Ostium has halted trading after an exploit tied to a compromised oracle signer key drained nearly $18 million USDC from its liquidity vault, according to blockchain security firm Blockaid.

Blockaid reported that the attacker gained control of an oracle signer private key, allowing them to bypass the protocol’s verification process and submit future-dated price reports that favored their trades. Using a registered PriceUpKeep forwarder, the attacker repeatedly opened and closed positions through delegated actions, extracting profits without taking genuine market risk.

The security firm said the exploit triggered around 20 trading loops that steadily drained funds from Ostium’s main vault. On-chain records show the attacker withdrew between $11.86 million and $18 million USDC, equal to roughly 28% of the protocol’s $63 million total value locked at the time of the incident. The primary exploit transaction can be verified on Arbiscan.

Ostium, which operates on Arbitrum, offers decentralized perpetual trading for tokenized real-world assets, including equities, commodities, foreign exchange markets and stock indices.

Oracle key compromise enabled repeated profit extraction

Instead of exploiting a flaw in smart contract code, the attacker abused trusted oracle infrastructure after obtaining a valid signer key. According to Blockaid, the manipulated oracle reports allowed favorable prices to pass protocol checks, making each trade appear legitimate while transferring losses to the liquidity vault.

The incident has renewed attention on oracle security as decentralized finance protocols increasingly depend on external data feeds for pricing. Blockaid attributed the exploit to compromised signing credentials rather than a pricing error or market manipulation through normal trading activity.

The protocol has since paused trading while the investigation continues. Users have been advised to follow Ostium’s official communication channels for updates on withdrawals and any further recovery measures.

Institutional backing failed to prevent another security setback

Before the exploit, Ostium had raised about $27.8 million from investors including General Catalyst, Jump Crypto, Coinbase Ventures, Wintermute and GSR. The incident occurred despite the project’s institutional backing and multiple security audits, highlighting that infrastructure outside audited smart contracts can still become a critical point of failure.

The attack also adds to a series of recent security incidents affecting crypto platforms. Earlier this month, crypto.news reported that Ctrl Wallet announced it would permanently shut down after a separate security exploit affecting some Cardano wallets.

The company gave users until Aug. 3 to move their crypto assets before wallet functions, including sending, receiving and swapping, are disabled, leaving only recovery phrase exports available.

Elsewhere in the Arbitrum ecosystem, Secret Network recently proposed migrating its SCRT token from Cosmos to Arbitrum, citing security concerns, weaker liquidity and aging code on its current network. The proposal includes a one-time Sept. 1 snapshot that would distribute a new ERC-20 SCRT token on Arbitrum to eligible native and staked SCRT holders.

As projects continue expanding onto Arbitrum, the Ostium exploit demonstrates that securing oracle infrastructure remains as important as auditing smart contracts. According to Blockaid’s findings, a single compromised signer key was enough to bypass trusted price verification and inflict multimillion-dollar losses within hours.

The US Securities and Exchange Commission approved a rule change that expands options limits for BlackRock’s Bitcoin ETF, IBIT. The decision raises the contract limit from 250,000 to one million contracts. Consequently, the change supports growing trading activity and strengthens the Bitcoin ETF market structure.

US Sec Expands BlackRock Bitcoin ETF Options Capacity

The US Securities and Exchange Commission approved a proposal filed by NYSE Arca for IBIT options. The approval became effective immediately under the existing regulatory framework. Meanwhile, the regulator continues accepting public comments on the rule change.

The updated rule increases position and exercise limits from 250,000 contracts to one million contracts. Therefore, the new threshold reflects stronger trading activity across the BlackRock Bitcoin ETF market. It also aligns the exchange with recent changes adopted by other major options venues.

NYSE Arca submitted the proposal under Section 19(b)(1) of the Securities Exchange Act and Rule 19b-4. The exchange explained that current market conditions justify the expanded contract limit. As a result, the revised cap supports larger trading strategies without reaching previous restrictions.

The exchange also noted continued growth in options activity linked to the iShares Bitcoin Trust ETF. Larger limits provide market participants with greater flexibility during active trading sessions. In addition, market makers can manage positions more efficiently under the revised framework.

