To achieve Web3 mass adoption, it is vital that the community remain clear-eyed about the challenges and opportunities of where things stand right now.
The data on hacks, frauds, and exploits have been compiled, and 2022 is already the most expensive year on record for Web3. Undoubtedly, this will be distressing for a Web3 group still battling to find its footing during a bear market. Moments of this nature necessitate a realistic and objective evaluation of how these losses transpired and what the next steps are for anyone striving toward widespread adoption. The increase in losses is discouraging, but history reveals what must occur for Web3 to attain widespread acceptance.
To accomplish so, it is essential that the community maintains a clear understanding of the existing problems and prospects — the vulnerabilities of the current ecosystem, what they imply for the current status of the community, and the steps required to achieve a secure and stable Web3 future.
Here are the four critical steps:
Also Read: What Caused the Cybersecurity Ecosystem to Congeal?
Understanding the involvement of Web2 in Web3 breaches
There has been a substantial increase in phishing assaults. This growth is disheartening for a number of reasons, not the least of which is that phishing attempts should be easy to prevent; even naive investors should recognize that offers of free gifts from anonymous strangers are likely fake. As phishing assaults have become more sophisticated, however, even seasoned investors have fallen victim to them, as attackers now operate under the illusion of legitimacy after gaining access to official social media accounts for projects. As a result, phishing assaults have become more profitable and have a higher success rate, as otherwise savvy investors are misled into clicking on links that appear real.
The increase in these assaults illustrates one of the most problematic aspects of Web3 security: the increasing dependence of Web3 initiatives on Web2 infrastructure. Thus, hackers are able to use Web2 flaws to attack otherwise safe Web3 projects.
Learning from the Flashloan attacks
Alongside phishing attempts, the infamous Flashloan attack, which is proving to be one of the most destructive exploits in a hacker’s arsenal, continued to climb in the second quarter of 2022. Recent experiences demonstrate that Flashloan assaults hardly follow predictable or typical patterns. Rather, the data demonstrates how hackers continually find new ways to exploit Flashloans to exploit a weakness in the programming or design of a project. This implies that Flashloan attacks are frequently tailored to vulnerabilities unique to each project, making them one of the most difficult attack channels to detect.
Implementing end-to-end security for a secure Web3
As part of their security posture, Web3 initiatives must implement end-to-end security. This necessitates regular and comprehensive audits of smart contracts, as attacks frequently target new features that lie beyond the scope of the prior audit. Moreover, Blockchain analytics solutions, such as wallet and transaction tracking and on-chain analytics, assist Web3 projects in monitoring on-chain activities. By offering liquidity monitoring and Flashloan detection, these types of solutions provide projects with crucial time to anticipate and respond to a potential assault.
While the currently available tools are essential for sustaining a safe and secure Web3 ecosystem, there is an urgent need to expand their variety and performance. In the end, the methods of detecting vulnerabilities must be significantly more precise and granular than those of hackers, and the ways of conceptualizing new and unanticipated attack vectors must be even more inventive.
Also Read: Protecting Enterprises from Black Hat Hackers
Identifying room for improvement and innovating accordingly
As with any new technology or innovation, especially one that has expanded at such a quick rate, vulnerabilities in Web3’s code are unavoidable. It is, therefore, crucial that Web3 security evolves and be implemented in tandem with Web3 technology’s development.
This includes the development of improved detection and prevention systems. It also entails building cultures of transparency around projects using human-based methods like Know Your Customer (KYC) checks. This not only combats hacks and rug pulls by introducing accountability mechanisms for project teams, but it also encourages investment by boosting user confidence in projects.
This is partly attributable to Web3 projects adopting these technologies, as well as Web3 security vendors continuing to develop and refine their techniques. However, the Web3 investor and user community as a whole can help by becoming more security-aware and investing in projects that are doing their uttermost to safeguard themselves and their user base. Such a collaborative effort is essential for combating the escalating hacking losses and protecting the Web3 environment.
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