In just the past few months, the DeFi sector has lost over $2.5 billion due to hacking attacks. However, with the emergence of ERC-7265, DeFi attacks may be brought under control and hackers can be thwarted to the maximum. Cryptocurrency kOL KODOTH has recommended this standard and analyzed its workings, advantages, and challenges. Note that this standard is currently only a proposal.
ERC 7265 proposes a new security layer for DeFi protocols. This proposal introduces a primitive called the “breaker” which can prevent token transfers from suspicious hacker attacks, effectively preventing losses. ERC 7265 is under development and once fully developed, most protocols may be deployed to this standard. When / if a hacker or vulnerability occurs, there will naturally be an average 40% downward trend, and the hacker will withdraw funds from the protocol. To prevent this, certain restrictions will be imposed on any smart contract published on ERC 7265.
How it works: When a developer releases any token, they can specify in the smart contract that if the token’s price range, TVL, and volatility exceed a specific percentage, the volatility should be locked. Locking means there is a problem. Prevent tokens from flowing out during this period. Another issue is that if the protocol is not fully decentralized, the ERC 7265 standard will be restricted to prevent DAO from holding most of the decision-making power, meaning that the owner’s power is decentralized. Developers will be able to specify whether the breaker contract should delay settlement and “temporarily hold outflow” during the cooling period or whether it should be restored when attempting to outflow. The purpose of this is to provide developers with flexibility and ensure the correct internal accounting of the protocol.
- EuYi OKX will launch a copy-trading competition in Turkey to find outstanding traders.
- In-depth explanation of the five types of ZK-EVM: architecture, advantages and disadvantages, and solutions.
- Opportunities and Reflections on the Future of Ethereum Block Space
Benefits: 1) It can help prevent losses caused by hackers; 2) It can make DeFi protocols more secure; 3) It can increase user confidence in DeFi protocols. Challenges: 1) It can be used to review transactions; 2) It can make DeFi protocols less decentralized; 3) May be difficult to implement; 4) Breakers only apply to projects that are already upgradable.
Reference: https://twitter.com/KODOTHH/status/1678489855083311115
Like what you're reading? Subscribe to our top stories.
We will continue to update Gambling Chain; if you have any questions or suggestions, please contact us!
