Since Web3.0 came into existence, it acted as a blockchain-based disruption to the current Internet’s scenario. As a developing technology, questions have been raised about the actual capabilities of Web3.0 and its role in our day-to-day lives, as reported by Cointelegraph. With the collective aim of decentralised internet through use of blockchains, the complete transition to Web3.0 would be in need of factors such as a Web3.0-based world, tools and applications, for blockchains to go mainstream.
According to Cointelegraph, while blockchain-backed Web3.0 applications are expected to be unbreakable against hackers, hackers aim for the vulnerabilities within the project’s smart contracts. Reportedly, smart contract attacks on decentralised finance (DeFi) sectors went up, with a study revealing that around $1.6 billion in cryptocurrencies was stolen in Q1, 2022. Although DeFi is considered a subset of the Web3.0 ecosystem, it shows the main vulnerability within the environment, due to which Web3.0 entrepreneurs would need to redirect their marketing budget towards the development of the core system. Vulnerabilities which allow hackers to drain asset amounts result in losses for investors through collapse of related ecosystems.
On the basis of information by Cointelegraph, in addition to external hacks, bad actors within the system may dupe the project and its investors. Employees getting access to fail-safe mechanisms are required to avoid internal hacks. Trading and liquidity automated market maker (AMM) Velodrome Finance got back $350,000 from one of its team members called Gabagool. A high-worth wallet of Velodrome was drained off $350,000. Through an internal investigation, the attacker’s identity was unveiled.
Moreover, Cointelegraph noted that over six months of the bear market filled with hacks have forced cryptocurrency investors to realign their investments with ecosystems to show safety. Web3.0 entrepreneurs aim to take steps to ensure long-term success of their offerings. Through bug bounty initiatives, developers are rewarded financially to find and fix bugs in the system. Furthermore, entrepreneurs must create multisig wallets to store funds and remove centralised control over wallets.
(With insights from Cointelegraph)