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In a recent incident, MEV bots attempting sandwich trades suffered a massive loss of $25 million in digital assets due to a rogue validator. The bots were trying to execute sandwich transactions, which involves intercepting a trader’s transaction to profit from it. However, as the bots began to swap millions, the reverse transactions were replaced by a validator who went rogue, resulting in significant losses.

The losses included $1.8 million in Wrapped Bitcoin (WBTC), $5.2 million in USD Coin (USDC), $3 million in Tether (USDT), $1.7 million in Dai (DAI), and $13.5 million in Wrapped Ether (WETH). At the time of writing, most of the funds had been transferred to three different wallets.

In a Twitter thread, blockchain security firm CertiK explained that the vulnerability was due to the centralization of power with validators. As the MEV bots tried to perform front-run and back-run transactions for profit, the rogue validator swooped in to back-run the MEV’s transaction, resulting in significant losses.

The attack highlights the risks associated with MEV bots, despite their potential to earn vast amounts of digital assets. MEV bots have become increasingly popular in the crypto market, as they can execute complex trading strategies with speed and accuracy. However, they are also vulnerable to hacks and exploits, as seen in previous incidents.

CertiK warned that this attack could affect other MEV searchers conducting strategies such as sandwich trading. The team noted that there is a possibility that MEV searchers may become wary of non-atomical strategies due to this exploit.

The CertiK team emphasized the need for greater decentralization to reduce the vulnerability of validators to such attacks. This incident underscores the importance of blockchain security and the need for continuous monitoring and upgrading of security protocols to prevent such incidents.

In conclusion, the attack on MEV bots attempting sandwich trades by a rogue validator resulted in significant losses of $25 million worth of digital assets. The vulnerability was due to the centralization of power with validators, highlighting the need for greater decentralization to reduce the risks associated with such attacks. This incident underscores the importance of blockchain security and the need for continuous monitoring and upgrading of security protocols to prevent such incidents.

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Rogue Validator Outsmarts MEV Bots, Resulting in a $25 Million Loss Republished from Source https://blockchain.news/news/rogue-validator-outsmarts-mev-botsresulting-in-a-25-million-loss via https://blockchain.news/RSS/

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Italy’s decision to ban the Microsoft-backed AI chatbot, ChatGPT, has caused controversy within the tech industry and the country. The Italian deputy prime minister, Matteo Salvini, criticized the ban as excessive and potentially damaging to national business and innovation.

The ban followed concerns raised by Italy’s national data agency about possible privacy violations and failure to verify the age of users. On Friday, March 31, OpenAI took ChatGPT offline in Italy, making it the first Western country to take measures against the AI chatbot.

Salvini expressed his thoughts on the ban through a post on Instagram, stating that he found the decision of the Privacy Watchdog that forced #ChatGPT to prevent access from Italy disproportionate. He also argued that dozens of services based on artificial intelligence are currently in operation, and therefore, common sense needs to be exercised, as privacy issues concern practically all online services.

Furthermore, Ron Moscona, a partner at the international law firm Dorsey & Whitney and an expert in technology and data privacy, said the ban by the Italian regulators was surprising, as it is unusual to completely ban a service due to a data breach incident.

OpenAI has stated that it adheres to privacy regulations in Europe and is willing to cooperate with Italy’s privacy regulatory body. The company takes measures to minimize personal data when training its AI systems, including ChatGPT, as its goal is for the AI to acquire knowledge about the world, not to obtain information about specific individuals.

While the ban could harm national business and innovation, Salvini hopes that a rapid solution will be found, and ChatGPT’s access to Italy will be restored. “Every technological revolution brings great changes, risks, and opportunities. It is right to control and regulate through international cooperation between regulators and legislators, but it cannot be blocked,” he said.

The AI chatbot is also under scrutiny in other regions worldwide. The Center for Artificial Intelligence and Digital Policy (CAIDP) lodged a complaint against ChatGPT on March 31, intending to prevent the deployment of potent AI systems to the general public. The CAIDP characterized the chatbot as a “biased” and “deceptive” platform that jeopardizes public safety and confidentiality.

