Identifying and Addressing Key Web3 Vulnerabilities

Hello guys, I am Vinay Sati bug bounty hunter, Forensic Investigator, and web3 Tester, just like a cyber all-rounder.

In the digital age, the emergence of Web3 has brought about significant advancements, promising a more decentralized and secure internet experience. However, with progress comes new challenges and vulnerabilities that must be addressed. Understanding the potential risks associated with Web3 and implementing effective solutions is crucial to safeguarding digital assets and personal information.

Most Popular Web3 Vulnerabilities

Smart Contract Logic Vulnerabilities

Smart contracts are self-executing contracts with the terms and conditions of the agreement between parties directly written into code. They automatically execute when predetermined conditions are met. Smart contracts play a crucial role in many Web3 applications, facilitating various processes such as payments, asset transfers, and complex transactions without the need for intermediaries.

Challenges with Smart Contracts

The issue with smart contracts is that they must be put on a blockchain network to perform the intended activities. Because smart contracts are present on decentralized blockchain networks, the security of smart contract data is dependent on the security of the underlying blockchain.

The types of security vulnerabilities in smart contracts arise from flaws in the smart contracts’ logic. Logic hacks on smart contracts have been used in Web3 projects to abuse various capabilities and services. Furthermore, smart contract logic flaws can result in serious legal concerns due to a lack of legal protection and clarity regarding jurisdiction.

Redress for Smart Contract Vulnerabilities

The methods for dealing with smart contract vulnerabilities would concentrate on a careful examination of the nature of blockchain and smart contracts. Careful evaluation of the blockchain and smart contracts at various stages, from planning to testing, can aid in analyzing all blockchain characteristics. By understanding blockchain and smart contract development, you can solve smart contract vulnerabilities and the associated Web3 security issues.

Rug Pull Scams

A rug pull scam is a type of cryptocurrency fraud that occurs in decentralized finance (DeFi) and other blockchain-based projects. In a rug pull scam, the creators of a project, often in the form of a token or a decentralized application (dApp), suddenly abandon the project after attracting a significant amount of investment or user funds. They do this by draining the liquidity or selling off the assets, leaving investors and users with worthless tokens or without access to their funds.

Challenges with Rug Pull Scams

The most significant difficulty with rug pull scams is that you do not detect foul activity until it is too late. Rug attracts scammers to begin by creating buzz about their idea on Twitter, Telegram, and other social media channels. Some rug-pull scams also employ influencers to persuade others of the project’s legitimacy.

Furthermore, the scammers purchase a large number of their tokens to increase liquidity in their pool, so garnering the trust of investors. The problem with such a vulnerability in Web3 becomes more complicated by the accessibility of listing coins on decentralized exchanges for free.

Redress for Rug Pull Scams

Due diligence is the suggested technique for avoiding losses caused by rug pull frauds. Before investing your money in a Web3 project, you must conduct extensive study on it. To prevent the risks of rug pull scams, you must study several components of Web3 projects, from the token pool to the information of the founders and the project roadmap.

NFT Exploits

NFTs are usually implemented through the usage of smart contracts, that record their metadata and keep track of the ownership through time. An attacker can leverage a smart contract vulnerability thanks to which it can create counterfeit NFTs, and move them autonomously between wallets in a blockchain network.

Challenges with NFT Security

Responses to the question “Is Web3 vulnerable?” would also focus on smart contracts, which specify the ownership record of NFTs. Non-fungible tokens are a relatively new technology, meaning that users should become acquainted with potential security issues. Victims, for example, may be misled into purchasing clones of popular NFT collections or malicious NFTs. A single click on a fraudulent NFT link might offer total access to your NFT collection or crypto assets.

Redress for NFT Security

The discovery of a vulnerability in cyber security for non-fungible tokens does not rule out the use of NFTs. On the contrary, you should seek out better alternatives that will assist you in developing a thorough grasp of vulnerabilities in NFT smart contracts. To avoid security risks, you can also use warnings and notifications for suspicious activity in NFT marketplaces.

Data Manipulation

Data manipulation in the context of web3 refers to the process of interacting with and modifying data on the blockchain using web3 libraries and APIs. Web3 is a collection of libraries that allows developers to interact with decentralized applications (DApps) and smart contracts on blockchain platforms like Ethereum.

Here’s how data manipulation works in web3:

• Challenges of Data Manipulation

  AI is one of the most important technologies in the Web3 ecosystem, and many dApps and smart contracts make use of it. For training on a certain topic, AI models require enormous amounts of high-quality data. Without sufficient safeguards for dApps or smart contracts, hostile third-party agents may seek to manipulate data using AI models.

  
  

• Redress for Data Manipulation

  The solutions for Web3 security problems associated with data modification refer to the use of secure blockchains for the deployment of dApps.

Ice Phishing

‘Ice phishing’

Instead, an ice phisher tricks a victim into signing a malicious blockchain transaction that opens access to the victim’s wallet so the attacker can steal all the money. In such cases, victims are often lured onto a phishing website designed to mimic real crypto services.

• Challenges in Ice Phishing

  Ice Phishing tactics, which rely on social engineering assaults, are among the most serious sorts of Web3 security flaws. Visual imagery can be used by attackers to trick visitors into thinking they are clicking on legitimate links.

  
  

• Redress to Ice Phishing

  The remedy against ice phishing emphasizes the importance of security training. Web3 users must adopt best practices when interacting with emails and double-check links before clicking. To avoid ice phishing difficulties, pay close attention to the logos, website URL, and project name.

  
  

Conclusion

The list of prominent Web3 vulnerabilities demonstrates that Web3 is not as secure as everyone assumed. It is a new technology concept with several security flaws. Most importantly, the top Web3 vulnerabilities concentrate on discovering attack vectors that can yield handy outcomes for attackers. A small error in the smart contract code, for example, can result in millions of dollars in losses. As a result, research into Web3 vulnerabilities would be a critical prerequisite for future Web3 adoption.