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The development of the DeFi industry was supposed to remove the risks of working with centralized exchanges (CEX). Traders trusted cryptocurrency deposits without any guarantees of return and control, theoretically and practically, company owners could use these funds at their discretion to their advantage.
DEX-exchanges and AMM-aggregators carried out exchanges in smart contracts, leaving users with control over the deposit, but the emergence of a system of bridges between blockchains has made this industry more dangerous than CEX-exchanges.
SlowMist analysts estimate that in 2022, centralized exchanges lost about $70 million. Hacking cross-network smart contracts brought hackers $1.043 billion.
The reason for successful attacks was the inattentive attitude of developers to the code and validation of the exchange of tokens between blockchains. For example, in the Ronin protocol, there were only five nodes that did not notice the leakage of funds for 5 days.
Aave was the first DeF platform to indirectly acknowledge the systemic nature of the bridge vulnerability problem. The startup put up for a vote the closure of smart contracts in networks with low financial activity. Probably, at this stage, developers should rethink the price of technological development, which can lead to reputational losses for the entire DeFi industry.
#DeFi #Industry #Fails #Live #Traders #Expectations
