Blockchain Bridge lost $320 million worth of ETH on February 2, 2022. The news doesn’t come as that much of a surprise as Decentralized Finance (Defi) hacks have been becoming increasingly more popular. As modern technology improves each day, there comes new sets of challenges. The hackers usually find a bug and varnish off with millions of dollars.
After the hack, Wormhole tweeted an announcement:
‼️ The wormhole network is down for maintenance as we look into a potential exploit.
📢 We will provide updates here as soon as we have them.
🙏 Thank you for your patience.
— Wormhole🌪 (@wormholecrypto) February 2, 2022
In the blockchain, the Wormhole team filed a plea seeking the culprit to return the cash and offering a $10 million reward in return.
This is yet another in a series of incidents where the Defi industry got burned and investors got slapped in the face with their pants down.
What’s wrong with Defi platforms?
Hacks have been around for quite some time, but what we need to do is find out how we can stop them from happening so frequently. We cannot continue to allow this criminality to occur without proper regulation and security measures that could help warn us before things get out of hand.
Having security measures such as multi-signature wallets that require more than one person’s approval before any transactions go through will help curb these crimes. Until then, the Defi industry faces a big hurdle: trust.
The Defi industry is still in its infancy compared to traditional finance, but it presents so much potential. The ability to borrow money across borders with minimal fuss and almost no fees will be a game-changer in itself. We cannot risk letting these crimes cause people’s interest in this new financial frontier to wane. We need to take action now before trust gets lost forever.
How To Prevent Hackers From Stealing Defi Funds
- Although there has been a lot of talk recently about things like ICOs and blockchain protocols, we cannot forget that Defi platforms remain under-researched and unregulated.
- No regulatory oversight combined with the endless opportunities for fraud makes this new financial frontier very dangerous if proper security measures are not put in place as soon as possible.
- Blockchain Bridge had everything going for it until one bug destroyed its reputation completely. Until these protocol bugs are fixed through heavy regulation from governing bodies, cryptocurrency remains a ticking time bomb.
When you think about the Defi industry, it’s easy to see how transactions could be delayed or go missing. Yet, it all comes down to trust and there are already measures in place to ensure this situation never happens again.
Blockchain Bridge might have lost over $320 million of ETH due to a bug on one of their smart contracts, but they were able to freeze the stolen funds using community power.
In this new era of technology, we cannot afford to let criminals continue their reign of terror without proper security measures put in place. We must develop blockchain protocols that make it easy to spot these thefts immediately instead of waiting around until millions of dollars get lost forever.
What can the world learn from Defi hacks?
It’s clear that the Ethereum protocol is vulnerable to attack and that we need more security measures in place. This vulnerability will be shared by all other blockchain protocols, but we cannot let this fact stop us from advancing with the technology for fear of losing everything.
The way I see it, there are two sides to this debate: critics and investors. The critics prefer traditional finance over anything that could possibly go wrong whereas investors simply want to take advantage of this new technology that promises substantial returns on their investments.
Binance has come up with something interesting to protect investors by building a $1 billion insurance fund against crypto hacks. Last month, hackers withdrew about $32 million from customer accounts that held roughly $34 million in Bitcoin and cash. Last week, attackers stole more than $80 million in digital assets from a blockchain extension developed by Qubit Finance.
Moves like this will definitely help small investors, especially with safeguarding against attacks by hackers. However, critics will still find something to complain about. We need more security measures in place and we need them now before people lose interest and move back to traditional finance!