The initial hack sent reverberations around the crypto market as many began to wonder about just how safe their funds truly are.
Return of Funds Prompts Important Questions
After the historic $600M+ Decentralized Finance (DeFi) hack, more than half of the funds have been returned––but there are still more questions than answers.
CoinDesk’s Muyao Shen wrote on Aug. 11 of how the $342 million worth of drained funds from the cross-chain DeFi platform Poly Network was returned. But as the rest of the stolen funds hang in the air, safety has become the number one topic of conversation.
“A big DeFi hack. Brings up a few controversial topics,” Stated Binance CEO Changpeng Zhao on his official Twitter account. “1. is CEX or DeFi safer? Well, they are just different. They have different risk characteristics. Learn about how to use them safely before using them. (read my previous tweet).”
In a lengthy thread that underlined efforts to freeze funds when able and compared the risks of fiat in comparison to crypto, CZ explained that “While we can’t freeze funds on blockchains, if those funds land on our CEX [centralized exchange], we will (try to) freeze them. So, we have a lot of blockchain analysis to do. Nothing is easy. We try.”
Complications of Freezing Funds
In truth, the difficulty in freezing funds as an exchange arises out of the practicalities of decentralization.
Binance retains a great degree of control over Binance Smart Chain. But the security algorithm that BSC relies upon––better known as Proof of Staked Authority (PoSA)––is controlled by 21 node operators who $BNB holders choose. There are questions of how much influence these operators have, especially when it comes to cross-chain platforms.
Predictably, Binance is one of the biggest holders of $BNB and therefore has a significant say in the process- but not a decisive one. CZ confirmed they will not seek out the remaining funds but will watch out for them.
What we mean is that, although being a larger token holder affects your sway, the practical aspects of having an entire community vote on pivotal decisions such as ‘freezing funds’, can prove arduous and too slow to combat dynamic exploits.
CZ went on to say that “Unpopular opinion: nothing is risk-free. Education/learning is the best protection. Read, learn about risks. Then manage it.”
As the days since the disastrous exploit pass, the questions on security remain. They are not just being considered by exchanges but also, tellingly, by the retail investor who will worry about their buck.
Source : bsc.news
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