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Oversight Agency Says Cryptocurrency Hacking Issues Are Linked to Centralization

CertiK specifically mentions the $1.3 billion loss that could have been avoided with extensive source code audits.

Central methods are a source of hacking

There is a new paradox in the cryptocurrency world: In 2021, the number of legal actions exploded, making the number of illegal acts (theft of funds, data loss) quite small compared to the overall volume (0.17%). total volume). However, 2021 year-end figures from various audit firms suggest 1.3 billion lost funds.

By centralization we mean all the methods that make up Web 2.0 when user data is grouped in a single database and controlled by a single owner. The centralization process benefits hackers who discover new flaws in systems every day. Auditing more than 1,800 DeFi customers, CertiK discovered 31,000 flaws, all of which could be exploited by hackers.

CertiK believes that DEXs and other decentralized organizations should not overlook security as demand explodes around the world. The real culprit, according to the audit firm, will be centralization, which ensures that everything about your transactions is known. An unethical blockchain system.

Towards total decentralization

CertiK states in its report that it’s an environment where “millions of dollars can be withdrawn from a compromised line of code.” We take as an example the Uranium Finance platform built on Binance Smart Chain, which lost $57 million in April 2021 due to a simple faulty character in its source code.

DeFi must strengthen security across all of its operations, with the risk of seeing investor interest dry up. CertiK offers viable solutions such as multi-signature wallets, but it is important for them to exit a centralized system in an inconvenient and vulnerable way.

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