DeFi Exploits Plunder BSC as Binance Looks to CipherTrace for Solution
A lot of Smart Contracts deployed on the Binance Smart Chain have recently been hit by a lot of attacks. The year 2021 has seen a lot of DeFi projects exploited by hackers. More than ever before, hackers seem to be having the upperhand and are almost always successful in their ventures.
Since September last year, the BSC network has attracted a lot of developers and builders. This is majorly because of the high rate of data transfer on the platform, as well as its low fees. Binance Smart Chain has thus gulped a huge chunk of the DeFi market in the past years, with many projects migrating from the ETH network to the BSC network.
Although the Ethereum network is still the largest DeFi platform at the moment, the BSC network has proved to be a tangible alternative to the ETH base. The large attention gained by the BSC network over the past year has also come with some downsides. Most attackers find it easier to exploit BSC based protocols than ETH protocols.
To prove this point, BurgerSwap was exploited last month. The hacker(s) made away with a sum of $7.2 million worth of crypto assets stolen from its liquidity pools. Belt Finance, another BSC-based project, suffered a flash loan attack in May as well. A sum of $6 million dollars was stolen from this attack. In the same month of May, PancakeBunny suffered an exploit that amounted to a huge sum of $200 million. It was also a flash loan attack.
Numerous other projects built on the BSC network have experienced similar attacks. Due to the cycle of attacks, DeFi platforms built on the BSC network have called for Binance to address issues related to such attacks and the possible way forward. While Binance have not specifically revealed their plans to curb this challenge, it is currently in talks with a blockchain intelligence firm to help investigate the issues on the chain.
External and Internal Threats
While it is proven that blockchain itself is secure, it is possible for projects built on the blockchain to be exploited. When projects deployed on the smart chain have technical vulnerabilities, hackers pounce on these loopholes and do away with huge sums of money or tokens. This is known as an external attack.
On the other hand, when the project’s founders or internal team members rug pull and exit with investors funds, it is called an internal attack. Both external and internal attacks need to be curbed on the BSC network. Binance however, have made it clear that it is practically impossible to audit every single BSC project or Dapp that is launched on the platform as this would be extremely tasking. While Binance collaborates with some third party organizations that audits projects launched on the Smart Chain, these audits are not mandatory.
A more realistic solution in the meantime is the partnership with CipherTrace. CipherTrace has a proven track record of tracing cryptocurrencies that have been exploited by hackers. At the moment, Binance will require its services to trace stolen tokens and spot illicit transfers to BSC platforms and exchanges.
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