WTF makes Bebop so secure?

In the dynamic landscape of DeFi, security is paramount, and traders seek platforms that offer efficient and safe trading experiences. The decentralized nature of DeFi platforms, while offering greater accessibility and autonomy, also introduces unique challenges and risks. Numerous incidents serve as reminders of the criticality of robust security measures.

So, how does Bebop deliver secure, reliable trading in DeFi? In this blog post, we will focus on Bebop and its secure-by-design approach to trading.

In short, we prioritize security by implementing a settlement contract that acts as a secure layer while conducting price discovery and order management off-chain.

• By utilizing atomic swaps, we avoid the locking of funds on-chain, enhancing security and reducing the risk of centralized points of failure.
• Our platform emphasizes safety through simplicity, ensuring that streamlined processes minimize potential vulnerabilities.
• Additionally, we prioritize user security by verifying user-created signatures and enabling atomic exchange of balances.

With these measures, Bebop establishes a secure and user-friendly trading environment, providing traders with peace of mind in the ever-evolving landscape of DeFi.

Atomic Swaps

In recent years, we’ve seen automated market makers (AMMs) become one of the most common types of exchanges. This technique involves liquidity providers storing their assets in pools, where users can tap liquidity through an on-chain process. Liquidity is limited by the amount of tokens available in the pool, and price is determined via a formula. However, pooling in this manner and increasing TVL (total value locked) in smart contracts creates a honeypot and therefore attracts hackers.

Bebop exchanges assets through an atomic swap — a process whereby the participant’s balances are directly transferred between each other in a single transaction. The atomicity ensures that the trade either fully settles or reverts. By avoiding the need for assets to be stored in Bebop’s smart contracts, we reduce the attack vectors and attractiveness for exploits.

Safety through Simplicity

Bebop’s commitment to security is evident in its design choices. The platform employs a tried-and-true method for swaps, validating user-created signatures and atomically transferring balances. This approach has stood the test of time, with no known exploits since the inception of the first DEX, Etherdelta. Notably, the 2017 Etherdelta hack was solely a front-end issue related to users importing private keys, while the underlying contracts remained flawless. Bebop’s reliance on this secure and auditable swap model bolsters user confidence and mitigates potential vulnerabilities.

Order-Based Swaps: A Simpler Approach

Bebop’s order-based swap mechanism is intentionally kept simple and is therefore easily auditable. The verification of user signatures serves as the initial step and majority of the process, ensuring the integrity of transactions. The simplicity sets it apart from more complex models around today. While other DEXs often need to employ double complex processes to calculate prices and tap liquidity pools, Bebop’s process on-chain is as simple as moving an exact amount of tokens from one party to another — it does not rely on oracles. This results in less possibility of smart contract bugs that ultimately lead to security compromise.

Additionally, Bebop refrains from incorporating secondary or special features, avoiding unnecessary complexities. Furthermore, the absence of backdoors and governance-controlled parameters strengthens the platform’s resilience and immutability. The focus on simplicity ensures transparent and immutable signature-based swaps, enhancing the overall security posture.

Unraveling the Security Layers

Order-based swaps employed by Bebop entail robust communication and validation between the user, server, and private market makers. Multiple touchpoints in this process make potential attack vectors impractical. To exploit the system, an attacker would need to coerce a user into signing an unauthorized order, bypass Bebop’s server validations, and compromise market makers. Such a multi-layered approach significantly mitigates the risks associated with unauthorized transactions and reinforces the security of Bebop’s trading platform.

Building Trust and Expanding Approvals

Bebop’s commitment to security has garnered trust from industry-leading market makers like Wintermute, who acknowledge the low risks associated with the platform.

Additionally, Bebop continues to refine its contract design, introducing Permit2 for approvals in upcoming versions. Permit2 allows users to use signatures to manage token transfer permissions, instead of approving by transactions on-chain. Not only does this create a more seamless experience but it is also a more secure option. Permit2 comes with advanced features such as expiring permissions that prevent many of the issues with regular approvals, e.g. when an old contract with standing approvals is exploited. In addition, since Permit2 signatures are free, users are not tempted to approve contracts for their entire balance to save fees, further reducing the potential harm from any attacks. Overall these enhancements reduce the risks by allowing users to employ free, single-order, and expiring approvals for seamless swaps.

Bebop’s RFQ on-chain model stands as a testament to its commitment to security and simplicity in DeFi trading. By eschewing pooled funds, relying on verified user signatures, and embracing auditable order-based swaps, Bebop enhances the safety and trustworthiness of its platform. With the support of esteemed market makers and ongoing developments to reduce risks on the approval side, Bebop provides traders with a secure and efficient environment to engage in decentralized crypto trading.