• The Ethereum community proposed the ERC-7265 standard to reduce DeFi exposure to exploits.
• The proposal is intended to temporarily halt outflows when a breach is detected.
• There are concerns over centralization and misuse of the standard as well as questions about the security of storing funds in DeFi protocols.
Ethereum Proposes ERC-7265 Standard
The Ethereum [ETH] community has proposed a new ERC-7265 standard or “circuit breaker” in order to reduce DeFi exposure to exploits. This approach aims to temporarily halt outflows when a breach is detected. Despite this, some have expressed concern over potential centralization or misuse of the standard, as well as questions regarding the security of funds stored in DeFi protocols.
Misuse Of The Standard
Pseudonymous developer Diyahir noted that smart contracts could delay settlements while cooling down attempted withdrawals with this circuit breaker structure. Over the last 365 days, several DeFi projects have been subject to numerous exploits and flash loan attacks amounting to $2.85 billion which has raised questions about safety within these networks. When asked if ERC-7265 could mitigate DeFi hacks, Nikolay Denisenko mentioned that hackers often exploit protocols due to their ability to rapidly drain funds before any countermeasures can be initiated and by incorporating a mechanism that can limit withdrawal speed, it could help reduce large scale theft greatly. He also added that risk of centralization should be looked at closely in order for the standard not be misused.
Daily Transactions On Ethereum Network
At press time, DefILlama revealed daily transactions on Ethereum had crossed 900,000 suggesting market participants still considered it safe enough for transactions but further improvements were necessary for greater security against malicious actors attempting exploitation of vulnerable codes within smart contracts and exchanges built on top of it .
Pros & Cons Of The Proposal
The pros of this proposal would include increased safety from malicious actors attempting exploitation on smart contracts or exchanges built on top of Ethereum network while cons would include potential risk posed by centralized misuse or control over settlement delays if implemented incorrectly leading attackers exploiting loopholes in protocol code more easily .
Conclusion
In conclusion ,the proposed standards seek to increase safety within decentralized finance networks but there are still issues which need resolved before implementation including potential risk posed by centralized misuse or control over settlement delays . Therefore , further testing needs done before any deployment happens .