The familiarity of cryptos among users in the current times indicates the leaps and bounds of growth attained by the web3 market. In that respect, the global web3 market size valued at USD 3.34B in 2022 is expected to grow at a CAGR of 46.7% from 2023-30.
The amusement for blockchain is its design with decentralised databases and ledgers that grants the user complete control of data and identities. Being primarily driven by the decentralised structure attracts users and companies to invest in web3 for robust and transparent operations.
Let’s pen down the stand-alone attributes of web3 and understand how vulnerable they are to hacks/security breaches.
Entrancing Nature of Web3
Smart Contract Controlled: Smart contracts regulates the transaction flow based on the agreements without the involvement of any central entities. They are coded with the metrics to maintain a regulated system for users to delve into blockchain utilities.
Distributed Ledger: The data is validated by the nodes and distributed throughout the network using Distributed ledger technology (DLT). This increases transparency and terminates the possibility of data tampering and other related fraud.
Sheer Trust: No middleman or intermediary is involved in this system as the data flows from peer to peer in the network. Thus decentralization improves the way of data handling.
Web3 Security: Challenges and Solutions
Newest Forms of Social Engineering Attacks
Discrepancies in Smart Contract Code: There are many instances of hackers exploiting a minute issue with the code and making a huge profit out of it. Some of them are the reentrancy bugs, arithmetic logic, ownership access, etc.
Flash Loan Frauds: Uncollateralised loans borrowed from the banks are a hotbed for looting away assets for hackers. By manipulating the variables, the hacker launch flash loan exploits to siphon off funds from the reserves.
Rug Pulls: Projects with a prospective outlook may later deceive users, making them lose money. They are known as rug-pull scams, a never-ending threat to Web3.
Data-Driven Complications
Data Availability: The nodes have control over the data to a larger extent by verifying and adding them into blocks. But the problem arises when data becomes unavailable at a particular point; it might greatly disrupt the process and applications.
Data Manipulation: Data manipulation risks include injecting malicious scripts into the programmes or interjecting unencrypted data transmission and altering it.
What’s the Solution to Create a Safer Web3 Landscape?
The next gen of the web is empowering people with distributed governance. Also, new opportunities open up newer challenges. Through critical analysis of risks, it is possible to develop novel approaches to tackle them. Some of the ways to address security are,
Learn from Complexities: The decentralisation approach should be perceived rightly to develop effective modeling of web3 space. Continuous analysis of the hack trends helps in building appropriate solutions. The users of web3 should stay informed of the security to avoid being tricked easily into phishing and rug pull scams.
Cruciality of Web3 Security Audits: Users might not be fully aware of the threats, but security researchers do. Smart Contract Auditing firms will have expertise in scrutinising smart contract errors and provide due diligence services to spot the likelihood of the project being a rug pull that helps make informed investment decisions.
Partnerships and Collaborations: The ecosystem as a whole needs collaboration to grow and succeed. The shortcomings in decentralised technology can be overcome by collaborating with other Web3 businesses that align with your mission.
About Author
