• The Ethereum community is proposing a new standard, ERC 7265, that could enhance the security of DeFi protocols.
• This proposed solution aims to mitigate the risk of significant losses due to hacks in an increasingly vulnerable DeFi landscape.
• If accepted and implemented by core developers, this proposal could become a critical tool in the battle against DeFi hacks.
Security Breaches in Decentralized Finance (DeFi)
The decentralized finance (DeFi) landscape has been marred by an upswing in security breaches recently, with protocols including Poly Network, Chibi Finance, Sturdy Finance, Jimbos Protocol on Arbitrum, Hundred Finance, Sentiment, Deus Finance, and Tornado Cash among others all falling prey to malicious actors. As these attacks escalate in both frequency and impact, it has become evident that effective protective measures must be taken in order to protect users from significant losses due to hacks.
Proposed Solution – ERC 7265
In response to these alarming vulnerabilities in the DeFi sector, a group of Ethereum community members has put forth a new standard known as ERC 7265 aiming to enhance the security of DeFi protocols. This standard suggests the integration of a „circuit breaker“ into DeFi protocols which would act as a fail-safe stopping token transactions before they exit contracts during a hack. According to Meir Bank of Fluid Protocol: “ERC 7265 allows teams to create a circuit breaker protecting their protocol with highly customized rate limit parameters per asset…the attacker will no longer be able to drain an entire contract in seconds” which would allow for most funds involved in such an attack to be recovered.
Integration Into Governed DeFi Protocols
This proposed standard is primarily intended for integration into governed DeFi protocols which is common practice within the sector and carries few downsides with numerous benefits according Bank . If accepted and implemented by core developers this proposal could become a critical tool moving forward when dealing with hacks within the sector.
Approval Process
ERC 7265 is currently awaiting approval by the wider Ethereum community but if accepted it could become invaluable when mitigating against potential losses due hackers within this space.
Conclusion
The recent spate of high-profile security breaches plaguing the decentralized finance (DeFI) space has highlighted just how vulnerable these systems are against malicious actors intent on causing significant financial losses for users involved within them. In response ,a new standard known as ERC 7265 has been proposed by members of Ethereum’s community that aims at enhancing the security protocols used by such systems and mitigating any potential damages caused by future attacks . It remains to be seen if this solution will gain approval from developers but should it do so it could prove pivotal when defending against malicious actors intent on exploiting such networks