Nasdaq ISE, Nasdaq PHLX, and BOX Exchange already support similar position limits for comparable products. Therefore, the latest approval creates greater consistency across regulated options markets. The decision also reflects the continued expansion of exchange-traded Bitcoin investment products.

The BlackRock Bitcoin ETF has recorded strong trading activity since its launch. Its options market has also expanded alongside increasing demand for listed Bitcoin products. Consequently, the updated limits better align with the ETF’s current trading volume and liquidity.

BlackRock Earnings Support Broader Market Momentum

The regulatory approval followed BlackRock’s second-quarter fiscal 2026 earnings announcement. The company reported a 31% year-over-year increase in quarterly revenue. It also announced plans to increase its quarterly share repurchase target to $550 million.

The earnings report highlighted continued business expansion across BlackRock’s investment platform. Strong financial performance added further attention to the firm’s Bitcoin ETF business. Meanwhile, IBIT remained among the firm’s closely followed exchange-traded products.

Higher options limits allow larger institutional trading strategies within existing exchange rules. Consequently, professional market participants can execute broader hedging and portfolio management activities. The expanded capacity also supports more efficient options market operations.

The updated limits may also improve overall liquidity within the BlackRock Bitcoin ETF options market. Better liquidity generally supports tighter pricing and smoother trade execution. Therefore, larger position limits can contribute to stronger market efficiency over time.

The approval also reflects broader development across the regulated digital asset investment sector. Bitcoin ETFs continue attracting significant trading activity across major US exchanges. As a result, exchanges have adjusted market rules to accommodate growing participation.

Bitcoin ETF Market Continues To Mature

The latest decision adds another milestone to the evolution of regulated Bitcoin investment products. Exchange operators have steadily updated trading frameworks as market activity expanded. Consequently, regulatory adjustments now follow increasing demand for listed Bitcoin products.

BlackRock also remained active across broader digital asset initiatives beyond exchange-traded funds. The company recently joined an industry initiative exploring tokenized stocks and US Treasury securities. That effort includes several major financial institutions participating through the DTCC testing program.

Traditional financial firms continue expanding blockchain-related projects alongside regulated investment products. At the same time, digital asset infrastructure continues to develop across multiple market segments. These parallel developments support broader integration between traditional finance and blockchain technology.

The BlackRock Bitcoin ETF has maintained steady market attention, as evidenced by both trading activity and fund flows. Expanding options limits provide additional operational capacity for larger market participants. Therefore, the latest SEC approval strengthens the infrastructure supporting regulated Bitcoin ETF trading.

The approval also demonstrates how exchanges continue adapting existing market rules to changing trading conditions. Growing product adoption has encouraged exchanges to modernize options frameworks for digital asset funds. As a result, the regulated Bitcoin ETF market continues advancing through incremental structural improvements.

Aave has deployed its V4 lending infrastructure on Avalanche, extending the protocol’s newest market architecture beyond Ethereum for the first time. The move is positioned as a foundation for lending pools that can be tailored to different collateral types—potentially including tokenized real-world assets—while still benefiting from shared liquidity across the Aave network.

Announced as the start of a broader rollout, the Avalanche launch introduces Aave V4’s “Hub & Spoke” model. In this setup, specialized lending markets can set their own collateral requirements and risk parameters, but draw on liquidity routed through Aave’s overarching infrastructure.

Key takeaways

• Aave V4 is now live on Avalanche, representing the protocol’s first expansion of its latest lending framework beyond Ethereum.
• The Hub & Spoke architecture lets new lending markets define custom collateral rules and risk settings without fragmenting liquidity.
• Aave says one of the early Avalanche markets is planned to support borrowing against tokenized assets.
• Aave is the largest decentralized lending protocol by total value locked, with nearly $14 billion across 23 blockchains, per DeFiLlama data.

Why Aave’s Hub & Spoke design matters on Avalanche

The core promise of Aave V4’s Hub & Spoke approach is flexibility: different lending markets can be configured for distinct collateral profiles while remaining connected to a common liquidity backbone. For users, that can mean a wider selection of supported collateral types and potentially more tailored risk controls. For builders and market creators, the model is designed to make it easier to launch specialized credit markets without starting from scratch on liquidity and protocol-level plumbing.

