A group of programmers from the Ethereum community proposed a new standard ERC-7265: Circuit Breaker to improve the security of DeFi protocols.
The solution allows developers to insert an automatic “breaker” into smart contracts, which stops the movement of tokens when the asset outflow rate threshold is reached.
This will help save most of the funds in the event of a hack, noted Fluid Protocol founder Meir Bank. The rest of the coins withdrawn by the attackers will be easier to recover, he added.
Developers under the pseudonyms Diyahir, philogy and bd participated in the creation of the ERC-7265.
“We all agree that DeFi is not okay. There are not only many hacks, but the results are catastrophic – protocols often lose everything as a result of attacks. TVL merges to zero in seconds,” Bank said.
According to The Blockat the beginning of June, the total amount of funds stolen from DeFi protocols reached $2.85 billion. In the last 12 months alone, the figure has increased by almost $800 million.
Data: The Block.
According to Bank, attacks in the sector lead to significant losses due to the fact that protocol commands cannot respond to them with sufficient speed. In most DeFi projects, any changes are made through the management system, which also slows down the response. These shortcomings will be eliminated by an automatic output “breaker” with adjustable parameters.
“In the event of a hack, an attacker will no longer be able to empty a smart contract in a matter of seconds,” Bank emphasized.
According to the group, the mechanism provided for in ERC-7265 should work with a minimum number of errors. The analysis showed that the daily drawdown of liquidity in smart contracts simply does not reach 25-40%, if we are not talking about hacking.
ERC-7265 is a proposal for community discussion and comment. It can then be considered by the core Ethereum development team for potential inclusion in some future network upgrade.
Recall that in the first half of 2023, in general, the crypto industry lost about $655.6 million as a result of hacks and fraud.
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2023-07-04 13:42:29
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