The Ethereum community has proposed a revolutionary idea to enhance the security of decentralized finance (DeFi) protocols. This proposal aims to address the ongoing challenges and risks associated with DeFi by introducing innovative solutions.
Introducing ERC 7265, a newly created protocol that will transform the way DeFi platforms handle potential hacks and protect user funds. The proposed ERC 7265 standard includes a crucial element that serves as a fail-safe mechanism built into the smart contracts of DeFi protocols.
In the case of any security breach, the “circuit breaker” mechanism would act as a safeguard, allowing developers to quickly prevent the transfer of any token before it leaves the contract.
This standard is designed to address the vulnerabilities exposed by the recent Poly Network hack. The hack revealed a lack of a prompt response mechanism in DeFi protocols, which allowed the exploit to occur.
ERC 7265 aims to fortify DeFi protocols by introducing mechanisms that enable quicker responses to potential security breaches. By implementing this standard, developers can enhance the security of their protocols and reduce the risk of similar exploits.
Recently, the Polygon Network, a cross-bridge platform, experienced a security breach due to compromised private keys. Hackers obtained billions of tokens for personal gain. The breach was acknowledged by Polygon Network on July 2.
According to the report by Peckshield, this incident affected 57 different cryptocurrencies across 10 blockchains, including BNB Chain, Polygon, Avalanche, Heco, OKx, Metis, and Ethereum, along with the trust of investors. The stolen amount was not specified, but attackers had already transferred over $5 million worth of cryptocurrencies.
In addition to the development of security protocols, countries like the UK and South Korea have approved the “Financial Services and Market Bills 2023” and “Virtual Asset User Protection” bills to prioritize individual protection.
The UK bill aims to attract US crypto companies while upholding stringent regulatory standards. Meanwhile, the recent bill in South Korea places a strong emphasis on ensuring investor safety by bringing the realm of cryptocurrency under the jurisdiction of the Financial Services Commission. The bill aims to closely supervise crypto service providers and address concerns related to market manipulation.