DeFi Breaking Records — — Just Not The Good Kind
2022 has been a rough year so far for DeFi protocols. The ever-growing Web3 space has experienced exploits totaling $1.6 billion in the first 4 months of the year, a figure that surpasses the combined total lost in 2020 and 2021. Blockchain security analysis firm CertiK said that April 2022 “holds the record for highest dollar amount losses in flash loan attacks ever recorded by us” with those specific losses totaling around $301.4 million. In comparison, flash loan attack losses in January, February, and March of 2022 combined were only $6.7 million.
I have to admit, these numbers are fairly shocking. These are essentially bank heists, but instead of going up the teller and demanding $600 million, the bank is actually a fully automated ATM/investment machine with no middleman. The hacker comes in, looks at all the open-source innards of this ATM, finds the hole, swipes their hacked card, and grabs everything it can before taking off.
Although hacks are not completely preventable, the truth is it will take these kinds of events to truly secure our code through trial and error. However, I believe there are some gaps in the DeFi playbook that are sorely needed to help mitigate: proper product management, emphasis on continuous testing within a sandboxed mainnet environment, and a slower deployment schedule. Building out a product blueprint, coding, and definitive testing takes time. Hoping that the DeFi community comes out of this stronger and more resilient!
Written by: nikethereum.eth