According to Aave, the architecture is intended to support a broader range of collateral than earlier protocol iterations. While Aave has long relied on established DeFi-native assets, the V4 approach is explicitly oriented toward accommodating more complex collateral arrangements—an area that has become increasingly important as tokenized financial assets move closer to mainstream on-chain use.

Tokenized assets as collateral: from concept to configured markets

Aave says that, among the first markets planned on Avalanche, it will support borrowing against tokenized assets. The protocol also indicates that future specialized markets on Avalanche could extend to tokenized categories such as US Treasurys, money market fund shares, private credit, and corporate bonds—each with customized collateral requirements and risk parameters.

That framing reflects a larger shift in the way tokenized real-world assets are being used. Rather than limiting tokenization to settlement or trading, institutions and blockchain infrastructure providers are increasingly focused on collateral use cases—where tokenized holdings can back borrowing and liquidity strategies in both traditional and decentralized finance.

For example, Cointelegraph previously reported that Franklin Templeton partnered with Binance in February to enable institutions to use tokenized money market fund shares as off-exchange collateral, while keeping the underlying assets in regulated custody. In the following month, Nasdaq announced plans to integrate its collateral management tooling with Talos’ digital asset infrastructure to streamline institutional workflows for managing tokenized collateral, combining collateral management, risk monitoring, and trade surveillance.

Other infrastructure firms are also aiming at the “operational layer” required for real-world asset collateral. In May, DTCC said it would integrate Chainlink technology into its tokenized collateral platform to support near real-time movement, valuation, and settlement ahead of a planned launch in the fourth quarter.

A broader institutional push meets DeFi lending demand

Aave’s Avalanche deployment arrives as the institutional ecosystem around tokenized assets keeps expanding. The latest wave is not only about issuance or custody, but about creating systems that can actually support borrowing, valuation updates, and risk controls in a way that financial institutions find usable.

More recently, Grove announced a $500 million warehouse lending facility with Galaxy Digital to finance institutional crypto-backed loans using blockchain-based infrastructure. While not directly tied to Aave V4, the move fits the same direction: institutions are building facilities and partnerships that rely on tokenized or blockchain-based infrastructure for collateral-backed lending.

At the same time, the category of tokenized real-world assets continues to grow. According to RWA.xyz, more than $34 billion worth of real-world assets are currently tokenized on public blockchains, up from about $12.8 billion a year earlier—an expansion that suggests collateral-backed DeFi markets may have more potential counterparties as the supply of tokenized assets increases.

What investors and users should watch next

With V4 now launched on Avalanche, the next questions are less about whether tokenized collateral is possible and more about how quickly specific markets go live and what collateral configuration details look like in practice. Readers should watch for Aave’s early Avalanche market rollout, signals about supported collateral types, and how the Hub & Spoke model performs as more specialized lending pools are introduced.

DeFi lending has historically been constrained by which assets can be supported efficiently and how risk parameters are enforced. Aave V4’s architecture is designed to reduce those barriers—so the key test will be whether tokenized collateral markets can scale with appropriate risk controls without sacrificing liquidity.

BlackRock’s iShares Bitcoin Trust has secured a major regulatory win after the U.S. Securities and Exchange Commission approved a fourfold increase in the ETF’s options position limit from 250,000 to 1 million contracts.

According to a notice published by the U.S. Securities and Exchange Commission, a rule change submitted by NYSE Arca has become effective immediately, allowing the exchange to raise the position and exercise limits for options linked to the iShares Bitcoin Trust ETF.

The regulator said the filing was made under Section 19(b)(1) of the Securities Exchange Act and Rule 19b-4 while continuing to seek public comments on the proposal.

The approval gives traders access to significantly larger options positions tied to the world’s largest spot Bitcoin ETF by assets. It also arrives as institutional interest in U.S. spot Bitcoin ETFs continues to grow, with IBIT remaining one of the strongest-performing funds in the category over recent months.

NYSE Arca says trading growth justified the increase

NYSE Arca stated in its filing that the previous 250,000-contract limit no longer matched trading activity in IBIT options. The exchange argued that increasing the cap to 1 million contracts would better accommodate current market demand while allowing market makers to manage inventory and hedge positions more effectively.

