Money laundering, market manipulation and online theft are the biggest threats globally to decentralised finance (DeFi) on Web3 and collaborative solutions are needed to ensure user trust in the next iteration of the internet, according to report by Chainalysis.
While it cannot be totally eradicated, reduced volume of illicit activity is a sign that stakeholders are more engaged to combat these threats, which have the potential to cost users billions, the blockchain data platform said in its State of Web3 report.
The pattern is similar to previous cycles of emerging technologies: as decentralised finance protocols steadily rise in popularity, illicit use is also trending upwards, said Ethan McMahon, an economist at New York-based Chainalysis.
“As with any emerging technology that has tremendous potential for widespread use, bad actors are among the first to act. It, therefore, isn’t surprising to see that,” Mr McMahon told The National.
“That being said, experience tells us that as the DeFi space matures, illicit usage will make up an ever-smaller share of the total usage.
“Of course, this will require a concerted effort by industry stakeholders to harness the inherent transparency of blockchains to mitigate malicious activity and thus increase consumer confidence in the technology.”
Web3 is the latest iteration of the world wide web, with blockchain, decentralisation, openness and greater user utility among its core components. Its market value is expected to reach about $6.2 billion in 2023 and is projected to grow at a compound annual rate of 44.6 per cent from 2023 to 2030, Market Research Future said.
Blockchain-based DeFi, meanwhile, is generally considered to be a safer way to conduct transactions and can potentially replace middlemen, such as brokers and banks, in the financial system.
The global DeFi platform market is expected to hit $507.92bn in 2028, at a compound annual growth rate of about 44 per cent, Emergen Research reported.
It is proving to be a lucrative opportunity for the digital underworld. Losses in the cryptocurrency sector surged to $14bn in 2021, a 79 per cent jump over 2020, largely due to the rise in DeFi platforms and the proliferation of fraud, Chainalysis said earlier this year.
The share of illicit activity in the cryptocurrency market dropped to a mere 0.15 per cent in 2021, the lowest level since 2017, with the only notable spike coming in 2019 when it rose to almost 3.4 per cent.
That peak, however, was largely attributed to the PlusToken scandal, which defrauded investors of about $2.25bn in China. The perpetrators were sentenced to 11 years in prison in late 2020.
“The volume of illicit cryptocurrency transactions as a share of the overall market is at a record low. This bodes well for the adoption and utilisation of these digital assets by a broader segment of consumers and businesses,” Mr McMahon said.
However, DeFi specifically appears to be going through the same growing pains that cryptocurrencies as a whole did previously, with illicit activity rising over the past two years, Chainalysis said.
“As the cryptocurrency ecosystem matures, cyber criminals are setting their sights on the emerging trends of DeFi and NFTs [non-fungible tokens]. As with the early days of cryptocurrencies, hackers have been quick to execute their illicit schemes,” Mr McMahon said.
The value of cryptocurrency stolen from DeFi protocols surged to about $1.25bn in the first quarter of 2022, only half a year removed from the first time it breached the $1bn mark.
The Chainalysis study showed that much of the cryptocurrency stolen from DeFi protocols has gone to hacking groups associated with North Korea, with around $840 million funnelled there in 2022.
The transparency of blockchain allows government agencies to identify and hit services being used for money laundering, Mr McMahon said, but with hacking at a record high, he recommends prioritising investments in preventive measures to stem this rise.
“Attacks on DeFi protocols by North Korean-linked hackers demonstrate the need for these protocols to shore up their systems not just to protect consumers, but also for national security,” he added.
“For confidence to grow, it is imperative for industry stakeholders to step up and stamp out this abuse of these technologies.”
PROFILE
Name: Enhance Fitness
Year started: 2018
Based: UAE
Employees: 200
Amount raised: $3m
Investors: Global Ventures and angel investors
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Scoreline:
Cardiff City 0
Liverpool 2
Wijnaldum 57', Milner 81' (pen)
Killing of Qassem Suleimani
MATCH INFO
Everton v Tottenham, Sunday, 8.30pm (UAE)
Match is live on BeIN Sports
MATCH INFO
Karnatake Tuskers 114-1 (10 ovs)
Charles 57, Amla 47
Bangla Tigers 117-5 (8.5 ovs)
Fletcher 40, Moores 28 no, Lamichhane 2-9
Bangla Tiger win by five wickets
MATCH INFO
Day 2 at Mount Maunganui
England 353
Stokes 91, Denly 74, Southee 4-88
New Zealand 144-4
Williamson 51, S Curran 2-28
MATCH DETAILS
Barcelona 0
Slavia Prague 0
SEMI-FINAL
Monterrey 1
Funes Mori (14)
Liverpool 2
Keita (11), Firmino (90 1)
Genesis G80 2020 5.0-litre Royal Specs
Engine: 5-litre V8
Gearbox: eight-speed automatic
Power: 420hp
Torque: 505Nm
Fuel economy, combined: 12.4L/100km
Price: Dh260,500
THE SPECS
Engine: 3.5-litre supercharged V6
Power: 416hp at 7,000rpm
Torque: 410Nm at 3,500rpm
Transmission: 6-speed manual
Fuel consumption: 10.2 l/100km
Price: Dh375,000
On sale: now
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
THE SPECS
Range Rover Sport Autobiography Dynamic
Engine: 5.0-litre supercharged V8
Transmission: six-speed manual
Power: 518bhp
Torque: 625Nm
Speed: 0-100kmh 5.3 seconds
Price: Dh633,435
On sale: now
UAE currency: the story behind the money in your pockets
UAE squad
Esha Oza (captain), Al Maseera Jahangir, Emily Thomas, Heena Hotchandani, Indhuja Nandakumar, Katie Thompson, Lavanya Keny, Mehak Thakur, Michelle Botha, Rinitha Rajith, Samaira Dharnidharka, Siya Gokhale, Sashikala Silva, Suraksha Kotte, Theertha Satish (wicketkeeper) Udeni Kuruppuarachchige, Vaishnave Mahesh.
