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Vitalik Buterin talks about the vulnerability of DeFi smart contracts

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Cryptoeconomics In 30 Minutes by Vitalik Buterin (Devcon5)

Vitalik Buterin talks about the vulnerability of DeFi smart contracts

Vitalik Buterin talks about the vulnerability of DeFi smart contracts
CONTENT

  • DeFi smart contracts remain vulnerable

  • DeFi’s high rewards will soon disappear

  • Hackers Hacked Multiple DeFi Protocols

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Vitalik Buterin, Co-Founder of the Ethereum blockchain platform, which occupies one of the leading roles in the decentralized finance market, Vitalik Buterin claims the vulnerability of DeFi smart contracts Decentralized finance (DeFi) is a financial services built on the basis of blockchain technology that offer users access to open, effective and … More and encourages users to be careful.

Vitalik Buterin talks about the vulnerability of DeFi smart contracts

DeFi risks are underestimated

Ethereum platform co-founder Vitalik Buterin warned of the dangers associated with the use of DeFi smart contracts. He spoke about this in an interview dedicated to the fifth anniversary of the launch of the Ethereum platform, on the air of Laura Shin’s podcast “Unchained”. When asked about the risks that smart contracts can carry, Buterin replied as follows:

“I think one of them is that a lot of people underestimate the risk of a smart contract.”.

Buterin said interest rates are significantly higher than traditional bank accounts, which means that DeFi products are much more risky and have a much higher chance of being hacked. Buterin said that he is not sure if even proven platforms and protocols can guarantee that they will not “break” within a certain period of time..

Also, Vitalik Buterin is wary of the high percentage rewards that are provided within almost any protocol. He notes that the platforms are not going to carry out additional coin emissions, so such high rewards will be canceled in the near future..

Vitalik Buterin talks about the vulnerability of DeFi smart contracts

“This is a short term thing. And once the temptations are gone, you can easily see that rates of return will fall very close to zero percent, ”he said..

In addition, Vitalik Buterin asks not to forget about the possibility of hacking the protocols of decentralized finance, which can lead to the loss of all user funds..

Loud DeFi Protocol Hacks

Despite the fact that the capitalization of the DeFi market is growing rapidly, reaching $ 4 billion in the past two weeks, yet the protocols of decentralized finance remain quite vulnerable..

More recently, BeInCrypto reported that rumors spread across social media that one of the DeFi apps had been hacked. This was announced by Stephen Zheng from The Block. According to him, information began to spread through Telegram channels. The administrator of one of the telegram channels drew attention to problems with Balancer, a DeFi protocol application that helps exchange tokens. Hackers managed to withdraw funds for $ 500 million.

Earlier this year, hackers robbed Lendf, one of two protocols supported by the dForce Foundation..

The dForce protocol is far from the first victim of hackers actively exploiting vulnerabilities in the decentralized finance segment. In mid-February, cybercriminals hacked into a smart contract associated with the bXZ protocol and stole all users’ money.

Vitalik Buterin talks about the vulnerability of DeFi smart contracts

Earlier, the editorial staff of BeInCrypto also reported that the decentralized finance industry was hit hard against the backdrop of the total collapse of cryptocurrencies. DeFi market lost over $ 330 million per day.

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