bZx, the seventh-largest decentralized finance (DeFi) platform has announced it plans to compensate victims of recent hacks that impacted the platform within the last month. Kyle Kistner, co-founder of the project revealed major vulnerabilities on the protocol leading to the attack and how the project is now mitigating the risks to move forward.
The exploitation of “flash lending” was done on its Fulcrum platform and also involving Compound, another popular DeFi platform. The company indicated it will make significant changes to its development process to prevent any such attacks in the future.
The DeFi platform was attacked twice last month, resulting in the theft of $1 million in Ether. The vulnerability also raised serious questions on the security of DeFi platforms, which were once seen as a major disruption to the traditional financial services. Kistner took full responsibility for the attack and assured that the protocol users will not bear any losses. Instead, “the company and the protocol stakeholders are absorbing the losses.” The platform will also increase its bug-bounty rewards, increasing the visibility of their bug bounty program.
These unfortunate events highlight the major vulnerabilities Blockchain and digital asset platforms and exchanges face with respect to data security and protections. While the industry has gone to great lengths to develop mechanisms for ensuring the safe storage or personal and financial data across networks, constant development of new solutions and improvements of existing security infrastructures should be carried out.