Here’s what happened in crypto today
Today in crypto, Sky’s (formerly MakerDAO) use of externally owned accounts (EOAs) to manage $756 million in USDC reserves has raised questions about security and transparency, Donald Trump has picked David Sacks as his “A.I. & Crypto Czar,” and MicroStrategy has $17 billion in unrealized profits on its Bitcoin holdings as the cryptocurrency’s price topped a record $100,000.
Sky faces scrutiny over potential $756 million exploit flaw
Sky, formerly known as MakerDAO, is facing criticism for its reliance on an externally owned account (EOA) to manage $756 million in USD Coin reserves within its lite peg stability module (PSM).
Concerns have been raised by an X user around the protocol’s reliance on an EOA to manage a substantial portion of its reserves amounting to $756 million in USD Coin
USDCUSD
.
Critics argue this custodianship model could leave funds vulnerable to potential exploits or insider misuse.
After its recent rebrand to Sky and concerns surrounding the ability to implement a freeze function in the future, the risk of a breach or misuse of these EOA-managed funds could further impact the protocol’s reputation and user trust.
The lite PSM is a mechanism designed to assist Sky in maintaining the peg of its stablecoin to the United States dollar by allowing users to swap the stablecoin for USDC at a fixed rate.
As part of the migration plan, Sky will transfer reserves from the older PSM to the lite PSM in three phases, with $20 million initially moved.
However, the Lite PSM funds are allegedly controlled by an EOA, as claimed by the X user’s post on social media and the Sky forum page related to the lite PSM, raising accountability and security concerns.
Trump picks David Sacks for “AI and crypto czar”
Donald Trump has named former PayPal operating chief and now All In podcast host David Sacks as his lead policy adviser on artificial intelligence and crypto.