01 August 2022
2 min read
Decentralized finance has been successful in gaining the confidence of investors. However, there are several questions about the trustworthiness and reliability of this technology. It is a result of DeFi security vulnerabilities related to the increasing frequency of fraud attacks.
Check out this piece, we have tried to outline some key pointers to secure your Defi projects from DeFi hacks!
How to Protect your DeFi Projects from Hacks?
Even with all the work put into creating and maintaining a rock-solid platform, the DeFi sphere still faces security vulnerabilities. Anyone who wants to succeed in this fast-paced environment, whether they are a novice user, a seasoned veteran, or somewhere in between, must have a solid understanding of how to navigate it.
Below are some ways to save yourself from increasing hacks and exploitations in the DeFi world:
1. A Private Key is Private For a Reason
A private key is the only way to demonstrate that the money in your wallet belongs to you. It should NEVER be discussed with or made public. Even if a person is an administrator of a group or a member of your project team, never give them access to your private key. The only thing someone needs to steal your tokens is your private key.
2. Your Wallet Needs a Strong Password
For wallet applications, you should always use a secure password or passcode. Explore the multiple password management tools online. Such tools are excellent for keeping the wallet safe. Using the same password everywhere can result in catastrophic money loss and personal data.
3. Research Should Not Be Compromised
No matter what project you’re working on or what project you’re planning to invest in. As an investor in the DeFi space, it is essential to do your due diligence and understand the authenticity of the contract/token you plan to interact with. As it's rightly said, better be safe than sorry.
4. Do Not Interact with Every Project
DeFi is a space where being nit-picky pays off. It is advised to engage only with credible and established projects. Audits, tools for multi-factor authentication, the time the company has been in business without hacks, and the community following the project are a few things to check for before diving into anything new. A brief search in the browser can widely contribute.
5. Multi-Factor Authentication Helps
Having two or more layers of access to your money is particularly important for wallet applications since, in theory, it will be twice as difficult for bad actors to move money out if there are two or more tiers of access.
Undeniably, one of the most potent cryptocurrency markets today is the DeFi market. A significant rise in the capital can be achieved by investing here. But, since every risk is associated with something in return, every gain encounters obstacles along the path.