Those with skin in the game are reiterating that comparing Bitcoin to Ethereum is a pointless and potentially costly exercise.

Bitcoin (BTC) is at risk of a “flippening” from Ethereum (ETH), mainstream media claims as some familiar “FUD” returns to the spotlight.

As BTC/USD continues to flag below $40,000, an old argument has resurfaced — but major investors are fighting back.

Bloomberg: ETH “will likely exceed Bitcoin”

In an article on May 31, Bloomberg cited multiple sources claiming that in future, Ethereum will overtake Bitcoin as the world’s cryptocurrency of choice.

The largest altcoin “will likely exceed Bitcoin at some point in the future, as Ethereum will be superior when it comes to innovation and developer interest,” Tegan Kline, co-founder of Blockchain firm Edge & Node, told the publication.

Another executive added that Ethereum has a “better growth story.”

The argument is far from new and has appeared regularly throughout Ethereum’s existence. The Ethereum network’s recent major upgrade has kept its profile afloat as ETH has outperformed Bitcoin over the past year and formed the backbone of the DeFi phenomenon.

ETH/BTC, long on a losing streak, reached its highest in three years earlier this month.

ETH also managed to preserve more of its price gains in recent days than Bitcoin — as Cointelegraph reported, a key moving average remains intact for ETH/USD, while BTC/USD has failed to recapture “lines in the sand.”

Druckenmiller compares Ethereum to MySpace

For all its impressive performance, however, claiming that Ethereum will replace Bitcoin at the top is nonsensical, many argue — and not only staunch Bitcoin supporters.

The only flippening happening this year pic.twitter.com/cY0necJ3GM

— William Clemente III (@WClementeIII) May 29, 2021

In an interview with The Hustle last week, billionaire investor Stanley Druckenmiller became the latest non-technical figure to cast aside doubts about Bitcoin’s staying power.

“I think BTC has won the store of value game because it’s a brand, it’s been around for 13-14 years and it has a finite supply,” he said.

“Is it going to be gold? I don’t know. It’s sure as hell doing a good imitation of it the last year or two.”

For Druckenmiller, Ethereum is to Bitcoin what MySpace is to Google.

“I’m a little more skeptical of whether it can hold its position. It reminds me a little of MySpace before Facebook,” he continued.

“Or maybe a better analogy is Yahoo before Google came along. Google wasn’t that much faster than Yahoo, but it didn’t need to be. All it needed to be was a little bit faster and the rest is history.”

Others have long pointed out that technically, Bitcoin and Ethereum have little in common. Bitcoin’s finite supply and years of resistance to attacks place it in a different league to any other cryptocurrency, and comparing it two them is an apples and oranges comparison.

“I generally think all the other digital currencies don’t really compete with Bitcoin and are in no way similar to Bitcoin,” Saifedean Ammous, author of The Bitcoin Standard, famously told the Unchained Podcast in August 2017.

“I think their real competition is, if I’m generous, I’ll say Amazon Web Services and these kinds of platforms.”

The warning comes in response to Bybit’s marketing campaign that reportedly targeted Japanese investors.

Singapore-based Bybit, the world’s fifth-largest cryptocurrency derivatives exchange by trading volume, has allegedly been running unregistered crypto services in Japan, according to an official warning.

The Japan Financial Services Agency issued a formal warning letter to Bybit stating that the firm is not registered to operate crypto services in the country.

The warning comes in response to Bybit’s marketing campaign that reportedly targeted Japanese investors, according to Norbert Gehrke, founder and representative director of tech hub Tokyo FinTech.

“Such public reprimand for running an unregistered business has not occurred for a while, so one is to assume that the FSA has witnessed aggressive marketing by Bybit to Japanese investors that goes beyond the common transgressions of presenting their website in Japanese and not blocking Japanese IP addresses,” Gehrke wrote in a blog post.

Gehrke claimed that Bybit’s Japanese website makes no mention that local investors are not allowed to access the platform and does not block local IPs from accessing it. He noted that other exchanges, like Panama-based crypto derivatives exchange Deribit, have blocked Japan-based IP addresses.

According to a notice on Deribit’s Japanese Telegram channel, Deribit restricted Japanese users from accessing its platform on May 1, 2020. 

Bybit and the FSA did not immediately respond to Cointelegraph’s request for comment.

In March, Bybit suspended services for customers in the United Kingdom following a blanket ban by the Financial Conduct Authority of retail crypto derivatives trading.

