FLOKI: Memecoin wants to position itself more securely by abolishing DeFi bridge
Originally posted here.
By: Stephan Fiedler
At Memecoin FLOKI, the community has voted in a referendum to abolish its own bridge between the Ethereum (ETH) and Binance Coin (BNB) ecosystems for […]
At Memecoin FLOKI, the community has voted in a referendum to abolish its own bridge between the Ethereum (ETH) and Binance Coin (BNB) ecosystems for security reasons.
Memecoins such as Dogecoin (DOGE) or Shiba Inu (SHIB) are controversial in the crypto scene, and their speculative potential usually exceeds their utility value. FLOKI is known after Elon Musk’s dog, the Tesla CEO professes his sympathies for Memecoins and Dogecoin in particular. In that respect, you don’t necessarily need to have heard of FLOKI before; a good year and a half after its launch, FLOKI ranks around 200th among the most capitalized cryptocurrencies.
But now an unusual maneuver at FLOKI is causing increased attention. As revealed in an official blog post , it was decided by an overwhelming majority of 99.7 percent in a referendum to destroy nearly 5 trillion FLOKI theoretically worth just over $100 million. Through this process, known as “burning” in crypto lingo, FLOKI wants to make it possible to abolish a bridge between the Ethereum (ETH) and Binance Coin (BNB) ecosystems that was established in the early days.
This “bridge,” according to FLOKI’s account, was a guarantor of capital settling in the early months, as investors could easily switch their FLOKI there from the Ethereum version to the Binance Coin version, or vice versa. But by now, FLOKI has established itself so well in the market that there is no longer a need to support its own bridge, they say. The bridge shutdown, scheduled for Feb. 9, will also eliminate a security risk, it said. Experts have noted that about 50 percent of the loss amounts from hacks in the Decentralized Finance division are due to attacks on “bridges.” The most spectacular case in 2022 was the attack on Ronin in the Axie Infinity (AXS) ecosystem with a good $600 million in loot.
Conclusion: restructuring at FLOKI a trendsetter?
Linking actual incompatible crypto ecosystems through bridges is widespread despite security risks; values of hundreds of millions of US dollars are moved through bridges every day. FLOKI explicitly states that problems with its own bridge could jeopardize the entire project. But whether the directional decision at FLOKI will also encourage communities at other altcoins to weigh the benefits and risks at “Bridges” remains to be seen.