OpenSea phishing, tech giants unite, and the crypto Web2 security problem

Since the all-time highs of November 2021 most Crypt metrics have plummeted But one important indicator for layer 2os tlv has Doubled good morning you're listening to The rise and crypto podcast by coin Telegraph with me Robert bags steering You through the crypto Cosmos with daily Dispatches from the digital Frontier if You want to stay ahead of the curve in Crypto make sure you click that follow Button grab yourself a coffee and let's Get into it Okay firstly let's do a quick rundown of What we will be covering today first up Is the Microsoft 10cent and other Tech Giants banding together to decentralize The infura network we have the total Locked value in layer 2's doubling since The bll Run nearly half of all crypto Loss to exploits was due to web 2 Security issues a US House Financial Services subcommittee hearing discusses Allegations of Hass crypto fundraising And openc users are being bombarded with Fishing attempts with a worrying Twist first up let's have a look at the Most eye-catching headline Microsoft Tensen and other Tech Giants join Decentralized infura Network an article By Tom Mitchell Hill the infura network Is the key point of access to ethereum For the bulk of the defi sector and any Issues infura suffers many major players

In defi suffer too one of the flaws of Infura is just how centralized the tech Is which is what the flagship Partnership ship between these Tech Firms and consensus aims to resolve they Want to decentralize every layer of the Blockchain infrastructure stack Tom Spoke to Andrew Breslin the senior Product manager at consensus about the Significance of this move to create the Decentralized infrastructure Network D So the inferior Network partnership with Microsoft tensent and I believe it's 16 Other web 2 uh internet infrastructure Firms is it's a pretty significant deal For the web 3 face more broadly um and This is something that Andrew bresin who Is a senior product manager for the Infer Network said that you know these Partnerships are less about the names Themselves and more about the fact that You have this volume of web 2 companies Aligning with the broader mission to Decentralize blockchain networks more Broadly and so this partnership makes The inferior Network a lot less Centralized now putting that into to Real terms in November 2020 and this is The only time that it's happened but the Infu network suffered an outage and it Caused metamask to go down and so that That kind of highlights the issue here Of if you don't have a decentralized Structure for data providers you end up

With the these potential outages and That's that's really not great so yeah Essentially these firms coming in means That we're going to have more reliable Uptime on blockchain networks across the Board which is really just kind of a net Positive for the Industry crypto and blockchain adoption Is measured in a number of ways with Both Artisan analysts and average Allens Looking at the metrics such as market Cap price and trading volume however There are other fascinating indicators That can be overlooked and one common Statistic for evaluating networks has Just hit an impressive all-time high Tom Blackstone wrote an article yesterday on Data derived from the blockchain Analytics platform L2 beat and it Pertained to the tlv of ler 2 networks Tlv stands for total locked value and it Refers to the value that is currently St Locked or held in smart contracts Protocols and platforms on a layer two Now TV is useful for assessing things Like liquidity trust popularity and risk Among other things but if you zoom out It's also a strong indicator on interest In this case interest in layer 2os L2 Beats data shows 32 layer twos on Ethereum and after hitting 11.8 billion Of tlv across all 32 in April they Declined down to 10 billion by June However as of the 10th of November this

Number has nearly hit $1 13.5 billion Which is an all-time high not an annual High look it's difficult to place these Sorts of figures but one way of Contextualizing it is this in November 2021 when the ball Market was at its Peak and crypt Bros were specking their Porsches in telegram the tlv in all 32 Ethereum layer 2 was just $6 billion Here we are 2 years later looking 12 Years older courtesy of a ruthless Crypto winter and despite prices being Nowhere near those alltime highs we have Over double the tlv why is this the case I pretend you have asked me so we can Seg way to the next Point Elena snova Decentralization coordinator at metis Gave her Theory to coin Telegraph she Said at the time of the bull market Ethereum at peak times was very Non-scalable which meant that Transactions were slow and very Expensive because of the ball Market it Would be hundreds of dollars just in Transaction fees for one transaction so Therefore it was not sustainable of Course scalability was one of the Primary motivations for creating layer 2s however it's not all upsides and I Spoke to Tom about this this is great News for layer 2os however the experts I Interviewed suggested that layer 2 still Face some serious challenges including Ux and security issues Tom's article

