Richard MA, co-founder and CEO of the blockchain security startup Quantstamp, believes that security issues may hinder the further growth of DeFi.
He noted that the sphere of decentralized Finance can indeed change the global financial system, but security issues are becoming more important. In 2020 alone, DeFi projects were attacked several times and hackers were able to steal tokens and cryptocurrencies worth $26 million.
However, even attacks on DeFi protocols and services did not prevent the significant growth of the industry — if in December last year, the industry’s capitalization was estimated at $700 million, now it has exceeded
“This growth shows the demand for an alternative financial system. You can see how, against the background of COVID-19, banks are printing more money, and interest rates in the traditional financial system are falling. So people are looking for better options, ” Richard MA said.
DeFi projects offer users better interest rates, lower overhead costs, and better transaction execution speed. But many services are still too vulnerable, and a lack of security can lead to the loss of customers ‘ money. One of the most popular methods of attack is secured loans, where hackers artificially inflate the price of an asset and then use it as collateral to obtain another asset.
The CEO of Quantstamp stressed that ” it is vital to develop reliable security systems in advance.” We need to pay more attention to security audits, implement real-time vulnerability tracking systems, improve transparency, and implement insurance schemes. These measures will help to unlock the potential of DeFi.
On the decentralized exchange Uniswap recently observed
a boom in fraudulent tokens-assets masquerading as tokens of well-known projects.