AI and blockchain are rarely utilized together — but combining these technologies could unlock a plethora of use cases.

Artificial intelligence and blockchain are both touted as technologies that will lead our future. But here’s the problem: They’re like oil and water. While innovative in their own right, there’s a noticeable lack of interconnectedness — projects that tightly combine AI and blockchain, unleashing the full potential of both emerging technologies. 

Technical hurdles have been largely to blame for this. Integrating AI into the smart contracts that exist today is practically impossible. The two often rely on entirely different programming paradigms — and while smart contracts use data sparingly to reduce transaction fees, many AI models process vast amounts of data as well as a large amount of computing resources to make decisions.

Smart contracts are also incredibly strict, meaning that an outcome can only be achieved when a range of strict parameters are met. As a result, they can be ill-suited to the world of AI, where 100% accuracy is hard to achieve, especially when it comes to image and audio recognition. This demand for flexibility has created the need for a new generation of smart contracts, able to handle highly accurate (albeit imperfect) input and receive a perfect output. 

As the EU Blockchain Forum noted in a recent report, combining these two technologies isn’t just desirable… it is a necessity. The authors wrote: “In the real world, especially in large-scale use cases, blockchain, AI and IoT are likely to work in concert. In a smart city, blockchain could be combined with IoT and AI on an infrastructure level to manage critical systems that cities depend upon, as well as improve quality of life for residents through safer and better designed urban environments.”

The use cases

But what exactly would bringing blockchain and artificial intelligence together mean in practice? What are the tangible applications that end users would have to look forward to?

Projects involved in the space argue that decentralized apps have an opportunity to become far more advanced than they are now. Trading strategies could be informed by AI — and smart contracts could become infinitely more flexible. Blockchain platforms have the chance to offer a more convenient alternative to private keys — which can often be cumbersome to remember and store securely — with users gaining access to balances through facial recognition.

Together, AI and blockchain can also be leveraged in many other fields such as big data and IoT, insurance, manufacturing, healthcare, logistics, and many more. In all cases, AI plays an important role in processing data or automating human tasks to feed information into blockchain. 

Experts have argued that AI can be just as effective as people are at many tasks — and better still, they can operate 24/7 without suffering from fatigue or becoming susceptible to human error. Likewise, blockchains are increasingly being deployed to provide transparency transactions and data to consumers. The possibilities are endless as long as there’s a way for blockchain developers to implement AI into their platforms.

AI and blockchain ecosystems at Oraichain

Oraichain is one of the companies that has been making a concerted effort to bring AI into the blockchain — unlocking compelling use cases in the process.

The data oracle platform says it enhances smart contracts by enabling them to securely access AI through APIs — unlocking reliable data in the process. Together with the launch of Oraichain Mainnet, more than 100 of these APIs are already open to the public in February. 

A developers platform called Oraichain Studio helps integrate those APIs into smart contracts was launched in April 2021 — verifying the correctness of AI output, and then distributing the data generated across multiple blockchains without centralized control. In time, this could broaden access to highly trained AI models, enabling greater numbers of people to benefit from what this technology has to offer.  

Oraichain has created a marketplace where experts can sell their services — ranging from AI-enhanced yield farming to price prediction and face authentication tools. As well as enabling specialists to monetize their work, executives argue that this allows smaller firms to enjoy a more level playing field with the industry titans who dominate the space. 

The business is about to launch a new system, aiRight. Described as the world’s first all-in-one NFT creation and copyright management platform, it offers a complete set of services for the nonfungible token market — including generating NFTs with AI and securing copyrights on-chain. AI services also allow users to easily verify the uniqueness and authenticity of NFTs.

The company was launched by Dr Chung Dao, who has a PhD in computer science and lectures at Hanoi University of Science and Technology. In the last six months, Oraichain announced that it had formed a number of strategic partnerships with Rikkeisoft, KardiaChain, VAIOT, and OCEAN Protocol. 

Rikkeisoft is a Vietnam-based IT firm with more than 1,000 employees, that would provide Oraichain necessary human resources to enhance some of Oraichain’s flagship projects — including the DeFi-focused service yAI.finance, and its AI marketplace, aiRight, and more to come.

Rikkeisoft’s CEO and co-founder Phan The Dung said at the time: “At Rikkei, we have been tracking the developments of Oraichain right from the start. We found it unique as it merges the untapped potential of AI and blockchain technologies.”

