DeFi hacks and scam attempts costing participants $1.29 billion so far in 2021
Paris, France–(Newsfile Corp. – April 15, 2022) – Bybit, the world’s third most visited crypto exchange addressed prevalent DeFi security vulnerabilities and explored industrial-scale solutions at the Paris Blockchain Week Summit.
Risking it all – The Real Costs of High Yields in DeFi
From admin key compromises to rug pulls, a long list of high profile DeFi projects have fallen victim to hacking and scam attempts, already costing participants $1.29 billion in the year so far.
DeFi projects are particularly prone to security risks, said Lawrence Tan, Bybit’s spot business development director in a keynote address titled, DeFi Security: the Risks Behind the Yield and Mitigation. Almost 74% of blockchain security incidents were DApps and DeFi-related in 2021.
Even the most security conscious crypto veterans are not immune to DeFi risks. Tan himself narrowly dodged the PolyNework hack, having exited from liquidity mining in the protocol just two days before the hack cost victims $611 million.
Mitigating DeFi Risks – Be a Self-Reliant Investor
Tan says the simple rule of vetting your DeFi project carefully pays off.
“Consider open-source and audited projects by built teams with real names. Look for projects with higher popularity, larger TVLs and a good track record. If you are a beginner, you don’t need to rush into new projects even if it promises high yields,” Tan said.
Doing your own research, diversification and setting appropriate token allowance approvals are also on the DeFi security checklist, he added.
Centralized exchanges’ responsibility to protect
Tan’s technical analysis of the biggest DeFi hacks in history showed that centralized crypto services providers were popular targets. Ramping up KYC and AML efforts would help protect investors, he said.
“Centralized exchanges are one of the most important gateways for users to enter the crypto world. They have a responsibility to help mitigate DeFi risks for the users and for the community. They can play very important roles in services and in education,” said Tan.
Service providers dealing with risk-on assets should invest more in anti-phishing efforts and education, he elaborated.
Bybit has been actively helping the public understand DeFi and the associated risks through Bybit Learn, a publicly available online learning platform. Beginners can also dabble into liquidity mining and try out the Bybit wallet to gain experience in DeFi before they level up their investment portfolios and risk thresholds in the decentralized space.
He also said centralized exchanges are better positioned to provide cross-chain bridges for entry-level users, providing a safer and more customized experience.
“Chaos is very common at early stages. It happens to most innovations in human history. The industry will learn from failures and disasters. As an ecosystem the industry will improve itself. And this is how we move forward. So chaos is not a pit. Chaos is a ladder,” he concluded.
An early adopter of crypto technologies and a DeFi advocate, Tan brings a decade of blockchain experience to the Master Stage at Europe’s flagship event in blockchain, crypto and NFT.
Bybit is a Whale and Rhodium sponsor of the 2022 rendition of Paris NFT Day and Blockchain Week Summit. The conference concludes on April 14 after an action-packed three days of industry insights in blockchain, crypto and NFT.
Bybit is a cryptocurrency exchange established in March 2018 to offer a professional platform where crypto traders can find an ultra-fast matching engine, excellent customer service and multilingual community support. The Company provides innovative online spot and derivatives trading services, mining and staking products, as well as API support, to retail and institutional clients around the world, and strives to be the most reliable exchange for the emerging digital asset class.
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