Warning: Crypto Websites DNS Attack

Crypto Consumer App Lessons | Lombard $16M Seed Round

Marco Manoppo & Karon Pangestu
July 12, 2024

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Good Morning.

ETHCC was great - weird mixed of positivity and complacency, more thoughts coming over the weekend. For today, no more crypto - time to eat some chocolates.

In Today's Email:

What Matters: Squarespace DNS attack 💻
Founders Highlight: Lee, Levy & Zhao of Story Protocol 👾
Deal Flow: Lombard’s $16M Seed Round 🤝

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Narratives: Chop city continues, pay attention to how majors perform on HTF.

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WHAT MATTERS

DeFi Apps Hit by Squarespace DNS Registry Attack

Blockaid

State of play: Bobby Ong reported at 9:39 PM on July 11 about an ongoing DNS attack affecting Squarespace domain registrar. Multiple DeFi apps were targeted, including Compound Finance, which the attacker took control of.

According to Ong, the vulnerability was caused by Google's recent sale of its domain business to Squarespace. The forced migration removed 2FA, making domains vulnerable.
Celer Network announced it had been attacked but stated that its domain monitoring system detected and intercepted the takeover before it could succeed.
MetaMask announced it is providing a warning for users about potentially compromised apps linked to the attack.

0xngmi compiled a list of 128 domains registered with Squarespace that would be at risk of being hacked. The list included:

Pendle
Karak
Compound
Hyperliquid
dYdX
Polymarket
Orderly Network
NEAR
Flare
Litecoin

Why it Matters: Domain name hijacking is one of several attacks on the Web3 industry in the past year. In December, an attacker injected malicious code into the Ledger Connect library, affecting nearly the entire EVM ecosystem.

For builders and investors: Eventually the space needs to decentralize the whole stack; which might not be a priority at the moment but this incident shows just how many attack vectors there still are even after all this time.

BUILDER-INVESTOR HIGHLIGHT

Lee, Levy & Zhao of Story Protocol

Left to right: Lee, Levy & Zhao

Intro: Seung Yoon Lee, Jason Levy and Jason Zhao are the co-founders of Story Protocol, an open-source repository for IP that provides tools to manage the entire IP lifecycle, from creation to licensing and revenue sharing.

Lee is the CEO of Story, with Levy as the COO and Zhao as the Head of Protocol.
Currently, Lee is also a venture partner at Hashed and a board member of Asia Society.

Previous background: Prior to Story, Lee was a Global Strategy Officer at Kakao Entertainment. He sold his first venture, Radish, a mobile serialized fiction app, to Kakao for $440M in 2021.

Levy was previously a Director at Pocket Gems. He also spent five years as a financial analyst at Apple and founded the mobile entertainment startup Worlds Between Worlds.
Zhao was a Product Manager at DeepMind, working on implementing Google's AI models for industrial and enterprise use. He is also an active angel investor in frontier technology startups.

The big idea: In an interview, Zhao said that they (Story) “want to do for IP what bitcoin did for money.”

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INSIGHTS

4 Key Lessons for Consumer Crypto Apps

Credits to Nick Tomaino for the original tweet

State of play: Nick Tomaino believes that crypto applications will become a part of everyday culture in the next decade, and the industry will focus on consumer apps.

Here are the four key lessons from Nick's involvement in the most successful consumer crypto apps:

Persistence Beyond Profit:

Success takes time, so focus on a mission beyond making money. Polymarket faced many challenges but thrived because of its strong mission to bring truth through prediction markets.

Polymarket reached $423M in volume in 2024 and impacted the US Presidential election.

Balance Enthusiasts and Casual Users:

Products must appeal to both dedicated users and newcomers. Coinbase's decision to offer hosted wallets helped it grow into a $50B+ public company by balancing ease of use with crypto fundamentals.

Deep Understanding of Users and Culture:

OpenSea succeeded by deeply engaging with the NFT community and focusing on building a useful product rather than prestige.

Create Your Own Tribe:

dYdX showed the importance of establishing its ecosystem and moving from Ethereum to its chain. Apps that prove their utility can become independent and control their destiny.

DEAL FLOWS

Lombard’s $16M Seed Round

Lombard

Deal flows slowed down a bit this week, we saw $29M+ in deals 💼

Lombard, a restaking project focusing on exploiting the potential of Bitcoin in DeFi, has raised $16M in a seed round led by Polychain.

BabylonChain, Inc., dao5, Franklin Templeton, Foresight Ventures, HTX Ventures, Mirana Ventures, Mantle EcoFund, Nomad Capital, OKX Ventures, and Robot Ventures participated in the round.
Lombard also announced strategic partnerships and contributions from major exchanges Bitget, Bybit, OKX, and HTX.
Lombard aims to elevate BTC from a store of value into a productive asset which flows into the web3 economy and drives sustainable growth with its flagship product, LBTC.

Deal flows in the past week:

ThirdFi, $2M Pre-Seed Round
Satoshi Protocol, $2M Seed Round
Ampleforth, $1M Strategic Round
BOB, $1.6M Strategic Round
Idle, $2.4M Stratetgic Round
Term Finance, $5.5M Strategic Round
Rome Protocol, $9M Strategic Round
idOS, Undisclosed $ Strategic Round
Dora, $5.5M Private Round

QUICK BITES

NY Judge rejects Coinbase's efforts to subpoena Gensler.
US House fails to override Biden's veto to overturn SAB 121.
Marc Andreessen sends $50K in Bitcoin to AI Bot on Twitter.
Coinbase launching a crypto app to simplify user experience.
FTX lawyers counter Jump Trading’s $264M damages claims.
SEC drops its investigation into BUSD following probe into Paxos.

NOTEWORTHY READS

Arthur Hayes’s read on macro markets.
Paul Veradittakit’s read on supercomputer.
Bloomberg Tax’s read on SEC relaxing SAB121.

You need to spend at least 4hrs a day on twitter to understand what’s happening here
— DavidHoffman.eth/acc🦇🔊 (@TrustlessState)
6:57 PM • Jul 11, 2024

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.