Overall, it is hoped that those partnerships will serve as a stepping stone to scale the business, and help Oraichain gain a greater presence in the U.S. and Japan with its AI and blockchain technology.

Long-term Bitcoin holders remain unfazed by the recent sell-off, but there is still one alarming sign.

A recent run-down in Bitcoin’s (BTC) price from about $65,000 to as low as $30,000 did not force long-term holders into selling, Glassnode data shows.

The on-chain analytics platform revealed a spike in Bitcoin reserves held in wallets with lower unspent output just as BTC/USD’s bids were crashing.

Meanwhile, the data also shows a Bitcoin collecting spree among miners — the entities that produce and supply newly minted cryptocurrencies for retail markets. As a result, the active BTC supply started declining in recent sessions.

Short-term Bitcoin holders — the entities that hold the flagship cryptocurrency for less than a week after accumulating it — were the biggest sellers during the BTC/USD rate decline. Glassnode data suggested that newer market entrants panic-sold BTC during the May downturn, a month during which BTC lost 38% from its all-time high price.

Bitcoin price volatility, meanwhile, continues to exploit short-term traders with double-digit percentage up/down moves. The 24-hour Bitcoin Volatility Index on TradingView settled around 19.70 on May 20 after bottoming out at 1.90 on April 2 — that marked a 936% climb during the period, wherein BTC/USD rose to hit an all-time high near $65,000 and corrected lower to reach $30,000.

Elevated price fluctuations served as a signal that investors remained fearful or uncertain about Bitcoin’s next market bias. The intraday candles in the chart above showed persistent higher volatility — the one on Sunday closed 34% lower than the previous session. But overall, the trend appeared on its way to the downside.

Except, there is one catch

Glassnode anticipated that long-term holders realize their profits or losses at some point in time (PnL). The analytics portal cited a proprietary metric that checks on long-term holders’ exhausting levels — the point at which their ability to hold BTC breaks, and which prompts them to realize their profits or losses in the market.

“The current degree of net unrealized PnL held by LTHs tests the 0.75 level, which has been the make or break level between past bull and bear cycles,” wrote Glassnode analysts.

“Only in the 2013 ‘double pump’ scenario did this metric see a recovery. Should LTHs continue to see their paper gains fall, this too may create a new source of overhead supply. On the other hand, higher prices and a supply squeeze from buying the dip would begin to resemble the ‘double pump’ scenario from 2013.”

Bitcoin macroeconomically bullish

The only factor that separates the current Bitcoin holding scenario from the previous ones is the United States’ trillion-dollar deficits. The world’s largest economy has returned to its highest debt-to-GDP ratio since World War II. And on Friday, President Joe Biden announced another $6-trillion spending plan for 2022.

In total, the plan would raise government spending to $8.2 trillion per year by 2031. It would mean annual fiscal deficits of over $1.3 trillion and $1.8 trillion in 2022.

One of the biggest fears in the market is that increased government spending would lead to a dramatic rise in inflation.

Demand for Bitcoin has surged among institutional investors for its anti-inflation narrative. Supporters note that there can only be 21 million BTC tokens in supply, making it an ideal store of value against an infinitely printable U.S. dollar.

Corporates including Tesla, Square, MicroStrategy and Ruffer Investments have added Bitcoin to their balance sheets as an alternative to cash. Billionaire investors, including Stan Druckenmiller, Paul Tudor Jones and Mike Novogratz have also allocated a considerable portion of their investment portfolio to Bitcoin.

Fundamentals continue to provide Bitcoin a bullish backstop.

“Bitcoin was made for this moment,” noted Dan Held, director of growth marketing at Kraken. “We’re in the biggest money printing operation ever in human history, and Bitcoin is the only way out.”

Ripple’s legal battle with U.S. regulators continues.

Ripple has scored another win in its ongoing legal battle against the United States Securities and Exchange Commission as the court has denied the SEC access to Ripple’s legal advice.

Magistrate Judge Sarah Netburn of the District Court for the Southern District of New York ruled Sunday to deny the SEC’s motion to compel Ripple to produce memos discussing XRP sales with the firm’s lawyers.

According to the SEC, Ripple could have been aware that XRP could be a security from its legal advisors before moving forward with its token sale back in 2013. The SEC filed a motion on May 7 to compel Ripple to produce all communications discussing any legal advice Ripple sought or received as to whether its offers and sales of XRP would be subject to federal securities laws.

