Crypto Exchanges seem to be a vulnerable target — here is how Uno Re protects them.
Crypto Exchanges took the main stage in DeFi space with their ease of use and emerging composability, and the popularity of these exchanges is on a constant rise. But as the old saying goes — with a slight adjustment- with great popularity comes great responsibility. Yes, we are talking about malignant hackers who are always on the lookout for flaws in smart contracts, which they can exploit to steal crypto exchange users’ assets.
Crypto Exchanges are targeted by malicious actors because their increasing popularity attracts more volume and variations of crypto assets. Additionally, since the concept is relatively new, some exchanges might also suffer from a lack of know-how, resulting in smart contract flaws.
While the number of crypto exchange users grew apace, these exchanges — and naturally, their users — have suffered from significant hacks in the last couple of years.
On November 30th, 2021, MonoX Protocol got attacked, and a total of $31 million worth of tokens were stolen by hackers who exploited a smart contract flaw.
According to Coindesk, the crypto exchange BitMart lost the equivalent of $196 million to a hack in December of 2021.
A more recent incident occurred on January 17, 2022, when Crypto.com Exchange fell victim to a hacker’s attack and as a result, temporarily halted withdrawals. It is reported, that the exploit led to a loss of over $34 million in ETH, BTC, and U.S. dollars.
In fact, an estimated $580 million has been lost to exchange-related exploits in the last two years alone.
Such security breaches are not new in the crypto world, but their size and frequency appear to be growing as cryptocurrency prices have surged over the past years. As the value of cryptocurrency grows, so do the risks posed by malicious actors looking to exploit possible flaws of the Crypto Exchanges.
Uno Re’s Solution to Crypto Exchange Hacks
We presume this has not been the most cheering article you’ve read recently. Well, whether we like it or not, there is an elephant in the DeFi space that needs to be addressed: Crypto Exchange hacks are serious possibilities, and they need to be treated as such — and by providing coverage to these Exchanges (like protection against Smart Contract Vulnerabilities in Liquidity Pools!), Uno Re does precisely that.
Additionally, insurance for these exchanges does not only benefit users but also the crypto exchange itself. How?
Users are bound to provide more liquidity to crypto exchanges where they know their assets are safe and protected. This ensures reduction in slippage — eventually leading to a greater trading volume on the exchange.
(Also, let us remind you that we recently introduced our affiliate programme, where users can introduce projects that they believe Uno Re should partner with and earn rewards in return. If you have a Crypto Exchange in mind that you think we could cover — sign up here! https://forms.gle/AtnspFA7RqUDehcN7)
As DeFi becomes mainstream, insurance providers will also come into play and improve the overall security of the DeFi space, enabling it to reach more investors and traders — Uno Re takes justified pride in being a vanguard in this arena.
About Uno Re
Uno Re is the world’s first decentralised insurance and reinsurance platform, allowing the community to invest and trade in ‘risk’ and receive sizable returns on their investments in one of the safest asset classes in the world. The platform will break barriers to entry for the retail investor by doing away with the historic pre-requisite of absurdly high capital generally needed to invest into the market while also introducing much-needed transparency into the industry as a whole. Uno Re will also allow the community to propose innovative insurance products to the space, thus propelling a new generation of Insurtech companies powered by the Uno Re ecosystem.
