Chainlink co-founder Sergey Nazarov thinks that Flash loan attacks will keep on happening unless DeFi protocols reconsider the way that they obtain data. In today’s LINK news, we are reading more about it.
More than $100 million was lost when the hackers targeted a number of Defi projects and they were able to manipulate the prices and walk away with tons of money because the Defi protocols are getting data from one source. The founder of Chainlink Sergey Nazarov thinks that it is crucial for DeFi protocols to change the way that they obtain data in order to prevent these attacks from happening.
Nazarov said that the hackers will continue to come after Defi protocols unless they change the way that they get their price information. He made these comments after the Defi protocols lost more than $100 million in flash loan attacks that attacked Compound, Cheese bank, and Harvest Finance. The projects were subject to oracle exploits where the price of the coins held in the protocols got manipulated. The hackers were able to target a few of these projects because they only relied on Curve Finance’s data on the price of crypto that is held in liquidity pools.
Nazarov said on the podcast that all of the attacks were “related to using a single centralized exchange as price source” and that the attacks of this kind will keep on happening even if the protocols start getting their data from other sources:
“I think it’s a serious concern that both developers of these protocols should look into.”
Nazarov said that these projects that rely on Curve, misappropriated DeFi protocol’s Curve liquidity pools as oracles. Nazarov thinks that Chainlink was resistant to these problems because it uses a few data sources and gets the data from hundreds of exchanges. In order for protocols to avoid problems like this in the future, they will have to think about the source of their data.
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Since the attacks, Curve Finance warned Defi projects to use Chainlink as it cannot be manipulated. It now looks like the new Defi protocols will have to improve their game when it comes to security or else, millions more will be lost.
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