Fireblocks, a crypto custodian, recently announced the launch of its dApp Protection and Transaction Simulation products to help protect institutions from scams in decentralized finance (DeFi). These products have undergone beta testing with Galaxy and FlowDesk and are now available to safety check decentralized applications across over 40 blockchains using Fireblocks’ APIs. The need for proactive security measures in DeFi has become more critical as the sector experiences unprecedented growth and an increase in funds lost to hacks and scams.
While data from Chainalysis indicates a decrease in the volume stolen from DeFi hacks from $3.1 billion in 2022 to $1.1 billion in 2023, CertiK reports a bounce back to $500 million in Q1 2024 alone. This increase in theft is due to various methods such as phishing websites, dApp takeovers, and supply chain attacks. The landscape of DeFi necessitates the use of automated tools to detect malicious or duplicitous smart contracts before interacting with them, as many users lack the resources to hire cybersecurity experts to navigate the technical nature of contract calls.
Fireblocks’ dApp Protection tool provides real-time threat detection alerts to users before they interact with potentially compromised dApps or phishing websites. Additionally, the Transaction Simulation feature offers users a preview of the estimated change to their token balance caused by a smart contract interaction before executing the transaction. This empowers teams to stay ahead of evolving onchain threat vectors and provides transparency to all parties involved in the transaction approval workflow.
The total value locked in DeFi protocols has risen significantly from $54 billion at the beginning of 2024 to $94 billion currently, reflecting increasing enthusiasm within the crypto markets. Experts at Chainalysis have suggested that hackers may leverage artificial intelligence and LLMs to find vulnerabilities in smart contracts, leading to more DeFi-based crimes. Fireblocks’ new DeFi protection tools aim to address these challenges and enhance the security of institutions operating in the DeFi space.
As DeFi continues to grow and attract more users, the importance of implementing robust security measures to protect against scams and hacks becomes paramount. Fireblocks’ dApp Protection and Transaction Simulation products offer institutions the tools necessary to detect and prevent potential threats in the evolving DeFi landscape. By providing real-time threat alerts and transaction previews, Fireblocks aims to improve security practices and safeguard users’ digital assets in the DeFi ecosystem. The rise in DeFi-related theft underscores the urgency of implementing advanced security solutions to protect the growing value locked in DeFi protocols and prevent losses due to malicious activities.
