A Proposed Standard to Improve DeFi Security
A group of Ethereum community members, including @tcb_00, @Diyahir, and @real_philogy, have proposed a new standard, ERC 7265, to enhance the security of decentralized finance (DeFi) protocols. The standard aims to address the increasing number of DeFi hacks, which have resulted in nearly $3 billion in stolen funds. Currently, most protocols do not react quickly enough to stop attacks, leading to significant losses. ERC 7265 introduces a “circuit breaker” feature that allows protocols to add a back-stop in their smart contracts to prevent tokens from leaving in the event of a hack. This would enable a majority of funds to be recovered and mitigate the catastrophic consequences of hacks.
- DeFi protocols are vulnerable to hacks, leading to substantial losses.
- ERC 7265 proposes a circuit breaker feature to prevent token outflows during a hack.
- This standard allows teams to customize rate limit parameters per asset.
- Governed DeFi protocols can easily integrate ERC 7265 to enhance their security.
- Acceptance and implementation of ERC 7265 by the Ethereum team is yet to be determined.
Hot Take: The introduction of the ERC 7265 standard is a promising step towards improving the security of DeFi protocols. By providing a mechanism to halt token outflows during a hack, this standard can significantly mitigate the devastating impact of attacks. However, its effectiveness will depend on whether it is accepted and implemented by the Ethereum community and core developers.
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