30s Summary

Eric Waisanen from Astrovault argues for the necessity of two-factor authentication (2FA) and consistent security measures in decentralized exchanges (DEXs). Given the rising cases of DEX hacks, he insists that more robust security is essential in combating sophisticated cyberattacks. He advises developers to prioritize security to foster user trust. Design and technical bugs must be adequately addressed, as DEXs not safeguarding user assets risk becoming redundant. This piece serves as a call to strike a balance between technological innovation and user security as DEXs continue to evolve.

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Opinion by: Eric Waisanen, the main man behind Astrovault.

So, two-factor authentication (2FA), right? No one’s really a fan. But the thing is, it’s a big step towards keeping our data safe. Yeah, it’s a bit of a pain, but it helps keep the really important stuff safe and sound.

But it’s not enough to just have 2FA or other similar security measures. Security isn’t something to check off your to-do list; it’s an ongoing task of always staying one step ahead of the bad guys, especially in decentralized exchanges (DEXs). Here, the lack of central control and the high stakes mean we need to put security first, or it might be time to think twice about your role in the DEX scene.

The big selling point of a DEX is that it gives users the anonymity they crave. You maintain total control of your stuff, ditching the need for personal identification and verification. And while this might mean fewer rules and regulations than centralized exchanges, the lack of central authorities can be a double-edged sword for security.

DEXs aren’t immune to fancy cyberattacks. Just look at the first quarter of 2024—that saw over $336 million in digital assets nicked from these platforms. As DEX hacking gets more sophisticated, it’s more crucial than ever that we up our security game.

Let’s take an example: in August, “jaredfromsubway”, a notorious hacker bot, returned with a fancy new attack, the “sandwich” attack, to steal millions of dollars in Ether. If you’re scratching your head about what a sandwich has to do with security, it’s just a technique hackers use to slip between two transactions, make some sketchy trades, and scam other users.

So how do we fight back? Well, security audits used to be the go-to solution. But they’re not foolproof, as breaches have happened on platforms that were supposed to be secure.

The first DEX was launched eight years ago. It’s been a rocky ride, but if we want users to trust us with their assets, we’ve gotta up our defenses against these threats.

For all you DEX developers out there, it’s a hard pill to swallow when a security issue undoes all your hard work on an algorithm or feature. It can turn the excitement of a new product launch into a nightmare if user investments are compromised.

It’s not just technical bugs that cause trouble—sometimes, design flaws are the culprits. So if you’re a developer and you’re not fully committed to security, you might need to take another look at your approach.

In the end, if a DEX can’t protect its users, it won’t last. Even though these platforms aim to provide easy access and transparency, they’re responsible for the security of their users too. As DEXs continue to grow and attract more users, the tricky balance between pioneering technology and user security is going to be more important than ever.

Eric Waisanen is the brains behind Astrovault and he’s been in the Web3 scene since 2017. But remember, this article is just for informative purposes and shouldn’t be considered as official legal or investment advice. These opinions are all Eric’s and don’t necessarily represent the views and opinions of Cointelegraph.