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Today in Crypto: 46.5% of Web3 Fund Loss is Result of Traditional Web2 Security Issues, Investment in Blockchain Gaming Hits $1.5 Billion in 2023

Sead Fadilpašić
Last updated: | 5 min read
Source: AdobeStock / AhmadSoleh

Get your daily, bite-sized digest of crypto and blockchain-related news – investigating the stories flying under the radar of today’s news.
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Security news

  • While developers and researchers generally focus on designing and coding the smart contract protocol, 46.5% of all hacks in 2022 in monetary terms occurred via infrastructure, e.g. poor private key handling – generating over $1.7 billion in losses. 11 of 13 exploits in CeFi were infrastructural in nature, found the bug bounty and security services platform Immunefi in its report The True Origin Of Hacks & Top Web3 Vulnerabilities. This report introduces the Vulnerability Classification Standard for Web3 and provides in-depth research on the root cause of the most damaging vulnerabilities. The biggest infrastructural issue is private key management, they said, which typically doesn’t undergoe a security audit. Also, not all Web3 projects adequately care about rigorous key management policies, practices, or emergency plans. Furthermore, developers make mistakes and introduce vulnerabilities far too often in smart contracts when it comes to access control, input validation, and arithmetic operations – accounting for nearly 37.5% of all incidents. Their damage in cash is small though (5%). Meanwhile, bridge hacks play an important role in losses, it added.

Gaming news

  • Investment in the Web3 gaming sector saw a massive surge in 2021 and stabilized in 2023, reminiscent of pre-bull market levels, said Web3 Gaming DAO Game7 in its State of Web3 Gaming Report. Since 2018, $19 billion has been funneled into Web3 gaming-related projects, and this market continues to grow, albeit slower after the 2022 market correction. Until Q3, blockchain gaming-related rounds reached $1.5 billion in 2023, with more than $800 million being exclusive to Web3 gaming. US-based projects have attracted more than $4 billion in funding, followed by France ($0.9B), Canada ($0.67B), Singapore ($0.67B), and Hong Kong ($0.66B). This year, half of the new games entering the space were based in Asia. Blockchains targeting the gaming sector are on the rise despite the market conditions: more than 81 such blockchains were announced in 2021, growing by 40% YoY. Also this year, an all-time high number of Web3 games migrated to different networks, with Polygon, Immutable, and Arbitrum at the top. Polygon hosts most Web3 games, followed by BNB and the Ethereum Mainnet. Immutable is the most popular L2 gaming ecosystem, followed by Arbitrum. Solana is the largest non-EVM ecosystem of Web3 games. OP Stack is the leading choice among blockchain frameworks for the creation of new networks aiming at gaming use cases. 81% of Web3 games use general-use L1 networks, the report said.

Payments news

  • Singaporean payment gateway startup Leap Pay announced its collaboration with blockchain-based point-of-sale solution developer Pundi X to create an ecosystem that empowers merchants to effortlessly accept and manage crypto payments in Singapore. Leap Pay said it will collaborate with Virtual Asset Service Provider (VASP) licensed entities to develop new rails, ensuring that platforms comply with all regulatory standards in multiple regions, including Singapore, Hong Kong, and the Philippines. “By combining Leap Pay’s expertise in regulatory compliance and payment gateways with Pundi X’s innovative blockchain technology, this partnership will bridge the gap between conventional commerce and the crypto world, making it easier for businesses to tap into the benefits of digital currencies,” it said.

Investment news

  • Bitfinex Securities, a subsidiary of the Bitfinex cryptocurrency exchange, announced the start of the capital raise for ALT2611, set to run for two weeks, “marking the introduction of one of the world’s pioneering tokenized bonds,” the press release said. ALT2611, a 36-month, 10% coupon bond denominated in tether (USDT), is issued by Alternative, a Luxembourg-based securitization fund, managed by Mikro Kapital. Quarterly coupon payments will be made in USDT. The minimum initial purchase size is set at 125,000 USDT, with secondary market trading in denominations of 100 USDT. This tokenized bond is issued on the Bitcoin sidechain Liquid Network.

Blockchain news

  • Agrotoken, a global tokenization infrastructure for agricultural commodities, announced its plans to launch on Polkadot. It will bid for a parachain slot on the network, with support from the Substrate Builders Program, it said, adding: “By building a Layer-1 parachain on Polkadot, Agrotoken will further its multi-chain mission by being open to collaboration with other projects in the ecosystem.” Builders can use the Agrotoken API to build new products, and all transactions on Agrotoken will be secured on-chain to ensure transparency and track the asset’s origin. Agrotoken is a digital platform that issues stablecoins with collateral in grains and food, and the value of each token reflects the price of its respective commodity – soybeans, corn, or wheat. With the direct backing of the grains, farmers, businesses, and financial institutions can transact via Agrotoken’s digital platform. To date, it has tokenized $105 million worth of grains – the equivalent of 124,352 tonnes of soy, 94,423 tonnes of corn, and 13,818 tonnes of wheat. Agrotoken is active in two of the biggest markets for commodities – Argentina and Brazil – while in the medium term, it plans to expand globally, with its US launch planned for 2024.

Trading news

  • Crypto exchange OKX has collaborated with regulated digital asset custody service provider Komainu and European alternative asset manager specializing in digital assets CoinShares to enable CoinShares to conduct 24/7 trading through the OKX platform while assets are held in segregated custody with Komainu. According to the press release, “the collaboration marks a significant advancement in institutional crypto trading by ensuring that collateral assets are securely held by Komainu in third-party custody in order to mitigate counterparty risks.”
  • BLOCKSMITH&Co. announced the commencement of trading for the TSUBASA Governance Token (TSUGT), associated with the Web3 game ‘Captain Tsubasa -RIVALS-‘ on the SBI Group‘s cryptocurrency exchange BITPOINT. The trading began on November 14. Per the press release, this token is designed and developed to “strongly connect the operational team with the player community, fostering a cooperative environment in project development.” TSUGT holders can enjoy various benefits, including exclusive non-fungible tokens (NFTs) and invitations to closed fan meetings, it said.

NFT news

  • The North American National Hockey League Players’ Association (NHLPA), National Hockey League (NHL), NHL Alumni Association (NHLAA), and platform for gamified digital collectible experiences Sweet announced the launch of NHL Breakaway, the official digital collectibles highlight community of the NHL, NHLPA, and NHLAA for the NHL’s community of fans. Per the press release, the platform delivers an immersive experience featuring some of the most recognizable highlights in NHL history, as well as unique features such as the Trade Lounge, Public Profiles, and Gamification. Starting today, fans and collectors can collect, gift, trade, display, and participate in set collections and challenges to earn rewards, the announcement said.