3 Infamous Hacks in DeFi History and How They Relate to Smart contracts Audit
DeFi is a dynamic component of the cryptocurrency industry, with approximately $ 80 billion in assets embedded in the protocol since March 2021. Projects at DeFi are counterfeiting and fraud and loose bolts of such activity are poorly constructed smart contracts. This becomes apparent when you look at the scams in the last few months.
Poly network attack
In May 2021, the Pancake Bunny protocol was attacked when a hacker acquired a large number of crypto assets worth $ 45 million. They used a flash loan for this purpose. To make matters worse, hackers exchanged BUNNY tokens for Binance Coins, reducing the price of BUNNY tokens from $ 146 to $ 6. To make matters worse, another attack followed immediately. Despite the attack, the developers of Bunny Finance were unable to prevent the attack on PolyBunny, the fork of the company's Polygon blockchain. The attacker created a $ 2.1 million worth of POLY BUNNY.
The price of POLYBUNNY tokens has dropped from $ 10 to $ 2. Flash loans include smart contracts that anyone can borrow and pay in a single transaction. They exploited Pancake Bunny's BNB-USDT liquidity pool vulnerability to manipulate BNB prices and successfully attack nearly 7 million BUNNY in a six-step process.
Burger swap attack
On May 28, 2021, Burger Swap launched a lightning strike on the BSC blockchain. Hackers stole $ 7.2 million in 14 transactions. Again, the culprit was a lightning strike. What the attackers did was create their own counterfeit currency (non-standard BEP-20 tokens) and use $ BURGER to create a new trading pair. Using the $ WBNB route, hackers re-entered BurgerSwap into the couple's contract via counterfeit coins and reserves, changing prices and making money.
The Role Of the Audit
DeFi projects are self-governing using smart contracts, which is a major concern for stakeholders in the event of a failure. Smart contracts Audit a set of software code designed to automate execution and completion. It is this layer that provides automation for the blockchain protocol. Smart contracts have defined start and end events based on events that occur remotely. Multi-party signatures control access to contracts. Access to external and internal data sources leads to the execution of the term. Smart contracts can access a distributed database where assets are stored. It also contains information about property ownership and stakeholders.
The reason why smart contracts are really smart is very important
Smart Contracts Audit are the spirit of the DeFi protocol. The protocols work as programmed in the smart contracts that drive them. If an error occurs, the protocol can be significantly lost. To make matters worse, it can lead to an irreversible outage. The responsibility for the perfect smart contract lies with the developer. Failure to design a contract results in severe, medium, or moderate errors. Developers need to have secure contracts and work as expected. There should be no backdoor for hackers. When a contract is filled with cryptocurrencies, malicious elements can try to run out of the contract.
The Function of Audits
Smart contract audits are essential for detecting code bugs, loopholes, and security vulnerabilities and suggesting improvements. Blockchain is a virtually secure ecosystem, but vulnerabilities arise when smart contracts are poorly described. Developers cannot completely trust a perfect contract for two reasons.
In the first place, it is humanly impossible for a single developer or team to ensure that all parameters related to a vulnerability are met. Second, developers can deliberately leave the backdoor to run out of contracts when they choose. A thorough audit is required to deny these two obstacles.
Smart contract security audits include a thorough analysis of the code that manages your application to fix design issues, code errors, or security vulnerabilities. You need to focus on a trusted security audit business. This process typically involves steps such as agreeing to a set of specifications, running tests, running autorun tools, manual code analysis, and reporting.
Conclusion
Hack like Poly Network, PancakeBunny, BurgerSwap highlights how important smart contract auditing is to the success of blockchain projects. Auditing helps identify bugs, issues, and security issues, and helps prevent loopholes before damage occurs.
