Chainlink co-founder explains why attacks on DeFi projects continue
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Answer Chainlink co-founder explains why attacks on DeFi projects continue
We at Bitcoin Arab have covered several news articles dealing with news of theft and attacks on DeFi projects.
Chainlink co-founder Sergey Nazarov has stated that hackers will continue to go after DeFi projects unless they change the way they obtain their pricing information.
Nazarov’s comments came through a podcast “Daily Decoding” Posted last Friday, after DeFi projects were hit with more than $100 million in theft by targeting them via Sprint attacks that attacked Compound (which lost $89 million), Harvest Finance (which lost $34 million) and Project Harvest Finance (which lost $34 million). Cheese Bank (lost more than $3.3 million).
Hackers are draining $10 million a month from DeFi projects
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The projects referred to above were subjected to theft and exploitation by targeting the manipulated oracle protocols to modify the prices of the cryptocurrencies held in the protocols.
The hackers were able to target many projects because they relied on Curve Finance’s data on the price of cryptocurrency held in their liquidity pools.
In the podcast, he told Nazarov:
All attacks are about using one central protocol as the source of the price and these types of attacks will continue to happen, even if the protocols start getting their data from two or three sources.
I think it is concerning and that the developers of these protocols should look into it.
Nazarov adds that these projects relied on Curve, which led to the embezzlement of liquidity pools in the Curve protocol.
Nazarov went on to say:
Chainlink is problem-resistant as it uses multiple data sources to get data from hundreds of trading platforms.
In order for DeFi protocols to avoid problems in the future, they will have to think seriously about the source of their data.
Since the attacks, Curve Finance has recommended that DeFi projects should use Chainlink, which uses a decentralized oracle network and gets data from multiple blockchains, so it cannot be tampered with.
Read:Ethereum Developer Reveals Timeline for Final “Merge” Upgrade
It seems that new DeFi projects will have to escalate their mechanisms when it comes to security or else they will lose millions of dollars again.
Read also:
Hackers drain $24 million worth of DeFi protocol
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