‘Funds Are Safe,’ DeFi Platform Synthetify Says in Shutting Down
‘Funds Are Safe’ DeFi Platform Synthetify Says in Shutdown Tweet
(Bloomberg) -- A new cryptocurrency platform for trading synthetic assets said it was forced to shut down shortly after its debut because of bad data provided by the Pyth Network, a price feed backed by some of the world’s most well-known trading and exchange firms.
The Synthetify platform added that “funds are safe” in a tweet announcing the halt of its decentralized exchange on Tuesday, a few hours after its launch on the Solana blockchain. It added in a later post at 3:06 p.m. New York time that the issues had been resolved and it would remain shut down for the next 12 hours.
In its own tweet, Pyth blamed the issue on an error in an underlying software library used to make calculations for time-weighted average prices, and said a fix has been deployed.
It also added that no funds were lost.
This is the second known major issue involving the Pyth Network in less than two weeks. The data feed on Sept. 20 erroneously showed a roughly 90% plunge in the price of Bitcoin after two unidentified firms that supply prices to the platform encountered trouble dealing with decimals. Meanwhile, Liquid Network, another crypto platform, was down Monday and into Tuesday because of an unexpected issue with an upgrade.
The Synthetify platform allows users to “mint,” or create, tokens that track the prices of other assets by posting collateral in the form of the project’s own Synthetify Token or other cryptocurrencies, according to its website. The project aims to let users trade and mint synthetic assets 24 hours a day, seven days a week.
Like other decentralized-finance projects, Synthetify does not require users to go through the “know your customer” process that traditional banks and other financial firms are required to employ in order to police fraud, corruption, money laundering and assorted other shady financial activity.
Synthetic crypto assets tracking stocks and other traditional investments have caught the attention of Securities and Exchange Commission Chair Gary Gensler, who has said DeFi platforms must comply with the securities laws governing the underlying assets.
The Pyth service provides data on the prices of stocks, metals, traditional currencies and crypto assets to software running on the Solana blockchain. The feed is backed by about two dozen high-speed traders and exchanges that count among the most sophisticated companies in global markets.
©2021 Bloomberg L.P.