Crypto custodian Fireblocks announced on Wednesday that it has launched its dApp Protection and Transaction Simulation products, which will help protect institutions from run-ins with scammers in decentralized finance (DeFi).
Fireblocks’ DeFi Protection Tools
Both products have undergone beta testing with Galaxy and FlowDesk since December of last year. They are now available to safety check decentralized applications (dApps) across over 40 blockchains using Fireblocks’ APIs, including WalletConnect and MetaMask Institutional.
“As the DeFi sector experiences unprecedented growth, the need for proactive security measures has never been more critical,” wrote Fireblocks in a blog post on Wednesday.
DeFi’s growth over the past several years has coincided with more funds lost to hacks and scams, with clever criminals building more sophisticated smart contract tooling contracts to separate victims from their digital assets.
Volume stolen from DeFi hacks fell from $3.1 billion in 2022 to $1.1 billion in 2023, according to Chainlysis. However, data from CertiK suggests that theft volume has already bounced back to $500 million in Q1 2024 alone, using phishing websites, dApp takeovers, supply chain attacks, and the like.
The Need For DeFi Safety Tools
The landscape necessitates that DeFi users have automated tools for detecting malicious or duplicitous smart contracts before interacting with them. Though some Fireblocks customers have internal Web3 security teams, most lack the resources to hire cybersecurity experts to navigate the inherently opaque and technical nature of contract calls.
As such, Fireblocks’ dApp protecting tool provides real-time threat detection alerts before users interact with phishing websites or potentially compromised dApps. Meanwhile, transaction simulation shows users a preview of the estimated change to their token balance caused by a smart contract interaction before actually using it.
Andrew Taubman, Deputy Chief Operations Officer, stated:
“Deploying onchain trading strategies presents new security considerations. Fireblocks dApp Protection and Transaction Simulation empower our team to stay ahead of evolving onchain threat vectors while providing everyone in the transaction approval workflow with visibility and clarity into what they’re approving.”
According to DeFiLlama, the total value locked in DeFi protocols has risen from $54 billion at the start of 2024 to $94 billion today, reflecting rising enthusiasm in the crypto markets at large.
During a March webinar, experts at Chainalysis suggested that artificial intelligence and LLMs might be leveraged by hackers to find vulnerabilities in smart contracts, enabling more DeFi-based crime.