Crypto Cybersecurity Threats for 2023: No Bridge is Safe
Crypto bridges are vulnerable to exploits, and the lure of quick riches can lead to flash loan attacks and exit scams. Fortunately, the Internet Computer's architecture protects InfinitySwap from common DeFi exploits. Here's how!
Crypto bridges are vulnerable to exploits, and the lure of quick riches can lead to flash loan attacks and exit scams. According to CertiK, a leading blockchain security company, 2023 will be another bad year for cyberattacks. "We saw a large number of incidents last year despite the crypto bear market," CertiK reports, "so we do not anticipate a respite in exploits, flash loans, or exit scams."
Six of the ten largest cryptocurrency thefts in 2022 involved DeFi bridge hacks. Altogether, losses due to these cyberattacks totaled $1.4 billion USD, as reported by CoinTelegraph. Fortunately, InfiniSwappers are much safer because the Internet Computer's unique blockchain architecture protects InfinitySwap from most DeFi exploits.
The Three Main Threats: Bridge Exploits, Flash Loan Attacks, and Exit Scams
The three main cybersecurity threats to DeFi in 2023 are bridge exploits, flash loan attacks, and exit scams. To understand how InfinitySwap leverages the Internet Computer's novel blockchain architecture to defend against these threats, it's necessary to understand how each one works.
Bridge exploits are a form of attack that is used by hackers to steal cryptocurrency by creating fake transactions. They work by exploiting vulnerabilities in the way blockchain bridges detect and validate transactions.
For example, by taking advantage of mistakes in a bridge's code or signature validation protocols, hackers can trick a bridge into thinking a deposit has been made on one blockchain and receive a payout on a different blockchain. Hackers can also exploit a cross-chain bridge by taking over validator nodes in a variant of a Sybil attack, and then force those nodes to approve falsified transactions.
With InfinitySwap, however, there is no need to fear any bridge exploits — in fact, there is no bridge to hack! The Internet Computer uses innovative Chain Key Cryptography to facilitate direct, bridge-less, trust-less integration with the Bitcoin blockchain. Because InfinitySwap is built on, and fully hosted on, the Internet Computer Protocol (ICP), transactions occur at Web speed and are natively mirrored on all blockchains that have been integrated with the Internet Computer.
Flash Loan Attacks
In DeFi, flash loans allow users to borrow large amounts of digital assets for a brief period, usually a few seconds, before paying back the loan in full. Legitimate uses of flash loans include facilitating trades of different cryptocurrencies across blockchains or optimizing profit from arbitrage discrepancies across exchanges.
However, as Beanstalk discovered back in April 2022, clever hackers can use flash loans to devastating effect. On Beanstalk, voting power was based on the number of tokens held. Therefore, a cyber attacker was able to execute a flash loan, vote to drain Beanstalk of $182 million USD in digital assets, then repay the flash loan and abscond with mountains of cash.
InfinitySwap, thankfully, isn't governed by anyone. Its automated-market-maker and liquidity pool systems are entirely automated and executed by smart contract canisters on the Internet Computer. Flash loans will get hackers nowhere on InfinitySwap, because assets are traded peer-to-peer on the Internet Computer blockchain itself and are directly mirrored on integrated blockchains. In fact, Internet Computer smart contract canisters own and operate addresses on these other, integrated blockchains.
Exit scams are simple and dirty. These scams are when someone promises you a lot of money for your crypto up front but instead disappears with your crypto without giving you anything in return, leaving you empty-handed. Usually, exit scams steal customers' money during an initial coin offering (ICO), at which people are tricked into believing they're buying a coin at a discount for huge investment gains later on.
Of course, no one can offer complete protection from exit scams since they rely on abusing human trust. Investors should always conduct research and perform due diligence before sinking cash into new projects. That being said, InfinitySwap's innovative liquidity bootstrapping pools help protect new start-ups from wild price volatility early in the project's lifecycle. This simultaneously encourages legitimate project development via built-in stability and discourages bad actors by substantially reducing the potential payout of an exit scam.
How InfinitySwap Protects Private Keys
Even though cyberattacks and scams can never entirely be prevented, CertiK does predict there will be fewer brute-force attacks on crypto exchanges in 2023.
"It’s possible that funds lost to private key compromises in 2023 will be due to poor management of private keys, bar any future vulnerability found in wallet generators." - CertiK
InfiniSwappers can rest easy that their private keys are safe on DeFi on the Internet Computer. Thanks again to the Internet Computer's novel Chain Key cryptography and direct integration with other blockchains, no intermediary services or third parties have access to users' private keys at any time.
Conclusion: DeFi on the Internet Computer is the Solution to Crypto Cybersecurity Threats
DeFi on the Internet Computer is the solution to the crypto cybersecurity threats, and InfinitySwap is the premiere exchange on the world's first blockchain computer that runs at Web speed. The Internet Computer provides a platform for developers to create their own DeFi applications and services without having to worry about traditional crypto cybersecurity issues or scalability problems.
In addition to disincentivizing exit scams with liquidity bootstrapping pools, InfinitySwap leverages the Internet Computer's revolutionary direct blockchain integration with other networks, including Bitcoin, to prevent common cybersecurity threats by eliminating the intermediary services they exploit in the first place.
Therefore, InfinitySwap is the answer to the need for a secure, flexible, next-generation decentralized exchange.
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*Disclaimer: While every effort is made on this website to provide accurate information, any opinions expressed or information disseminated do not necessarily reflect the views of InfinitySwap itself.