In the latest ruling, Netburn referred to the attorney-client privilege that is meant to “encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.” The judge noted that Ripple has not waived its attorney-client privilege despite defendants being able to waive it in certain circumstances.

The ruling also pays special attention to the rule of fair notice, which requires the courts to construe ambiguous criminal statutes in favor of the defendant. In asserting this defense, Ripple claims that the SEC failed to provide market participants with fair notice that the regulator considered XRP a security.

“In support, it cites to the SEC’s eight-year delay in pursuing enforcement action against Ripple for its alleged securities violations — even after XRP was listed on over 200 cryptocurrency exchanges, billions of dollars of XRP sales transactions had taken place, and Ripple had entered a settlement with the U.S. Department of Justice and FinCEN that described XRP as a ‘convertible virtual currency,’” Netburn wrote.

The judge noted that the SEC may renew its motion application if Ripple “raises its beliefs or relies upon its privileged communications in support of its fair notice defense.”

The latest ruling is yet another milestone in the SEC’s battle against Ripple after the regulator filed a lawsuit against Ripple Labs, CEO Brad Garlinghouse and executive chairman Chris Larsen in December 2020, alleging that XRP was a $1.3-billion unregistered securities offering. Ripple has managed to achieve a series of legal victories, including winning access to internal SEC discussion history regarding cryptocurrencies in April. The court also denied the SEC the ability to disclose the financial records of Garlinghouse and Larsen.

Last week, Garlinghouse confirmed Ripple’s plans to go public after the firm resolves its case with the SEC, stating that the likelihood of this scenario was “very high at some point.”

Chinese “crypto dad” and ex PBoC director Yao Qian insists digital yuan is not a surveillance tool for the government.

China’s digital yuan will utilize smart contracts, and will be built to counter Alipay-like payment platforms designed by the privately-owned conglomerates, former People’s Bank of China director Yao Qian said.

Speaking at the International Finance Forum in Beijing, Qian argued that simply simulating its physical counterpart would not be enough for the digital yuan to succeed. To fully benefit from being digital, it will move toward the “smart currency” by making use of smart contracts, he added, according to local sources.

Central banks need to innovate the legal fiat money to keep up with the tides of digitalization, he said. Qian then listed the European Central Bank, Bank of Japan and the central bank of Canada as examples of how to work on smart contract-based digital currencies.

Qian reportedly said that China’s initial idea of a digital yuan was to counter the impact of private payment platforms that have become increasingly popular, possibly implying the country’s ubiquitous payments service Alipay. However, he insisted that the Chinese government did not develop the digital yuan as a surveillance tool to track all transactions in real-time:

“The digital yuan needs to achieve a balance between protecting users’ privacy and cracking down on crimes such as money laundering, tax evasion and the financing of terrorism.”

Central banks can provide users digital currencies without intermediaries “if the digital dollar and digital yuan run directly on blockchain networks like Ethereum and Diem,” Qian further explained. Layered operations can enable the central bank’s digital currency to better benefit bankless people and achieve financial inclusion, he added.

Yao Qian is the director of the Science and Technology Supervision Bureau of the China Securities Regulatory Commission. Formerly, he was the director of PBoC’s Digital Currency Research Lab. He is known for his works on digital yuan since its initial steps in 2014. His friendly attitude toward crypto as an official of China’s SEC counterpart earned him the moniker “Chinese crypto dad.”

Cryptocurrency investors should be ready to lose all their holdings, according to Ireland’s central bank financial conduct director.

Ireland’s central bank director general for financial conduct is the latest official to point out issues of Bitcoin (BTC) and the cryptocurrency industry following a major market sell-off.

The growing popularity of cryptocurrencies like Bitcoin is “of great concern,” the Central Bank of Ireland’s Derville Rowland warned, Bloomberg reports Monday.

“Crypto assets are quite a speculative, unregulated investment,” and investors should be “really aware they could lose the whole of that investment,” Rowland stated after crypto markets shed nearly $1 trillion in a matter of days in one of the biggest historic crypto sell-offs.

Rowland’s perspective on the crypto is set to contribute to the global regulation of the space as the official will take over as chairwoman of the European Securities and Markets Authority’s investment management standing committee in July. Earlier this year, the financial authority outlined the same concerns around crypto, stating that these types of assets are not regulated and pose significant risks for investors due to its highly volatile nature.

One of the top executives at Ireland’s central bank, Rowland is known for her stringent stance on financial violations as well as involvement in major enforcement investigations. In March, the central bank fined Ireland’s largest stock broker, Davy, for breaching market rules, eventually pushing the firm to put itself up for sale.