The exchange also noted that the revised limit is consistent with similar changes already recognized for competing options venues, including Nasdaq ISE, Nasdaq PHLX, and BOX Exchange. By aligning the limits across exchanges, NYSE Arca said participants would be able to trade under a more consistent regulatory framework.

Although the SEC allowed the proposal to take effect immediately, the agency said it will continue accepting public feedback before reaching a final conclusion on the filing.

For institutional investors, the higher ceiling removes a practical restriction that could limit large hedging or trading strategies. According to NYSE Arca’s filing, expanding the available contract limit should support smoother options trading without forcing large participants to divide positions because of exchange-imposed caps.

BlackRock earnings add to positive momentum

The regulatory decision has arrived shortly after BlackRock released its fiscal second-quarter 2026 earnings. The asset manager reported a 31% year-over-year increase in revenue and announced plans to raise its quarterly share repurchase target to $550 million, adding another positive development for the firm’s investment business.

At the same time, IBIT has remained in focus after recording strong investor inflows over the past week, reinforcing its position as one of the largest spot Bitcoin exchange-traded funds in the U.S. market.

BlackRock has also expanded its presence beyond crypto ETFs. Earlier this week, the firm joined the Depository Trust & Clearing Corporation tokenization pilot alongside JPMorgan Chase and Goldman Sachs to explore blockchain-based settlement for stocks and U.S. Treasuries.

While traditional exchanges continue expanding Bitcoin ETF derivatives, tokenized equity trading is also gaining traction on blockchain-based platforms, giving crypto investors additional ways to access equity exposure.

The SEC’s latest approval applies specifically to regulated options listed on NYSE Arca and does not affect trading rules for tokenized securities.

Coinbase’s Jesse Pollak said he is stepping back from leading the Base app after acknowledging that his bet on an onchain social economy failed to drive crypto adoption as he had expected.

The Base creator said he had spent the last two years betting that builders and onchain-native social experiences, including Farcaster, Zora, mini apps and creator coins, would fuel crypto’s next growth wave. But in a post on X on Wednesday, he said while developers did spur adoption through products like stablecoins, prediction markets and perpetual futures, social applications “disintegrated completely.”

“I was definitively wrong,” Pollak wrote, adding that Base’s focus on social left it behind competitors in key areas including trading, tokenization and payments.

As part of the pivot, Pollak said that the leadership of Base app will return to Coinbase, where popular crypto investor Jordan Fish, also known on X as ‘Cobie,’ will oversee its development. Pollak said Fish will work to make the Base app “the best damn app for onchain,” including expanding beyond the Base ecosystem, while Base itself will prioritize trading, payments and AI agents as it seeks to become infrastructure for global finance.

Researchers at Stanford University and Singapore Management University found that Polymarket’s five-minute Bitcoin prediction markets create incentives for traders to manipulate spot prices around settlement, allowing sophisticated participants to profit at the expense of retail traders.

The study examined contracts in which traders bet on whether Bitcoin’s price would end above or below a predetermined level after five minutes. Because the contracts settle using Chainlink price feeds based on Bitcoin’s price at the end of each trading window, traders have an incentive to influence the spot market immediately before settlement.

Analyzing trading activity before and after Polymarket introduced the contracts in July 2024, the researchers found sharp increases in Bitcoin spot-market order flow just before settlement, followed by rapid price reversals, which were consistent with settlement-price manipulation.

The study estimated that the behavior transferred about $1.28 million from ordinary traders to manipulators during the sample period. The researchers said extending contract durations from five minutes to 15 minutes largely eliminated the effect.

Related: SOL rallies as Solana memecoins, prediction market activity surge: Are bulls back?

The researchers said the results do not indicate prediction markets are inherently vulnerable to manipulation, arguing instead that settlement design can reduce the risk. They pointed to longer settlement windows and alternative pricing methods, such as time-weighted average prices, as potential solutions.

The findings could extend beyond crypto. The paper notes that traditional exchanges, including Nasdaq and Cboe, have proposed event contracts tied to asset prices, making contract design an increasingly important consideration as prediction markets expand into regulated financial markets. 

World Cup fuels prediction market growth

Prediction markets posted record trading volumes in June as the expanded 2026 FIFA World Cup fueled activity across the sector. According to DefiLlama data, Kalshi processed about $9.4 billion in trading volume during the month, while Polymarket International handled roughly $4.3 billion.