Goes into a little more depth on the Challenges ler 2's are facing and some Warnings too so make sure you click that Article in the show notes to read some More okay so we all know crypto is a Space famous for its wild gains and Infamous for its tragic losses sometimes Those losses come from The Chronic lack Of green candles but other times they Come from exploits web 3 hacks and Security vulnerabilities are well Documented but one statistic about this Brand of horror might surprise you this Was another piece Yesterday by Tom Blackstone and it covered a report by by Immune fire a blockchain security Platform their report titled the true Origin of hacks examined the root causes Of these exploits and found Commonalities between them the statistic That is turning heads is that 46.4% of crypto lost from exploits in 2022 were from infrastructure weaknesses Why would this turn heads well put Differently nearly half of all crypto Loss to hacks have been due to web 2 Security issues not flaws inherent to Web three to be clear the 46% is based On the value of crypto lost rather than The number of incidents but even with The number of incidents web 2 issues Ranks second these web two issues are Infrastructure weaknesses and the report Describes them as things like private

Key handling and virtual machines one of The most high-profile cases would be the Ronin Bridge hack in March 2022 and it Is the perfect example what happened was A hacker gained enough control over Nodes to sign a hefty withdrawal of $600 Million worth of mixed crypto the way The hacker did this was essentially Private keys and it's issues like the Handling of private Keys something that Anyone who has used a self- custodial Wallet will be familiar with that feel As if they're web three problems but They aren't they are centralized Elements of a decentralized ecosystem so Reports like this one by immuni are a Stark reminder of just how fetal crypto And web 3 is in the grand scheme of Things since the dawnn of crypto there Has been suggestions of criminal Undercurrents in the industry what is Usually meant by this isn't the large Scale hacks we just spoke of but more Unscrupulous behavior on an individual Level in the early days of Bitcoin it Was used on the online Black Market Silk Road among other darket markets and it Has never really fully shared that image Nevertheless research firms like chain Analysis have created yearly reports and Found that cryptocurrency activity Associated with elicit activities Accounted for only around 0.24% in 2022 And 0.12% in 2021 well the topic has

Risen to a head once again the US House Financial services subcommittee for Digital assets Financial technology and Inclusion wants answers on crypto and Crime after some confusing reports Yesterday Derek Anderson covered a Hearing titled crypto crime in context Breaking down the illicit activity in Digital assets the first point of Coverage in the hearing was the Wall Street Journal article on the 10th of October this year which discussed the Use of crypto by Hass for fundraising Now this article was corrected later in The month after more accurate data was Produced by the blockchain analytics Firm elliptic but the narrative is a Familiar one the chair of this hearing French hill said phone and the internet Aren't to be blamed for teror financing And crypto shouldn't be either the Hearing focused much of its attention on Collaboration to stop the misuse of Digital assets something that most of us I think can agree is desirable despite Spite letters to President Biden signed By 53 house members stating that Traditional fundraising for Hamas could Far exceed what is raised by crypto There is still a lot of confusion around The true extent of the involvement of Digital assets the blockchain Association penned an open letter signed By 40 former members of the US Military

Intelligence Officers and Security Experts which called out the Wall Street Journal article writing that the article Grossly overstated crypto's role and it Is being used to push legislation that Would be counterproductive to US National Security Interests okay and finally we look at This Open Sea story open sea is both the Most famous of the nft marketplaces and The biggest in terms of sales and Traders it is seen as the Hub of nfts And despite several nipping at its heels Openc is still Top Dog however users are Currently reporting a massive email Fishing campaign and it is no amateur Effort Helen s wrote yesterday that Multiple social media reports from Open Seas users and developers suggest they Are being targeted by a variety of Advanced email fishing efforts one of These was a fake developer account risk Alert the user called quantity an open SE developer received a convincing Fishing email claiming a smart contract Vulnerability affecting the Open Sea Developer community that in itself isn't All that peculiar what was far more Worrying is that quantity says that Their email that they use use for openc Is strictly dedicated to their openc API Key as they put it in other words Dev Contacts have been exfiltrated from Openc and are the real Target in this

Campaign now at the same time this is Happening users are also posting to Reddit that they're getting and I quote 3 to four scam and fishing emails a day Which is crazy since I got zero just a Few weeks ago this reddit's fishing Emails were pretending to be offers for Nft listings and then anyone who clicks The links are directed to a malicious App look fishing attempts in crypto are Commonplace and we would all be wise to Be vigilant with everything we click Openc is the biggest nft Marketplace and So it's not surprising that fishing Attempts on openc users is also Commonplace what concerns me though is The suggestion that email addresses that Should be completely hidden are somehow Accessible to the scammers whatever the Case if you use openc please please Please think twice before you click an Email from or relating to the Platform okay that was a bit of a heavy Episode today but consider yourself Informed thank you for listening to the Rise and crypto daily podcast by coin Telegraph if you're enjoying these daily Updates please make sure you let us know By following subscribing or leaving a Review they really help have a great day Let's do this again Tomorrow