Crypto Updates

ETH DeFi ‘circuit breaker’ could cut hack losses by 70% — Developer

ETH DeFi 'circuit breaker' could cut hack losses by 70% — Developer


A decentralized finance “circuit breaker” could have prevented billions of dollars worth of crypto being stolen from DeFi protocols in 2022, according to the developer of the newly published ERC-7265 proposal.

A new Ethereum request for comment (ERC) was published on Github on July 3. In it, the lead developer Diyahir Campos proposed a standard for a DeFi “circuit breaker.” It essentially aims to set a standard for a smart contract with the ability to halt suspiciously large token outflows from a DeFi protocol.

Last year was the single biggest year for crypto hacks, with at least $3.1 billion stolen from DeFi protocols, 65% of that coming out of cross-chain bridges. 

Speaking to Cointelegraph, Campos said circuit breakers could have prevented billions in losses.

“The ones that weren’t rugs, you could probably save 70% of the money […] with minimal impact to users.”

Campos revealed he was one of the many that lost funds in the $195 million Euler Finance attack in March, which led to contagion that impacted 11 other protocols.

“Actually, I was one of the depositors in the Euler hack,” he said.

“From that experience, I’m looking at the TVL charts and the transactions that happened and really it begged the question:”

“Why would you ever let 100% of your TVL leave in 10 seconds or five blocks?”

A typical DeFi protocol would see around 20% of total value locked entering or leaving a project in a day.

“Once you start talking 30% or 40%, that’s when you really start separating exploits versus daily usage,” said Campos.

The proposed standard has not been without controversy. DeFi researcher Chris Blec was among the skeptics on Twitter concerned the circuit breaker could be used for potentially nefarious purposes.

Click Here to Read the Full Original Article at Cointelegraph.com News…