Lately it has been dominated by a record number of hacks, especially from Decentralized Financeprotocols. These protocols are sometimes very well connected via so-called ‘bridges‘. As a result, you can use assets from one platform on another, but that comes with some risks. DeFi platform Aave tries to protect itself against this interconnectedness.
Vote for Fantom
The DAO (Decentralized Autonomous Organization) off the platform agrees whether it should remove support for Fantom. Fantom is one such platform that is much connected to other networks, including Aave. It’s fast and cheap, but has now been found to have some security vulnerabilities.
There have been several hacks in recent months that took advantage of the Fantom integration. This has already led to millions of dollars worth of stolen tokens. In addition to Fantom, Aave also supports Avalanche and layer 2networks such as Optimism, Arbitrum and Polygon. It therefore runs quite a risk in projects that it has no control over itself.
Therefore, DAO participants can now vote on whether the Fantom integration should continue or not. Integration head Marc Zeller writes in the proposal that the community must carefully weigh the risks and benefits. Hacks have happened too often not to think about this very carefully, such as the hack of the Harmony Horizon bridge. $100 million was stolen. The Nomad hack even led to a loss of 200 million dollars.
DeFi stands firm
Hacking cryptocurrency platforms and hacks that somehow use blockchain have been a popular way for criminals to make money. The number of hacks has risen sharply in the past year, and hackers seem to be gaining momentum, especially in DeFi.
Decentralized Finance has shrunk hard due to the sharp declines in the markets. The huge number of hacks has had a significant influence on this. The entire DeFi market was nearly 75% smaller at the end of June compared to April. Yet many networks hold up, according to Kraken CEO Jonathon Miller. So there is little reason to give up hope.