Aside from pointing the finger at crypto, Rowland also reportedly outlined the problem of “gamification” of stock investing, referring to coordinated trading via social media platforms, including Reddit-driven GameStop short squeeze. The official said that the ESMA and Ireland’s central bank have held discussions on the issue. While there’s not yet a time-line for any new rules, regulations need to be “technology neutral, so that you’re not getting better protections in older paper-based processes then you are in more online processes,” Rowland said.

A number of central bank officials have raised the alarm on crypto investment recently. In early May — prior to a downturn on crypto markets — the Bank of England governor Andrew Bailey warned that cryptocurrencies have no intrinsic value and that people should only buy them if they’re prepared to lose their money. Last week, Bank of Japan governor Haruhiko Kuroda slammed Bitcoin, arguing that most of the trading was speculative.

Strong hands are hodling stronger than ever as May 2021 lines up to be the worst May ever for Bitcoin.

Bitcoin (BTC) starts a new week bearish or as a firm “buy” depending on the source — what happens next?

After a week of uninspiring price performance, the largest cryptocurrency is still stuck in the lower $30,000 range.

With inflation worrying traditional markets and summer months traditionally good for bulls, there may yet be cause for celebration. In Bitcoin, anything can happen, however, and surprises swing both ways.

Cointelegraph Markets takes a look at five factors to consider when charting where BTC/USD might head next.

Inflation spooks macro mood

It’s a quiet day for stocks and commodities thanks to holidays in the United States, United Kingdom and elsewhere in the West.

That said, Asian markets are mostly stable anyway, as traders gear up for the beginning of the traditionally slower summer period.

Zooming out, however, and the picture gets decidedly less steady. The reason, sources are telling mainstream media, is inflation.

Long a concern amid the international rebound from coronavirus fuelled by huge central bank liquidity creation, the long-term impact of engineered “recoveries” worldwide is looming large in the horizon.

Some telltale signs are already here, such as spiralling manufacturing costs which may not be fully reflected.

“Policy makers have committed to accepting a higher level of inflation, higher volatility in inflation and as that happens you will see inflation moving structurally higher,” Mixo Das, an equity strategist at JPMorgan Asia, told Bloomberg.

“I don’t think this is in the prices yet.”

Inflation is by its very nature the antithesis of a Bitcoin standard, given the cryptocurrency’s fixed supply and diminishing issuance curve which cannot be manipulated.

As such, demand from institutions and those with large exposure to cash should continue to expand in line with inflation, which is being increasingly tolerated by central banks at higher levels.

In a debate about Bitcoin’s energy usage earlier this month, Saifedean Ammous, author of “The Bitcoin Standard,” suggested that around 10% of global wealth is already eradicated by inflation every year.

Weak hands can’t stop selling

It’s a somewhat gloomy picture for Bitcoin hodlers on Monday as the weekend failed to produce signs of a bullish price rebound.

At the time of writing, BTC/USD is under $36,000, having slowly drifted downwards since hitting local highs of $41,000 last week.

Those highs came soon after another retest of $30,000 support which saw Bitcoin bounce at $31,000, reestablishing the familiar trading corridor it has moved in since the capitulation event earlier in May.

Depending on who you ask, this setup is either a golden accumulation opportunity or a nightmare — and the split seems to match with market experience.

According to fresh data from on-chain monitoring resource Glassnode, at current levels, old hands are adding to their BTC stack, while recent buyers continue to sell to them.

This classic “weak-hands-to-strong” direction is nothing new, but its pace is increasing.

Miners, too, are back to buying, reversing a brief cascade of selling which accompanied the first dip to $30,000.

“This chart is INSANE!” popular Twitter account Lark Davis responded, highlighting the sense of excitement among longtime market participants.

“Miners and long term holders accumulating, only short term holders selling. Nothing new under the sun!”

Bitcoin’s weekly relative strength index (RSI), a key metric for divining overbought and oversold territory, is also circling lows which have only been beaten by the March 2020 crash and the $3,100 capitulation in December 2018.

Key price averages cause headaches for bulls

In terms of bull or bear, there are “lines in the sand” for traders which Bitcoin still needs to preserve to retain its bull market crown.

In its latest market update, trading suite Decentrader highlighted the 200-day moving average (DMA) and 20-week moving average (WMA) as significant levels to watch.

