Shiba Inu, New’ Dog Coin’ Closes in on Overtaking Dogecoin

Hello as always, and welcome to today’s edition of Overbit Weekly Round Up.

Early on this year, the investing landscape was overtaken by Dogecoin and other “meme” assets. Although these community favourites faded with the rest of cryptocurrency markets back in May, it seems one dog-coin just keeps on running,

Shiba Inu is a meme token that touts itself as a “Dogecoin killer,” according to its website. Its logo is based on the same online meme that Dogecoin is built on, and it features a Japanese Shiba Inu dog.

Unlike Dogecoin, which is a proof-of-work coin, Shiba Inu is built on top of the Ethereum blockchain as an ERC20. Though not heavily utilised, this means Shiba Inu can be used throughout the DeFi ecosystem, which tries to mimic traditional financial operations like lending and trading. Similar to Dogecoin, the originator of the Shiba Inu claims to have no tokens. Well, on Wednesday, 27 October, Shiba Inu achieved its goal, at least temporarily, and overtook Dogecoin on the coin market cap rankings.

This run was partly fuelled by the addition of Shiba Inu to the Coinbase platform. Similar to Dogecoin and Robinhood, retail investors flooded Coinbase with demand for the hottest new dog coin.

However, CoinDesk’s recent report indicates it was not just retail driving the insane runup on Shiba Inu. According to Daniel Khoo, a research analyst at blockchain data firm Nansen, addresses identified as “smart money” have been buying up SHIB since the beginning of this week. The majority of the purchases were made in the last seven days, totalling nearly $160 million.

Per Nansen, traders that generated more than $100,000 by providing and mining liquidity in decentralised finance (DeFi) protocols, as well as public bodies that invest in crypto, are among the addresses branded as “smart money.”

“It surprised me,” Khoo remarked, adding that he had not expected “smart money” to accumulate SHIB.

Although some trends in cryptocurrency, like dog-coins, are hard to wrap your head around, stories like this help to remind readers just how much money is always on the side-lines in crypto, waiting to pour into the next hottest thing.

Closing out this week’s edition of Overbit Weekly Round Up, we take a look at yet another hacked DeFi product.

According to reports, Cream Finance, a DeFi protocol based on Ethereum, has been hacked yet again, this time for more than nine figures worth of assets.

This is far from Cream Finance’s first run-in with DeFi exploits, either. In its lifetime, the protocol has been hit by repeated flash loan attacks, losing $37.5 million in February and then another $18.8 million in August. The earliest problems date back to October of last year when there were over-collateralisation issues of FTT, FTX’s exchange token, in the Cream vaults.

According to TheBlock, this most recent exploit on 27 October 2020 totalled more than $100 million dollars, with $92 million was stolen into one address and $23 million into another. Investigations are still underway into the total loss of this exploit.

As has become the norm lately, the hacker jokingly posted on the Ethereum blockchain: “gT Baave, iron bank, and cream are all lucky. ydev: incest is a bad idea, don’t do it.” This looks to be a reference to Aave and Iron Bank, and Cream Finance, which are both DeFi lending platforms.

Despite the growth of cryptocurrency, events like this always remind investors that much of this software is still very much in its infancy, and risk should be managed.

Thanks as always for reading! Don’t forget to check back at Overbit for your latest news, stories and trends in the global markets.

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