What is the proposal for DeFi hacking countermeasures and the new token standard “ERC 7265”?

Hacking countermeasures for DeFi

As security measures are required in the crypto asset (virtual currency) market, developers of the DeFi (decentralized finance) ecosystem have released a proposal for a new token standard “ERC 7265: Circuit Breaker”.

1/ Announcing ERC 7265: Circuit Breaker

We are fixing the biggest problem with DeFi Security – lack of response time to mitigate hacks.

Built by @Diyahir @tcb_00 @real_philogyhttps://t.co/4KQDYEK2H7

— Meir Bank (@MeirBank) July 3, 2023

According to the new proposal, this circuit breaker uses a smart contract to suspend transactions (emergency stop) when the token withdrawal amount exceeds a preset value. DeFi protocols often form a liquidity pool of tokens (assets) deposited by users, forming a trading or rental market.

Fluid protocol developer Meir Bank explained the details of the proposal via a tweet. With ERC 7265, withdrawal limits can be set for each asset, so even if a particular liquidity pool is hacked, an attacker cannot take all the assets locked up in the contract.

ERC 7265 was designed with the DeFi protocol in mind, which can be upgraded through governance.

However, ERC 7265 is currently in the proposal stage, pending approval by the Ethereum community and implementation on the network. After consultation with the wider Ethereum community, the implementation will be done by the core developers and eventually made available.

connection:Japan, the amount of virtual currency hacked by North Korea is the world’s highest amount equivalent to 98 billion yen = Nikkei

Scale of DeFi hacking damage

According to data from digital asset management app De.Fi, hacking losses in the DeFi market in the second quarter of 2023 (April-June) will amount to more than $204 million. This is about seven times higher than in the same period last year, and the number of hacking incidents also increased significantly from 17 to 117. Furthermore, in the first half of 2023 (January-June), hackers stole $665 million from DeFi platforms.

CertiK, a blockchain security company, has tallied about $320 million in losses due to DeFi hacks and fraud in the first quarter of 2023 (January-March) alone.

connection:The market size of DeFi “LSDfi” for liquid staking has doubled from the previous month

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