Redefining DeFi Security: Why Current Audits Fall Short in Protecting Protocols

Eyal Meron highlights the need for advanced preventative tools in DeFi, as traditional audits and monitoring often fail to stop sophisticated hacks.

Eyal Meron, the CEO of Spherex Technologies, underscores the critical need for the decentralized finance (DeFi) sector to rethink its approach to security. Despite the widespread use of audits and real-time monitoring, recent events have shown that these methods alone are inadequate in preventing sophisticated cyberattacks.

For instance, on June 2, the Velocore protocol on Ethereum’s layer-2 network Linea was hacked, leading to a significant loss of $6.8 million in ETH. This exploit, caused by a fee overflow bug, forced Linea to temporarily halt its operations in an effort to contain the damage. Despite being audited by multiple firms, including Zokyo, Scalebit, and Hacken, and being monitored during the attack, the protocol was still compromised.

Meron emphasizes that this incident is not isolated; it is part of a broader trend of increasing losses due to various attacks across the DeFi space. According to DefiLlama, June alone saw losses exceeding $140 million from six separate protocol hacks, with July’s losses surpassing $277 million. Even more alarming, May recorded a staggering $373 million in losses from attacks that exploited everything from flash loan vulnerabilities to compromised private keys.

Meron argues that the DeFi industry must transition from a reactive to a proactive security stance. He advocates for the adoption of advanced preventative tools that can revert suspicious transactions during runtime, thus preventing potential breaches before they escalate into multi-million-dollar exploits. Additionally, Meron stresses the importance of DeFi teams being educated on the latest attack vectors and learning from past incidents involving rival protocols.

In conclusion, while the DeFi industry has made significant strides, Meron believes that the path to widespread adoption of Web3 technologies hinges on the sector’s ability to develop more robust security measures that can block malicious activities while ensuring the continuity of operations. It is time, he asserts, for a radical rethink of how security is handled in the crypto world.

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