The platforms’ World Cup winner markets have since generated more than $5.4 billion in combined trading volume, with Polymarket processing about $4.25 billion and Kalshi about $1.2 billion, according to data from the two platforms at the time of writing.

World Cup winner bets on Polymarket. Source: Polymarket

The sector’s growth has coincided with mounting legal scrutiny. Several US states have challenged companies, including Kalshi and Polymarket, this year, while the Commodity Futures Trading Commission has argued that federally regulated event contracts fall under its “exclusive jurisdiction” rather than state gambling laws.

The dispute is now moving through the federal courts, and legal observers have said conflicting appellate rulings could eventually prompt the US Supreme Court to decide whether states or the CFTC have primary authority over prediction markets.

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Bitcoin (BTC) saw three-week highs on Wednesday as US inflation data beat expectations for a second day.

Key points:

• Bitcoin sees copycat bullish price action as US inflation data cools for a second day running.
• Risk assets get a more positive outlook as Fed rate-cut odds drop.
• Traders stay conservative over Bitcoin’s ability to continue higher.

Bitcoin gains after “much better-than-expected” US PPI

Data from TradingView showed BTC/USD reaching $65,500 for the first time since June 22.

BTC/USD 12-hour chart. Source: Cointelegraph/TradingView

The June print of the Producer Price Index (PPI) came in cool at 5.5% year-on-year after a 0.3% monthly decrease, per data from the Bureau of Labor Statistics (BLS).

“The June decline in the index for final demand can be attributed to prices for final demand goods, which fell 1.4 percent. In contrast, the index for final demand services moved up 0.2 percent,” an official news release stated.

PPI one-month % change. Source: BLS

Reacting, economist Mohamed El-Erian was upbeat on the outlook for risk assets and Federal Reserve policy.

“These much better-than-expected figures are set to boost equities and further temper market expectations for upcoming interest rate hikes,” he wrote in a post on X.

PPI joined Tuesday’s Consumer Price Index (CPI) release, which surprised to the downside despite macro pressure from the US-Iran war and its impact on oil prices.

“Inflation expectations continue to decline,” trading resource The Kobeissi Letter added, referencing bets on a Fed interest-rate hike from users of prediction service Polymarket.

The latest data from CME Group’s FedWatch Tool also showed change afoot in expectations for the Fed’s September decision, with a 0.25% hike no longer the most likely option.

Fed target rate probability comparison for September FOMC meeting (screenshot). Source: CME Group

BTC price momentum battles bear-market history

Assessing current BTC price action, market participants avoided overly bullish takes.

Related: Bitcoin gets new $80K August target: Watch these BTC price levels next

“Liquidity sitting above at the $65.6K mark and most importantly, the $67.2K mark,” trader Daan Crypto Trades wrote on X, referring to exchange order-book liquidity.

“Breaking above the latter would turn this into a bigger move and we can start targeting the $70K+ region again and truly position Bitcoin in the middle of its $60K-$80K range.”

BTC/USDT perpetual contract four-hour chart. Source: Daan Crypto Trades/X

Trader and analyst Rekt Capital noted that BTC was approaching its 50-month exponential moving average (EMA) — a level from which the price should be rejected if bear-market history were to repeat.

“If we follow the same statistical pattern seen over the past 12 months, BTC would likely derisk for the remainder of the month and push back down,” trader Killa added on the topic.

BTC chart. Source: Killa/X

A faulty oracle that caused a $9 million exploit over the weekend was patched on 11 chains in the days leading up to the attack, with the exploited Hedera deployment left vulnerable.

The affected protocol, Bonzo Lend, explained that the oracle accepted an extreme mispricing of the attacker’s collateral asset, which allowed them to borrow funds far in excess of the collateral’s true value.

A further $1 million was extracted by a white-hat hacker.

The vulnerable oracle was created by blockchain infrastructure developer Supra Network, which boasts oracles “live on 67 mainnets.”

Shortly after the exploit, Plasma’s Usmann Khan noted that Supra had upgraded many of its oracles in the days leading up to the exploit, but not the contract on Hedera, which Bonzo Lend used.