In conclusion, the ban on ChatGPT in Italy has created significant controversy within the country and the tech industry. While concerns about privacy and age verification have been raised, the ban has also been criticized as excessive and potentially harmful to national business and innovation. OpenAI has stated that it adheres to privacy regulations in Europe and is willing to cooperate with Italy’s privacy regulatory body. The debate over the regulation of AI chatbots continues worldwide, with concerns about public safety and confidentiality at the forefront.

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Italy Bans Microsoft-Backed AI Chatbot Republished from Source https://blockchain.news/news/italy-bans-microsoft-backed-ai-chatbot via https://blockchain.news/RSS/

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Decentralized multichain digital wallet solution BitKeep Wallet has announced that it has surpassed 10 million users as of April. The platform has seen tremendous growth in recent months, with over 560,000 new users onboarded in March alone. This growth can be attributed to the success of BitKeep’s campaigns with popular blockchains like Arbitrum and Sui.

The recent Arbitrum campaign was a significant contributor to BitKeep’s surge in user numbers. The campaign involved the successful launch of ARBK, which recorded 708,800 on-chain transactions and was airdropped to over 100,000 users participating in campaign-related tasks and activities. ARBK was exchangeable for ARB, the official native token of the Arbitrum chain, and ranked first on Arbitrum’s ecosystem popularity chart with 150,000 token-holding addresses and an interaction volume of 330,000.

In light of BitKeep’s recent success, cryptocurrency derivatives exchange Bitget has invested $30 million into the platform. As a result of the investment, BitKeep will be rebranded as Bitget Wallet, but will continue to function as an independent entity both operationally and structurally. BitKeep will focus on building its ecosystem and independent tokenomics while protecting the rights and interests of existing BitKeepers and BKB holders during the transition process.

BitKeep Wallet’s success can be attributed to its multichain digital wallet solution, which allows users to manage their digital assets across various blockchains seamlessly. BitKeep currently supports over 20 public chains, including Ethereum, Binance Smart Chain, Polkadot, and more. This versatility has made BitKeep an attractive option for many crypto investors and traders looking for a user-friendly and secure wallet solution.

In addition to its digital wallet offering, BitKeep has also launched BitKeep Defi, a decentralized finance platform that allows users to access a variety of DeFi services, including staking, lending, borrowing, and more. BitKeep Defi aims to create a more accessible and user-friendly DeFi ecosystem, making it easier for everyday users to participate in the world of decentralized finance.

The investment from Bitget will enable BitKeep to continue to innovate and expand its offerings, providing users with even more options for managing their digital assets. The rebranding to Bitget Wallet will also help to solidify BitKeep’s position as a leading player in the digital wallet space, with a focus on providing users with a seamless and secure experience across multiple blockchains.

In conclusion, BitKeep Wallet’s recent announcement of surpassing 10 million users and the investment from Bitget marks a significant milestone for the platform. With its user-friendly multichain digital wallet solution and BitKeep Defi platform, BitKeep is well-positioned to continue its growth and innovation in the crypto space.

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BitKeep Wallet Surpasses 10 Million Users Republished from Source https://blockchain.news/news/bitkeep-wallet-surpasses-10-million-users via https://blockchain.news/RSS/

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Bitcoin (BTC) has seen a significant price surge of 45% in 2023, making it one of the best-performing assets in recent times. However, despite the bullish quarter in terms of price gain, BTC’s liquidity has dropped to a 10-month low. The liquidity dry-up is partly attributed to the ongoing financial crisis in the traditional financial market and regulatory actions against crypto companies.

The current financial crisis has caused several banks to collapse, which has directly impacted the crypto ecosystem. In particular, the collapse of crypto-friendly banks such as Silicon Valley Bank and Signature Bank has removed crucial U.S. dollar payment rails for crypto, leading to a liquidity crisis, especially on U.S. exchanges. This, in turn, has led to increased price volatility, forcing traders to pay more fees in slippage.

