In the wake of an increasing number of hacks and attacks on Binance Smart Chain, the community is calling for action
DeFi platform is growing strongly to help support more potential projects. However, besides that, this protocol is also facing flash loan attacks that occur continuously. These are the most common form of DeFi attacks because they are inexpensive and easy to execute. Attacks appeared in 2020 and seem to be growing more rampant in 2021, leading to hundreds of millions of dollars in losses. Amid the increasing number of hacks and attacks on the Binance Smart Chain (BSC) protocols, the community is calling for action.
Binance Smart Chain calls DeFi attacks well organized
Binance Smart Chain has been at the heart of DeFi crime lately with the protocol after the protocol fell victim to hackers exploiting weak system design and code flaws using flash loans.
The BSC community has suggested that these attacks are organized and interconnected. In a tweet on May 31, it called on projects running on-chain to be more vigilant and put in place necessary risk control measures.
There are >8 #flashloan hacks recently, we believe, an well organized hackers are targeting #BSC now. It is very challenging time for the BSC communty. We are calling for the actions for all the #dapps:
— Binance Smart Chain (@BinanceChain) May 30, 2021
It wouldn’t be surprising if these attacks were coordinated. Many of the protocols that run on top of the BSC are copies of others, which means design flaws and the code will be copied through them. Binance Smart Chain team recommends projects work with their audit firms to perform another health check. It also says that if they are forked projects, double and triple-check the changes against the original version.
It is also advisable to have a contingency plan for worst-case scenarios and set up a bounty program. Some DeFi protocols have created compensation plans for their users after an attack. Allocating a portion of their tokens for such purposes would be a good idea under the current circumstances.
The only way project developers can cope is to maximize the solutions they are using today, as well as needing more security. And in the unfortunate event of an attack, the project also needs to build a solution as quickly as possible to protect users.
For users, before flash loan information, we should also be calm and have our own risk management measures, should not invest all of our capital in DeFi. Besides, don’t become too scared to completely ignore DeFi projects because they also offer huge opportunities.
In the span of 1 week, there were three flash loan attacks Pancake Bunny, BOG, Burger Swap on Binance Smart Chain’s decentralized finance platform. This shows that the confidence in projects on BSC is not really convincing to investors. Therefore, investors will tend to switch to other ecosystems such as Solana, Near, Avalanche, and the biggest competitor is Ethereum.
What do you think of the recent flash loan attack of DeFi projects on the Binance Smart Chain? Please comment below your opinion on this matter.
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