Solana MEV bot bags $1.7M, CFTC eyes DeFi risk mitigation: Finance Redefined


Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.

One Solana-based maximum extractable value (MEV) bot made headlines this past week as it raked in $1.7 million in profit from a single trade. Meanwhile, the Near Foundation laid off 40% of its staff despite a solid financial performance, and the United States Commodity Futures Trading Commission (CFTC) seeks to mitigate DeFi risks with the ecosystem’s stakeholders — all of this and more in our weekly DeFi newsletter.

The top 100 DeFi tokens had a bullish week, which was led by the approval of the first Bitcoin (BTC) exchange-traded fund (ETF) in the United States. The total value locked in DeFi protocols also breached $65 billion.

MEV bot pulls $1.7 million profit from a single “inefficient” Dogwifhat trade

A Solana-based MEV bot managed to rake in a staggering $1.7 million from a single questionable trade when a trader made a $9 million purchase of memecoin Dogwifhat (WIF) “in the most inefficient way possible.”

The MEV bot, run by 2fast, swapped 703 Solana (SOL) for 490,000 WIF and then swapped that same amount of WIF into 19,035 SOL within the same transaction bundle, netting itself a profit of $1.73 million, according to Solscan data.

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Near Foundation lays off 40% of workforce despite rosy financials

Near Foundation, the developer of the namesake layer-1 protocol, announced that it would lay off 40% of its staff “to significantly consolidate the core Foundation team to focus on a narrower and higher-impact set of activities.”

According to the Jan. 11 announcement, the decision to let go of 35 Near employees in the marketing, business development and community teams came after feedback that the foundation “has not always been as effective as it could be, sometimes moving too slowly and trying to do too many things at once.”

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Web3 apps saw 124% growth in 2023, led by Near, Klaytn, Arbitrum — DappRadar

The number of unique active wallets (UAWs) that engaged with Web3 apps increased by 124% in 2023, according to a Jan. 11 report from blockchain analytics platform DappRadar. Near, Klaytn and Arbitrum led the year in growth, while Harmony, Solana and Hive saw declining users. UAW measures how many wallets interact with a Web3 app, also known as a decentralized application, over a particular time period.

Over the course of the year, an average of 4.2 million UAWs interacted with these apps daily, more than double the previous year’s users. Nonfungible token products led the way in growth, posting a 166% increase over 2022, while DeFi came in second with a 112% increase. Social media apps posted a 29% gain, thanks to “leading protocols”, Lens Protocol and Galxe, according to the report.

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CFTC outlines ways to mitigate DeFi risks amid “promising opportunities”

The CFTC, which regulates the U.S. derivatives markets, published a report detailing its recommendations for policymakers and industry players to mitigate risks associated with DeFi.

Within its DeFi report, the CFTC’s Digital Assets and Blockchain Technology Subcommittee wrote that the space presents “promising opportunities.” However, the CFTC mentioned that it also carries complex and significant risks to the U.S. financial system, its consumers, and national security.

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DeFi market overview

Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most trading in the green on the weekly charts. After weeks of bullish price action, the total value locked into DeFi protocols exceeded $65 billion.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.