The 200 DMA currently sits at just above $40,000 — the place at which BTC/USD saw rejection last week — while the 20 WMA is higher at near $49,000.

“Should Bitcoin find sufficient demand in the low 30s, the 20 WMA would be expected to act as resistance,” Decentrader summarized.

“A drop lower would likely make the low $20s or the 78.6% retracement a likely target. As such, price action over the next week particularly important.”

The idea that Bitcoin could return to its 2017 high of $20,000 is unpopular for many, including PlanB, the creator of the stock-to-flow-based (S2F) price models.

While acknowledging that his models were still being “tested” by price swings, the idea of a fresh capitulation down to $20,000 is not something he considers likely.

“Of course I disagree, S2F and on-chain point to much higher prices ($100-288K). Time will tell,” he said during Twitter discourses last week.

He added that Bitcoin’s “realized price” — a calculation of BTC/USD based on the price at which each coin last moved — is now $23,000. During the 2013 and 2017 bull runs, realized price shot up by an order of magnitude, and this year is yet to copy them.

“At $23K we have some way to go IMO,” he commented alongside a chart showing realized price against the 200 WMA.

Worst May ever?

Is this the worst May ever? In terms of monthly returns for Bitcoiners, it definitely looks like it.

On the last day of May 2021, the mood is likely anything but positive, as monthly losses for hodlers total almost 40%.

By comparison, May tends to be a lucrative month for BTC/USD — in 2017 and 2019, for instance, the pair gained more than 50% in May.

2018 was an outlier with 19% losses, but even these pale in comparison to this year. May 2021 is currently on track to be the worst month since 2013 in terms of both Q1 and Q2 performance.

And yet, doom and gloom are far from everywhere. Beyond Bitcoin, altcoin markets are showing signs of life, led by a continued rebound for XRP, up 13% on the day.

As traders note, volumes for largest altcoin Ether (ETH) in particular are promising, and contrast bear market behavior which tends to see little trading activity.

“We shouldn’t bother too much about a weaker BTC as it might follow the stronger alt/usd pairs or continue its chop/sideways while alts go up,” trader Cypto Ed concluded.

Another day, another BSC DeFi protocol gets hacked.

Belt Finance has become the latest Binance Smart Chain-based decentralized finance, or DeFi, protocol to lose millions to an opportunistic hacker.

The Rekt Blog, which post mortems DeFi exploits, stated that an attacker exploited a flaw in the way the protocol’s vaults calculates the value of its collateral which helped to “add another notch to the now infamous flash loan exploit season on the BSC,” adding:

“Yet another fork of a fork has rolled off the conveyor belt with $6.3M falling straight into the hands of the hacker.”

Rekt revealed that a total of eight flash loans were made on PancakeSwap for $385 million BUSD. The beltBUSD vault’s “Elipsis” strategy was exploited as it was the most undersubscribed strategy on the platform.

Belt Finance uses an optimal yield aggregator to offer passive yield generation to depositors. Elipsis is a decentralized exchange that enables swapping of stablecoins with low slippage on the Binance Smart Chain. The beltUSD vault also deploys capital on the BSC-based protocols Venus, Alpaca, and Fortube for yield generation.

On May 30, SushiSwap core developer Mudit Gupta posted a Twitter thread examining the incident, describing the flash loan attack as one of the “more complex hacks.”

Belt’s vaults operate with a target balance for each strategy employed, he explained. When a user deposits money into a vault, the capital is allocated to the most undersubscribed strategy. When someone withdraws money from the vault, it withdraws it from the most oversubscribed strategy.

Gupta asserted the attacker exploited this system to make several transactions across multiple strategies, inflating the value of its pools before repaying the flash loan and pocketing more than $6 million in profits. Gupta concluded:

“Basically, the issue happened because Belt incorrectly integrated with Elipsis. A similar issue happened last month as well in belt finance but at that time, the problem was a buggy integration with Venus. I wonder if belt has any bug-free integration.”

Venus is another BSC protocol for lending and borrowing via the minting of synthetic stablecoins.

Belt Finance is the latest in a lengthening list of BSC DeFi protocols to get exploited. On May 28, the BurgerSwap DEX was attacked resulting in the draining of $7.2 million.

So far this year, Cream Finance, bEarn, Bogged Finance, Uranium Finance, Meerkat Finance, SafeMoon, and Spartan Protocol have all suffered exploits on Binance Smart Chain. Binance has now turned to blockchain intelligence company CipherTrace for analytics support in a bid to mitigate further incursions.