Loads of TradFi rent-a-quotes talking about DeFi experiencing some kind of hackalypse this year.
This is a huge exaggeration, but it does raise an important question: with multi-chain and cross-chain transactions becoming more common, how can DeFi ensure maximum security?
At [rhino.fi]( a layer 2 DeFi aggregator, we get round the problem by establishing liquidity outposts on different chains and using StarkEx as a router (you can find out more about the tech [here]( and we’ll be creating a more dedicated blog post very soon).
Would be interested to find out how others are addressing the problem though…
6 thoughts on “How can DeFi reduce hack risk this year?”
Code audits, pentests and bug bounty programs are key. Polygon’s bridge is considered amongst the safest for these reasons. Every web2 company worth it’s salt has these measures in place. They are especially necessary with all this investor money at risk. Security should be our top priority, that is how you reduce hack risk.
More security surveillance on their network, insurance, a high and strong firewall, and a well-active ecosystem just like how gems like Sylo for the Sylo wallet and a few solid ones out there like AR have been running without any breaches.
What is it you are trying to secure/protect and what are the risks are.
The foundational aspect of DeFi that needs maximum security is protecting digital assets, private keys and recovery phrases.
Are you asking about protecting cross-chain (i.e. bridged) transactions? If a user wants maximum security for their digital assets (and or investments) I would say do not use bridges.
Attacks on bridges have resulted in over $2.5bn in loses (in the past 2 years) and it will continue. [https://cointelegraph.com/news/bridge-attacks-will-still-pose-a-major-challenge-for-defi-in-2023-security-experts](https://cointelegraph.com/news/bridge-attacks-will-still-pose-a-major-challenge-for-defi-in-2023-security-experts)
If you absolutely must use a bridge, I’d suggest independent auditing and real-time monitoring of transactions (perhaps using machine learning). But I’ll abstain.
Everythink is save until it isnt. Even CeFi can be hacked.
Until the whole crypto space gets an insurance layer (there are protocolls out there like [Nexus Mutual](https://app.nexusmutual.io/home) – but what if they get hacked xD) there will always be “this Smart Contract can be hacked” risk.
Most hacks are due to human errors. Of course, well-built blockchains are going to reduce the event of hacks. But humans also need to do better. Another solution could be the EDI-like systems (Geeq, for instance) that could keep track of data history. This could also reduce data breaches as well. But ultimately, data breaches are caused mostly by human errors. Education is important.