newsletter, the Ethereum staking service has agreed to impose a 22% limit on all validators to ensure a fair market. August proved to be another costly month for DeFi, with a combined $16 million exploited across multiple protocols. In another piece of exploit news, the Balancer protocol lost nearly $900,000 due to a vulnerability flagged a few months ago.

Shibarium’s second release has proven to be more stable, as the Layer-2 protocol already has over 100,000 new wallets, and USD Coin (USDC) will debut on Coinbase’s Layer-2 platform later this week.

The DeFi market saw another bearish decline this weekend as news of the decision to delay the approval of a spot bitcoin spot exchange-traded fund (ETF) sent the overall market down. Most DeFi tokens traded at a loss, and the total value of locked DeFi tokens remained below $50 billion.

Ethereum staking service agrees to 22% limit for all validators

At least five ethereum liquidity staking providers have implemented or are working to implement self-limiting rules in which they pledge not to own more than 22% of the ethereum staking market — a move seen as ensuring that the ethereum network remains decentralized.

According to ethereum core developer Superphiz, ethereum staking providers that have committed or are working to comply with self-limiting rules include Rocket Pool, StakeWise, Stader Labs, and Diva Stake.

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DeFi Hacks Caused $16M in Crypto Losses in August, Report Says

In August in particular, $15.8 million in cryptocurrencies were lost due to DeFi hacks and exploits. According to an Aug. 31 report from blockchain security firm Immunfi, cryptocurrency losses due to hacks, exploits and fraud totaled $23.4 million, a sharp drop from July’s $320.5 million loss. All breaches included attacks against DeFi protocols, and none affected centralized financial entities.

Five of the 21 reported security incidents occurred on the Ethereum blockchain and four on the BNB chain. Coinbase’s highly anticipated layer-2 solution, Base, suffered four security breaches shortly after its Aug. 9 launch.

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Balancer exploited for nearly $900,000 after vulnerability warning

On Aug. 27, the company confirmed on X (formerly Twitter) that Ethereum automated market maker and DeFi protocol Balancer was exploited and lost nearly $900,000, just days after disclosing a massive Vulnerability of a mining pool.

Blockchain security expert Meier Dolev has disclosed an Ethereum address that allegedly belongs to the attacker. Following the breach, the address received two transfers in the stablecoin Dai (DAI) worth $636,812 and $257,527, bringing its total balance to more than $893,978.

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USDC will launch natively on the Base network — Jeremy Allaire

Circle’s USD stablecoin, USDC, will launch natively on the Base network “next week,” according to a social media post from CEO Jeremy Allaire on Aug. 29. The new version will replace the current USDbC that most users rely on.

Coinbase’s Base network launched on August 9th. At the time, no native version of USDC existed on the web. Users cannot deposit cash into a Circle account and receive the equivalent in USDC on Base. To solve this problem, the Base team allows users to bridge USDC from Ethereum through the official bridge app. The token issued by the bridge is called “USDbC” and is backed by native USDC locked on the Ethereum network.

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Shibarium Wallet Breaks 100,000 After SHIB Dev Reboots Bridge

Shibarium, the new layer 2 network for the Shiba Inu (SHIB) token, has surpassed 100,000 wallets on its platform, with 35,000 added within 24 hours of Shibarium’s relaunch on August 28. Shytoshi Kusama, lead developer and co-founder of Shiba Inu confirmed in an August 28 blog post that Shibarium is back up and running.

At the time, Kusama noted that Shibarium counted 65,000 wallets out of 350,000 transactions — however, those numbers have since risen sharply, with increases of 55.8 percent and 20.2 percent, respectively, according to Shibariumscan.io.

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DeFi Market Overview

Data from Cointelegraph Markets Pro and TradingView shows that the top 100 DeFi market capitalization tokens have had a bearish week, with most posting losses on weekly charts. The total value locked in DeFi protocols reached $49.25 billion.

Thanks for reading our roundup of the week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education about this dynamically developing field.

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