As Web3 gets bigger, it struggles to keep up with the malicious actors targeting users’ funds across different blockchains and networks. This security protocol takes a preventive approach against hacks and exploits, freezing assets before they get stolen.
Web3 benefits from being a digital-first ecosystem for innovation and growth. However, it also opens up the appetite of malicious actors, including hackers and exploiters, in the digital realm. The bigger crypto and Web3 get, the more they become vulnerable to hacks and exploits — victimizing users and causing the loss of billions.
From decentralized finance (DeFi) platforms to nonfungible token (NFT) marketplaces, no one can claim full invulnerability against attacks targeting investors, traders and funds stored across the Web3 industry. DeFi exploits also move the related crypto market in a negative direction, as seen when decentralized exchange (DEX) KyperSwap saw its total value locked tanking after a $46 million exploit.
A report by blockchain security firm CertiK unveiled that the DeFi landscape suffered a $1 billion loss in malicious attacks, including hacks, exploits and scams, in the first eight months of 2023 alone. Massive breaches like the one that occurred on Multichain’s Ethereum bridge, resulting in more than $100 million in losses, are now common in the space.
Despite the promise of better security measures, centralized platforms are not hack-proof, either. Crypto exchanges like HTX and Poloniex also got their share of trouble when they were hacked for $30 million and $100 million, respectively. All in all, the Web3 ecosystem needs better protection as it continues to grow rapidly.
Web3 gaming platform exploit averted
When it comes to the prevention of Web3 exploits, Lossless Protocol has an impressive track record, most recently recovering $800,000 worth of funds stolen from the users of the Web3 gaming platform Vulcan Forged. After relaunching its native PYR tokens with Lossless Protocol integration, the Vulcan Forged platform experienced an attack that exploited an outdated third-party wallet integration.
The Vulcan Forged team contacted Lossless immediately after the reports about wallets being drained from LAVA tokens, which were then traded for PYR. Since the Lossless Protocol protected the platform’s own PYR tokens, malicious transactions were frozen, and 119,000 PYR tokens were retrieved.
Besides the Vulcan Forged incident, Lossless Protocol played a vital role in retrieving user funds after some of the major Web3 exploits in recent years. It has recovered $1.2 million worth of AAG tokens after 2022’s $100 million attack on Harmony’s Horizon Bridge. The protocol has also helped with the recovery of $16.7 million from Cream Finance exploiters.
Lossless recently introduced an AI-powered smart contract monitoring system named Aegis. Without requiring any configuration, Aegis scans mined block transactions with predictive analytics. The Web3 security tool identifies transaction patterns and suspicious addresses to warn project teams of potential threats before they get exploited.
Web3 protection with predictive analytics
Web3 security protocol Lossless introduces a new approach to keeping users’ funds protected. Instead of trying to recover funds after the exploit already occurred, Lossless Protocol uses preventive mechanisms, such as active exploit mitigation, to keep the transactions safe.
Source: Lossless Protocol
With Aegis, a security monitoring tool by Lossless, project teams have an additional security layer that enables constant monitoring of activities. The protocol checks for suspicious activities across Web3 with both manual and automatic community-driven methods, freezing any flagged transactions on the spot until a more thorough investigation is completed. Once the community flags a suspicious transaction, it becomes frozen with the potential to be reverted based on the outcome of an independent investigation.
As the Web3 space grows and matures, it needs innovative solutions to keep users, platforms and funds protected. Lossless uses the latest technologies, including predictive analytics and AI, to prevent losses before they occur. DeFi is clearly struggling to keep users’ funds safe, and Lossless Protocol’s approach might be the key to making it a user-friendly and secure environment.
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