Bankman-Fried Floats Crypto Hack Fix
Sam Bankman-Fried, the cryptocurrency billionaire, has proposed a framework for reducing the damage caused by the hacks and vulnerabilities affecting the sector. It includes setting the highest reward for attackers at $5 million.
Recently, crypto attacks have increased, with more than $3 billion looted from the crypto sector so far in 2022. This year is anticipated to set a hacking record.
The involvement of the FTX crypto exchange founder and CEO comes days after a hacker was allowed to keep $50 million of the approximately $100 million taken from the Mango decentralised finance programme. This was as part of a settlement with the platform following the heist.
In crypto, some white-hat hackers aim to reveal flaws in exchange for a reward rather than for nefarious purposes. A white-hat hacker is a person who uses hacking techniques to find security flaws in the blockchain ledger in exchange for rewards. However, sometimes these rewards could be too costly to be justifiable.
As seen in the above case, the hacker was given 50% of the total value, accounting for $50 million of the $100 million funds. Such numbers must be addressed. They cause outrage and are unsustainable for the company and the community. For that reason, people like Bankman-Fried are seeking solutions to crypto hacking.
Bankman-Fried claims that implementing his 5-5 strategy can reduce hacker effect by more than 98%, but he is still unsure about what should be the industry norm.
Is DeFi an easy target?
DeFi protocols provide software-based algorithms that let cryptocurrency traders, borrowers, and lenders transact, borrow, and lend on digital ledgers without needing a central mediator. According to blockchain expert Chainalysis Inc. data, DeFi has been the primary target of most flaws and breaches this year. DeFi is hailed as crucial for the widespread adoption of digital tokens, which also suffered from this year's plunge in coin prices.
The recent attacks are placing pressure on crypto players to find answers.
Author: Priya Kumari
Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.
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