UAE tour of Zimbabwe
All matches in Bulawayo
Friday, Sept 26 – First ODI
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I
The%20specs
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THE BIO: Mohammed Ashiq Ali
Proudest achievement: “I came to a new country and started this shop”
Favourite TV programme: the news
Favourite place in Dubai: Al Fahidi. “They started the metro in 2009 and I didn’t take it yet.”
Family: six sons in Dubai and a daughter in Faisalabad
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
RESULTS
6.30pm UAE 1000 Guineas Trial Conditions (TB) US$100,000 (Dirt) 1,400m
Winner Final Song, Christophe Soumillon (jockey), Saeed bin Suroor (trainer).
7.05pm Handicap (TB) $135,000 (Turf) 1,000m
Winner Almanaara, Dane O’Neill, Doug Watson.
7.40pm Handicap (TB) $175,000 (D) 1,900m
Winner Grand Argentier, Brett Doyle, Doug Watson.
8.15pm Meydan Challenge Listed Handicap (TB) $175,000 (T) 1,400m
Winner Major Partnership, Patrick Cosgrave, Saeed bin Suroor.
8.50pm Dubai Stakes Group 3 (TB) $200,000 (D) 1,200m
Winner Gladiator King, Mickael Barzalona, Satish Seemar.
9.25pm Dubai Racing Club Classic Listed Handicap (TB) $175,000 (T) 2,410m
Winner Universal Order, Richard Mullen, David Simcock.
SPECS
Nissan 370z Nismo
Engine: 3.7-litre V6
Transmission: seven-speed automatic
Power: 363hp
Torque: 560Nm
Price: Dh184,500
KILLING OF QASSEM SULEIMANI
Brief scores
Toss India, chose to bat
India 281-7 in 50 ov (Pandya 83, Dhoni 79; Coulter-Nile 3-44)
Australia 137-9 in 21 ov (Maxwell 39, Warner 25; Chahal 3-30)
India won by 26 runs on Duckworth-Lewis Method
Green ambitions
- Trees: 1,500 to be planted, replacing 300 felled ones, with veteran oaks protected
- Lake: Brown's centrepiece to be cleaned of silt that makes it as shallow as 2.5cm
- Biodiversity: Bat cave to be added and habitats designed for kingfishers and little grebes
- Flood risk: Longer grass, deeper lake, restored ponds and absorbent paths all meant to siphon off water
DSC Eagles 23 Dubai Hurricanes 36
Eagles
Tries: Bright, O’Driscoll
Cons: Carey 2
Pens: Carey 3
Hurricanes
Tries: Knight 2, Lewis, Finck, Powell, Perry
Cons: Powell 3
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Dual%20electric%20motors%20with%20102kW%20battery%20pack%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E570hp%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20890Nm%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERange%3A%3C%2Fstrong%3E%20Up%20to%20428km%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh1%2C700%2C000%3C%2Fp%3E%0A
Cultural fiesta
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Fixtures
Wednesday January 8 –Oman v Namibia
Thursday January 9 – Oman v UAE
Saturday January 11 – UAE v Namibia
Sunday January 12 – Oman v Namibia
The specs
Engine: 4-litre twin-turbo V8
Transmission: eight-speed PDK
Power: 630bhp
Torque: 820Nm
Price: Dh683,200
On sale: now
RESULTS
5pm: Maiden | Dh80,000 | 1,600m
Winner: AF Al Moreeb, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
5.30pm: Handicap | Dh80,000 | 1,600m
Winner: AF Makerah, Adrie de Vries, Ernst Oertel
6pm: Handicap | Dh80,000 | 2,200m
Winner: Hazeme, Richard Mullen, Jean de Roualle
6.30pm: Handicap | Dh85,000 | 2,200m
Winner: AF Yatroq, Brett Doyle, Ernst Oertel
7pm: Shadwell Farm for Private Owners Handicap | Dh70,000 | 2,200m
Winner: Nawwaf KB, Patrick Cosgrave, Helal Al Alawi
7.30pm: Handicap (TB) | Dh100,000 | 1,600m
Winner: Treasured Times, Bernardo Pinheiro, Rashed Bouresly
The biog
Name: Gul Raziq
From: Charsadda, Pakistan
Family: Wife and six children
Favourite holes at Al Ghazal: 15 and 8
Golf Handicap: 6
Childhood sport: cricket
The specs: 2017 Dodge Ram 1500 Laramie Longhorn
Price, base / as tested: Dhxxx
Engine: 5.7L V8
Transmission: Eight-speed automatic
Power: 395hp @ 5,600rpm
Torque: 556Nm @ 3,950rpm
Fuel economy, combined: 12.7L / 100km
The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
