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⌐◪-◪ → Munchables, a web3 gaming platform on ETH L2 Blast, was exploited for $62.5M yesterday — one of the biggest exploits of the year.

The project’s smart contracts let the developer (hacker) transfer funds at their discretion, which nobody seemed to notice until it was too late.

On-chain sleuth, ZachXBT, suggests the hacker might be linked to North Korean hackers, but this hasn’t been confirmed.

Fortunately, the hacker agreed to give his private keys to Blast’s core developers with zero conditions/ransom — shocking, I know. Blast confirmed the funds are secured and the team is working on distributing funds back to users safely.

Aside from the potential North Korean ties and the hacker’s shocking decision to return funds, this hack is interesting because it highlighted a massive centralization bottleneck with the L2 network Blast.

Without getting into the technical details, Blast had a path to reverse the transaction and recover the $62M stolen from Munchable — killing any notion of decentralization.

So while the funds are safe, Blast has taken a massive reputation risk which could have further repercussions.

This also begs the question: Would Blast be liable if the hacker didn’t return the funds, and Blast didn’t reverse the transaction?

Bonus: ZachXBT pulled no punches in this tweet to the hacker.

⌐◪-◪ → Looks like the SBF saga will soon end with his sentencing tomorrow in Manhattan. Prosecutors are currently proposing he serve 40-50 years, which is essentially a life sentence for Sam.

Marc Litt, Bernie Madoff’s former prosecutor, predicts Sam will be in for a 25-35 year sentence after Judge Kaplan weighs all the facts and circumstances.

Meanwhile, $825k in bets are on the line as Polymarket users bet on how long SBF’s sentence will be. The bets are placed as follows:

• 5-10 years → 4%

• 10-20 years → 11%

• 20-30 years → 26%

• 30-40 years → 26%

• 40-50 years → 26%

• >50 years → 8%

So it looks like Marc’s prediction sits a little below the median bet, but pretty close to what the prediction market is guessing. Anyway, stay tuned for tomorrow’s big debut (sentencing). May the odds be ever in your favor Sam.

⌐◪-◪ → Bitcoin broke back over $70k and the spot Bitcoin ETF outflows magically reversed. The good ol’ veblen good effect back at it again: as price goes up, surprisingly so does demand.

The chart above shows the 5-day outflow streak the Bitcoin ETFs endured, but all of that was recovered in one day (yesterday) which was the best day (as measured by net inflows) in the last 2 weeks.

A few more macro updates for you that might be useful

• over 95% of BTC supply is now in profit

• sell-side liquidity all-time low vs. demand

• wealth managers eyeing 3% BTC allocation

• the halving is in 23 days on 4/20

These updates together paint a pretty clear picture that Bitcoin has a lot more room to grow during this cycle — the only semi-bearish indicator there is the amount of BTC in profit. Historically when this gets high, people dump.

Lastly, a BTC whale (5th richest wallet) just moved $6B, not sure if that’s bullish or bearish. LMK what you think in Specs Chat!

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