As the DeFi space continues to grow, security has emerged as a major stumbling block on the road to mainstream adoption. The space may have made strides in recent years to improve security and protect users’ funds, but hacks and exploits remain a regular occurrence in the ecosystem.
In late April, Magpie Protocol suffered an attack that resulted in $129,000 value in USD from 221 wallets. I sat down with Ikram Ansari, Co-founder and CIO of Magpie, to get their perspective on the issue as well as Magpie’s experience and lessons learned from getting hacked.
Q: How are DeFi protocols currently alerted about hacks? Does the hacker reach out to gloat? Are there systems in place to alert the team? Does the team wait for users to see if there’s something sketchy going on?
There are real-time monitoring and protection tools that continuously listen to blockchain events and alert teams of any smart contract issues. For example, Cube3AI allows protocols to implement real-time monitoring of their smart contracts. It works by assigning a score – safe, warning, or unsafe – to transactions executed on a contract.
These tools only monitor, though. So, it’s up to the protocol to implement an automated pause or any action if an alert is triggered. Cube3AI also offers real-time protection and will block a transaction if triggered by an issue that doesn’t require manual intervention by the team members.
Overall, if a project isn’t utilizing such a tool, it is up to the team to detect any anomalous activity by monitoring their smart contracts. Users will also generally let teams know when something needs looking into.
