With a new tool that promises to identify flaws before they are used, blockchain security platform Quantstamp is attempting to stem the growing concerns of flash loan assault.
Before protocols are breached, the Economic Exploit Analysis service uses automated technology to identify typical attack vectors utilised by exploiters. Together with scholars from the University of Toronto, the service was made public. Flash loan attacks resulted in token thefts totaling an estimated $207 million in just the first half of 2023.
Flash loans are uncollateralized loans made available through smart contracts that can be obtained for as little as one transaction. Hackers use flash loans to borrow large sums of money during these attacks, manipulating DeFi protocols into unanticipated states that may not have been intended by creators.
Flash loan attacks can consume the whole total value locked (TVL) of a DeFi protocol, and because of DeFi’s composability and sophisticated design, these attacks frequently elude traditional audits.
“DeFi has the potential to improve the global financial system, but it needs to be successful in thwarting dangers like flash loan attacks. Martin Derka, director of new projects, stated that we created this technology to add an additional degree of security to DeFi protocols on top of audits. “Security measures must advance alongside DeFi as it develops. Our advantage over hackers is provided by services like Economic Exploit Analysis.
Both deployed and undeployed protocols can use the Quantstamp service. Although the tool’s search function is automated, some manual assistance and modifications to fit certain protocols are still needed.