Slippage refers to the price difference between the expected price of a transaction and the price at which it is fully executed. For instance, for a $100,000 sell order, the slippage for the BTC/USD pair on Coinbase climbed by 2.5 times at the beginning of March. During the same time frame, Binance’s BTC/USDT pair’s slippage barely moved.

The liquidity crunch has also led to higher price volatility on U.S. exchanges, where the price discrepancy between BTC and U.S. dollar pairs has increased drastically compared with non-U.S. exchanges. For example, the price of BTC on Binance.US is more volatile than the average price across 10 other exchanges.

Conor Ryder, research head of on-chain data analytics firm Kaiko, explained the drastic impact of the liquidity crisis on traders and the market. He noted that stablecoins are replacing U.S. dollar pairs, and although it lessens the impact of U.S. banking troubles, it has an adverse effect on liquidity in the United States. He added that it would indirectly harm investors there.

Despite the regulatory actions taken against crypto companies, the price of Bitcoin has remained relatively strong, outperforming traditional assets such as stocks and bonds, which have seen one of their worst years. However, the liquidity crisis has undoubtedly impacted the market, and it remains to be seen how it will evolve in the coming months.

In conclusion, Bitcoin’s liquidity drop despite its price surge is a concerning development for traders and investors alike. The ongoing financial crisis and regulatory actions against crypto companies have led to a liquidity crunch, causing increased price volatility and higher fees for traders. As the market evolves, it will be interesting to see how BTC’s liquidity and price behave in response to the changing market conditions.

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Bitcoin Liquidity Drops Despite Price Surge Republished from Source https://blockchain.news/news/bitcoin-liquidity-drops-despite-price-surge via https://blockchain.news/RSS/

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Vitalik Buterin, the co-founder of Ethereum, has suggested implementing zero-knowledge Ethereum Virtual Machines (zk-EVMs) on the Ethereum base layer to accelerate the verification process on the blockchain. Buterin’s proposal seeks to solve “The Verge,” a part of the Ethereum roadmap that aims to make verification at the base layer easier.

In a post on March 31, Buterin explained that it is possible to integrate a zk-EVM on the base layer without compromising on decentralization and security. The technology enables Ethereum Virtual Machines to execute smart contracts on the blockchain with ZK proofs. Ethereum was developed with a “multi-client philosophy” to ensure decentralization at the protocol level. By integrating zk-EVMs at the Ethereum layer 1, it would be the third type of client, along with the consensus and execution clients.

Buterin considered the advantages and drawbacks of treating the layer 1 as a “clearinghouse” by pushing almost all activity to layer 2. He concluded that many layer 1-based apps would become “economically nonviable” and that small funds worth a few hundred dollars or less may get “stuck” in the event that gas fees grow too large.

Buterin prefers the zk-EVM approach because it wouldn’t abandon the “multi-client” paradigm, and an open zk-EVM infrastructure would ensure that new clients could be developed, which would further decentralize Ethereum at the base layer. In his post, Buterin explained that zk-EVMs would need to be “open” in that different clients each have different zk-EVM implementations and each client waits for a proof that is compatible with its own implementation before accepting a block as valid.

The implementation of zk-EVMs at the Ethereum layer 1 could cause data inefficiency and latency issues, but Buterin believes these challenges would not be “too hard” to overcome.

In conclusion, Buterin’s proposal for zk-EVMs on the Ethereum base layer seeks to accelerate the verification process while maintaining decentralization and security. The integration of zk-EVMs at the Ethereum layer 1 would be the third type of client and ensure that new clients could be developed, further decentralizing Ethereum at the base layer. The proposal is not without its challenges, but Buterin believes that they can be overcome.

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Vitalik Buterin Proposes Zero-Knowledge Ethereum Virtual Machines on Ethereum Layer 1 Republished from Source https://blockchain.news/news/vitalik-buterin-proposes-zero-knowledge-ethereum-virtual-machines-on-ethereum-layer-1 via https://blockchain.news/RSS/

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