The platform introduced methods to protect their protocol from attack after announcing their inability to separate from flash loans entirely.
Fear of the Flash Loan
Over the last couple of weeks, flash loan attacks have been occurring at a frequent pace. The flash loan attack against PancakeBunny resulted in a 97% correction in price following the attack. With more and more DEX’s under attack, many investors now fear their protocol could be next. PancakeSwap, one of the largest DEXs on the Binance Smart Chain, recently addressed the community about the ongoing uncertainty.
In their Tweet, PancakeSwap tells their community there is nothing they can really do about separating themselves from flash loans, as by default flash loans are a part of the Uniswap v2 protocol. Since PancakeSwap sent out this tweet, the price of CAKE (The PancakeSwap token) has fallen from $22.56 to $15.50 since the time of writing, a 31% decrease in price
PancakeSwap Assures Users of Their Safety
However, two days ago, PancakeSwap sent out another tweet, hoping to address the concerns from their community by providing more guidance on how the team will handle flash loan attacks. To the dismay of some, PancakeSwap refused to remove flash loan functionality, as they “serve a valid purpose.”
The thread continues stating that flash loans would exist whether or not PancakeSwap supported them. Finally, the thread ends with PancakeSwap outlining two ways in which their protocol shuts off certain points of attack.
Predefined token mining, which can’t be adjusted in a single transaction and ownership can’t be transferred outside of a MasterChef contract
Preventing other contracts from from interacting with smart contracts when not required
PancakeSwap claims these two processes reduce attack vectors from flash loan attackers. Unfortunately, neither option fully removes the risks of the loan, making it impossible to be 100% safe from an exploit.
PancakeSwap is a Binance Smart Chain-based DEX that was launched by anonymous devs with a love for breakfast foods and rabbits. It resembles Ethereum’s SushiSwap, a community governance with the ability to farm liquidity provider tokens, but also incorporates many other features and benefits that let users earn rewards. The protocol has been relatively exploit-free in its history, which has been positive for the growth of its following.
Although some might be disappointed that PancakeSwap is not going to remove the flash loan function, it is a good sign for investors that PancakeSwap is not only thoughtful of flash loan attacks, but also that they are implementing ways that close off entry points of attack. Recent attacks against DEXs have shaken investor confidence in decentralized exchanges. Time will tell if PancakeSwap has done enough to ward off potential attackers, as some of their community has wanted the platform to remove the insecure feature entirely.
Source : bsc.news
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