Cryptocurrencies provide one of the easiest ways to make quick and safe transactions. Blockchain is also counted among one of the most secure technologies. But bad actors are always up to devising ways to exploit vulnerabilities. Security threats are capable of causing irreparable damage to crypto protocol managers, business owners and users.
The global digital currency adoption is going to increase over the years. Thus it has become important to work on crypto vulnerability management. This article explains the significance of crypto vulnerability management and shows how vulnerability management is a solution to prevent cyberattacks.
Crypto attacks can prove to be very expensive. Crypto vulnerability management helps in avoiding this cost. It means devising plans and strategies to defend against cyber attacks. Securing the smart contract has become important, as the number of attacks by cybercriminals are rising.
Digital thieves managed to steal cryptocurrencies worth $3.2 billion in 2021. Hackers have already stolen crypto assets worth $1.3 billion in the first three months of 2022. Decentralized Finance (DeFi) protocols have been more vulnerable this year with over 97% of all the cryptos stolen in the first three months of 2022, belonging to DeFi protocols, according to Chainalysis research data.
Security breaches are the primary reasons for cryptocurrency frauds. Leak of privacy keys is a kind of security breach. The most recent example of such an attack is the Ronin Network breach where thieves stole cryptocurrencies worth $615 million.
Now code exploits are becoming a common reason for attacks, especially in the DeFi domain. In Q1 2022, code attacks accounted for 50% of the total stolen value.
Several factors create scope for code attacks with open-source development in DeFi as one of the glaring reasons. Open-source development is the lifeline for decentralization and transparency in the DeFi ecosystem. But it also benefits cybercriminals. It allows them to analyze the vulnerabilities of scripts and plan their attacks. For example: The DeFi hack worth $150 million on BadgerDao in 2021. The hacker had tested his exploit and laundering process months before the attack.
Following are some of the best practices for secure coding. You as a blockchain developer can follow these tips. These will ensure your platforms do not have any weak spots:
These provide a solid base framework for secure coding. These standards cover all the required and critical aspects of coding. Some of the best coding practices are: Threat modeling, access control, private key management, writing unit test suites, cryptographic practices, error handling and modeling.
General best coding practices may not be of much help to you as a protocol owner. You need to get familiar with the security documentation of the blockchain. For example: If your business is using the Solana-backed blockchain, your developer should familiarize himself with Solana’s security documentation.
You should understand the risks about implementation of tokens. Be aware of the dangers associated with running code on blockchains’ virtual machines which operate differently than cloud servers or desktops.
The Smart Contract Weakness Classification and Test Cases (SWC) Registry lists 36 risks. It will equip you with the knowledge of known attacks and common protocol patterns. You as a crypto developer should get familiar with these key risks.
Developers coming from web-dev may be experienced in E2E tests, however in crypto you need to design full-blown unit test suites as well as create E2E tests. Don’t underestimate the power of unit testing which in many cases has discovered critical bugs.
Crypto companies and platforms with vulnerabilities are often hit by attacks from hackers. Following are some of the most popular attacks that made news last year:
In a code exploit last year, an attacker stole crypto worth $613 million from the Poly Network. The attacker exploited cross-chain relay contracts. He managed to extract funds of the network from Ethereum, BSC and Polygon chains. This was the biggest DeFi theft of 2021.
Venus Protocol faced a $145 million code exploit last year. The attackers manipulated the market price of the protocol’s governance token XVS. They used this trick to borrow Bitcoin and Ethereum worth more than the actual value of the token.
Due to cyberattacks, XVS price declined. The collateral of the users who defaulted on their loans was also liquidated. The attacks finally left Venus with a debt of $145 million.
Attackers injected bugs in the BadgerDao application through a compromised Cloudflare API key. The script intercepted transactions. It also prompted users to allow a foreign address to operate on the ERC-20 tokens in their wallets. The attackers siphoned funds from the wallet when they received approvals from users.
Attackers stole a private key that compromised two hot wallets of BitMart. They managed to steal cryptos worth $200 million.
Cyber criminals execute their attacks at much ease. Thus, it is important to use one or more security tools to detect crypto vulnerabilities.
Generally, the focus is on attacks by cybercriminals on large organizations. But criminals are using malware to steal even small amounts from individual users. Crypto investors should have access to dedicated tools for testing different attack vectors.
Tokenguard is one of the best tools for scanning crypto vulnerabilities. It allows investors, VCs and banks to check the project in which they are investing.
Platforms like Sygnum, LoanSnap, Auditchain and Day By Day Insurance trust Tokenguard. It provides code verification feature, as well as token analytics and a security monitor.
Token analytics provides important analysis and insights about token owners and stakeholders. It provides visualizations for token and smart contract behaviors.
Tokenguard’s security tracker helps in the assessment of crypto projects. It verifies the security of code in six hours. It also creates alerts on dangerous actions and potential hack attempts. This protection tool can help users save their investors from potential scams 24/7.
Using TokenGuard is as easy as making a coffee. It helps users to automatically verify the security of any ICO, which they want to take part in.
Crypto vulnerability management is the process to protect cryptocurrency platforms from potential attacks. It involves the use of safety tools and best practices to ensure no loopholes for attackers. The ultimate goal of crypto vulnerability management is to protect investors’ wealth. It helps in increasing their faith in the project that they invest in.
Crypto vulnerability management is important because of the rising number of crypto crimes. Reports of malware attacks, security breaches and code attacks have become common. Not only large platforms, but even small crypto investors have become vulnerable to such attacks.
Tokenguard is one of the best tools to detect crypto vulnerabilities. This blockchain audit tool can be easily used. Tokenguard provides on-demand security audit reports of crypto tokens or smart contracts.